Weak data leads to a broadly weaker Euro
What happened overnight
– Euro zone economic sentiment falls to a new 2009 low
– Italian business confidence up a bit from weak levels
– German unemployment rises for sixth straight month
The Euro is weaker across the board, losing ground vs. EM and G10 currencies as weak data boosts ECB easing expectations. EURUSD has slipped back towards Wednesday’s 1.2835 lows and EURGBP has traded down to new post ECB lows of 0.79235, while even the EUR-Nordic and EUR-CE3 crosses have lost some ground. Meanwhile, EUR concerns have not weighed on more globally oriented growth proxy currencies, with AUDUSD recovering back above 1.04, putting EURAUD at new post FOMC lows, and USD-Asia trading broadly lower. Equity markets are also trading well in most of Europe and the S&P future is up 0.5%. Peripheral bond markets have stabilized after Wednesday’s selloff, with Spanish 10-year yields down 5bp.
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Credit Suisse