THE TAKEAWAY: Strong German industrial data -> Euro and risky currencies Markets digest French, Greek election results
German industrial production was stronger than expected in March, removing some of the bite from a weak weekly open for the single currency. Production rose 2.8% on the month, more than the -0.3% markets had expected. The yearly number was 1.6% versus the expected -1.2%, the German stats bureau said today. Both the monthly and yearly figures saw upward revisions.
Germany has struggled to maintain industrial growth as declining global demand continues to erode. Even so, Europe’s largest economy remains its strongest, although yesterday’s election results from France and Greece threaten to test Berlin’s mettle in demanding tough reforms across the Eurozone. Both nations elected anti-austerity parties in a repudiation of the German-led drive to reduce sovereign debt in the Euro-area.
Germany’s leader Merkel reportedly told French President-Elect Hollande that the Eurozone fiscal compact approved last fall is not up for renegotiation. Berlin has taken a similar hard position regarding Greece, where last weekend’s election results are likely to bring increased opposition to austerity.
The Euro remained pressured today as risk-correlated currencies took a beating in the wake of uncertainty over the Eurozone’s future.