Intraday Market Thoughts

EU Finance Ministers Meet To Discuss EFSF/ESM

by Patrik Urban
Mar 30, 2012 13:20

EU finance ministers meeting under way; German retail sales declined; Eurozone CPI eased; Swiss KOF rose and French consumer spending solid. Focus turns to core PCE, personal income and spending, Canadian GDP and UOM consumer confidence. Our Premium Intermarket Insights look at the latest on the Euros attempt at the Golden Cross, trades on EURUSD, EURJPY, US Crude, and charts on BRICs vs S&P500.

The greenback trades virtually unchanged in the ongoing session. European equity indices are higher by about 0.9% and the relative strength winners are NZD followed by GBP.

The meeting of EU finance ministers gets under way today in Denmark and continues tomorrow. The key decision is whether the financial firewall size will be increased. Anything less than combining EFSF (EUR 240 bln) with ESM (EUR 500 bln) to reach EUR 740 bln would be seen as a disappointment. Austrian finance minister Maria Fekter has already suggested that the Eurogroup will agree on size above EUR 800 bln.

Despite improving labor market in Germany, February retail sales surprised to the downside declining -1.1% from -1.2% with the annual result unchanged at 1.7%. However, retail sales are often revised and are generally volatile. EURUSD fell on the news to 1.3323 but quickly recovered back to around 1.3350.

On the data front we learned that the first estimate of Eurozone CPI has eased to 2.6% from 2.7% y/y, Swiss KOF economic barometer rose in March to 0.08 from -0.11 and French consumer spending increased 3% in February from -0.4%. This is the largest rebound in over 15 years and is attributed to higher energy consumption and purchases of winter clothes due to unusually cold temperatures.

The NY session starts at 8:30 am ET with February core PCE that is seen at 0.1% from 0.2% m/m and steady at 1.9% on annual basis. Personal income and personal spending are anticipated higher at 0.4% from 0.3% and 0.6% from 0.2% respectively.

Final UoM consumer confidence is due at 9:55 am and upward revision to 74.8 from 74.3 is expected.

Canadian GDP is due at 8:30 am and it is seen to slow in January to 0.1% from 0.4% m/m (1.7% from 1.8% y/y).


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