A bond auction this morning for Germany led to the Euro losing about half a cent against the pound. The bond auction was not fully subscribed which raised investors eyebrows. Germany has been seen as the rock in the sea of debt engulfing Eurozone countries. This makes clear to me that the crisis is only getting worse and spreading, the question for anyone buying or selling Euros is how does this affect me? And more importantly when will it affect me?
Other data out in the Eurozone today was PMI (Purchasing Managers Index) data giving a snapshot of Eurozone manufacturing and services. This showed small improvements in business confidence but with both markers still below 50, there is still pressure on the recovery in the Eurozone.
The Bank of England minutes passed off without event and attention will really turn to the GDP numbers tomorrow morning. If Germany is experiencing a slowdown this could really present some volatility, although it may be shortlived since UK GDP numbers follow shortly after (see this morning’s post for full details).
I wouldn’t personally be banking on major improvements before the end of the week but if we are going to see any spikes it will probably start tomorrow morning.
If you have any trades to make now or in the future and would like some free, no obligation, hassle free information about what is driving the rates please feel free to contact me quoting JMW and ERF on (+44) 01494 787 458 or email [email protected]