Data and Italian news weigh on European FX
What happened overnight
– Italian Prime Minister Monti indicates he will resign
– Italian and French IP weaker than expected
– Chinese exports disappoint but production firmer
– Swedish IP better than expected
European currencies are broadly weaker after weekend political news in Italy and another set of poor industrial production data was released. EURUSD traded as low as 1.2881early in Asia trading but held above the post payroll report lows of 1.2877 and has since recovered above 1.29. The CE3 and NOK are underperforming, but EURSEK is stable after a stronger Swedish IP report. Meanwhile, a good set of Chinese data has helped the commodity bloc maintain last week’s gains, while USDJPY has slipped through Friday’s lows. Equity markets are weaker across the board in Europe and the S&P future is off 0.25% despite a continued strong recovery in the Shanghai composite index. Sovereign markets have been hit in Europe, with the Spanish 10-year yield up 17bp and the Italian equivalent up 36bp.
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Credit Suisse