With the ECOFIN (Economic & Financial Affairs Council) meetings this Saturday and the EU Economic Summit this Sunday. Markets are awaiting any significant move in order to catch the new developing trend. According to Franco-German statements, French president Sarkozy and German chancellor Merkel are will review the plan to “fix” the Euro-zone at the EU summit and will approve it by next Wednesday.
According the Figaro, France is preparing to cut 2012 GDP growth forecast. A forecast below 1.5% would induce a cut in spending and raising taxes to meet the 4.5% of GDP target. The Greek government secured the votes for the austerity plan with 154 in favor versus 144.UK Retail Sales came out better than expected at 0.6% while it was expected at 0% with a previous number at -0.4%. The surprise came out from the Philly Fed Manufacturing Index with a +8.7 while it was expected to print -9.0 from a previous -17.5
Despite all the moves up and down, the single currency is still stuck in a sort of range between 1.3650 area and 1.3850 area. We’re expecting the range not to be broken before the week-end. As we said, the markets are awaiting the developments during this week-end.The Pound is also stuck in a similar range between 1.5650 area and 1.5850. GBPUSD is expected to respect this range before the week-end with a most probable break to the upside.
German Ifo Business Climate printed this morning 106.4 versus an expected 106.3 and a previous 107.4. While the UK Public Sector Net Borrowing came out at 11.4B versus an expected 12.0B and a previous 10.9B.Canadian Core CPI m/m is expected to come out at 0.2% versus a previous 0.4% while CPI m/m is expected at 0.1% versus a 0.3%.