Disappointing Data Encourages Risk Aversion as Greece Remains in Spotlight
*Eurozone industrial production weak in April
*Italian inflation as expected
*Greek headlines continue to suggest political instability, friction with EU
*Euro looks to North American open for possible rally
A rough session for economic data drew to a close today as weak Eurozone data dented confidence in the single currency. April industrial production was weaker than expected on all fronts, despite upward revisions to the previous figures.
The numbers underscored the Eurozone’s deep-rooted growth issues, as the region’s leaders attempt to juggle lagging growth, burdensome sovereign debt, and inflation’s ever-increasing threat.
Meanwhile, Italian inflation numbers and other minor economic releases were as expected. Italy remains beset by austerity measures imposed by the German-dominated European Union. The latest steps out of Rome are intended to reduce unsustainable Italian debt levels, but have also negatively affected consumer confidence.
Fundamental focus remained on Greece as the verbal battle between Athens and EU paymaster Germany escalated. In a last-ditch effort to form a government, the leader of the Greek left-wing Syriza party today requested meetings with the leaders of all parties. The leader of moderate-left party Kouvelis has stated he will not take part in a coalition government without the Syriza party.
German Finance Minister Schaeuble today called Greece’s current situation “dreadfully difficult,” adding that the ECB can’t keep the Euro stable using monetary policy alone.
European bond spreads widened today as the negative headlines highlighted the global risk-off mood. The Euro weakened against the US Dollar, and was seen pressing towards the yearly lows by 1.2625
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