THE TAKEAWAY: Italian GDP declines 0.2% in Q3, confirms earlier estimate -> 5 straight quarters of economic contraction -> Euro trading steady
The Italian economy continued a fifth straight quarter of negative growth according to the final estimate of the third quarter gross domestic product. The final estimate of a 0.2% decline in GDP was in line with a previous estimate and better than the second quarter’s 0.7% decline. The Italian economy contracted 2.4% from Q3 2011, according to the Italian Statistics Institute.
Household spending declined 1% over the third quarter, while exports only increased 0.5% over the same quarter.
Over the weekend, PM Mario Monti announced that he will resign from office after the Italian Parliament passes the 2013 budget. He is not winning in polls ahead of the elections expected to happen in February, and therefore there are worries that Monti’s successor won’t continue Monti’s economic reforms. The Italian elections are therefore now one of the foremost issues worrying Euro investors.
The Euro did not significantly react to the Italian GDP. EURUSD is trading slightly higher in today’s forex markets after opening lower than Friday’s close, following the weekend news of Italy PM Monti’s resignation. The pair is currently trading right around 1.2900, and resistance could be provided by the key 1.3000 level.
EURUSD Daily: December 10, 2012