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8 Mar 2013
Forex Flash: German IP data in focus - BTMU
Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ notes that there is little in focus for Europe today with German IP taking center stage.
He feels that after the shock decline in factory orders yesterday, the market would be less surprised with another weak figure today. He writes, “A plunge in foreign orders was the main catalyst for the 1.9% decline in January and suggests German growth will be held back by weakness in the euro-zone. ECB President Draghi revealed a weaker inflation profile in updated forecasts with a 1.3% projection for 2014 surely inconsistent with the ECB’s inflation mandate.” Halpenny feels that clearly, any weakness from here will warrant a rate cut – something we still expect possibly in June, noting that the euro may bounce from here – but only modestly.
He feels that after the shock decline in factory orders yesterday, the market would be less surprised with another weak figure today. He writes, “A plunge in foreign orders was the main catalyst for the 1.9% decline in January and suggests German growth will be held back by weakness in the euro-zone. ECB President Draghi revealed a weaker inflation profile in updated forecasts with a 1.3% projection for 2014 surely inconsistent with the ECB’s inflation mandate.” Halpenny feels that clearly, any weakness from here will warrant a rate cut – something we still expect possibly in June, noting that the euro may bounce from here – but only modestly.