As a new week begins, investors appear to be cautiously optimistic that the Eurozone panic is past its peak, and a weekend of focus on Italy has passed without incident. Italy’s 2012 budget law was passed by the Chamber of Deputies by a clear majority, and as promised, Prime Minister Berlusconi stepped down from his post to make way for new leadership. Much like the story in Greece which has played out over the prior couple of weeks, the departure of the old Prime Minister is likely to lead to the installation of a technocratic government. No nominations for Prime Minister have yet been officially announced, but it is believed that former EU Commissioner Mario Monti is a leading contender for the job. Of course, even though there have been no setbacks for confidence or sentiment in the past two days, there are still significant risk events on the horizon that could threaten the fragile equilibrium. Of key concern will be the upcoming Italian 5-year debt auction, and what sort of behaviour we see from yields.
In the Asian session, EURUSD has traded within a 1.3741 – 1.3815 range, and equity markets have been well-supported. Helping the mood has been the better than expected Japanese GDP data released this morning which showed the world’s third largest economy grew at a 6.0% annualized rate in Q3 (estimates were looking for a reading of 5.9%). The Nikkei is up +1.1%, Hang Seng +2.3% and Shanghai Composite +1.9% on the day, with futures also pointing to a higher open for European and US bourses.
Today’s data calendar is relatively light, with Swiss PPI and Eurozone industrial production the only releases of note. Analysts are predicting that Swiss producer prices will contract even more in October, in line with the recent falls in Swiss CPI; whilst Eurozone industrial production is expected to come out at -2.3% MoM, 3.5% YoY.
By
M.Zohaib Gadit
Forex Trading Consultant
In the Asian session, EURUSD has traded within a 1.3741 – 1.3815 range, and equity markets have been well-supported. Helping the mood has been the better than expected Japanese GDP data released this morning which showed the world’s third largest economy grew at a 6.0% annualized rate in Q3 (estimates were looking for a reading of 5.9%). The Nikkei is up +1.1%, Hang Seng +2.3% and Shanghai Composite +1.9% on the day, with futures also pointing to a higher open for European and US bourses.
Today’s data calendar is relatively light, with Swiss PPI and Eurozone industrial production the only releases of note. Analysts are predicting that Swiss producer prices will contract even more in October, in line with the recent falls in Swiss CPI; whilst Eurozone industrial production is expected to come out at -2.3% MoM, 3.5% YoY.
By
M.Zohaib Gadit
Forex Trading Consultant
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