The recent (more than 10% QoQ) slide in the euro is a two-standard deviation event, the likes of which we have not seen since 2010. And, as we can see in the chart above, the only time the euro has declined more versus the USD...
The odds of a Eurozone break-up remained unchanged at 38% in the most recent Sentix survey, conducted over the last three days of February– a level not seen consistently since 2012 and up considerably from last July’s 7% reading....
Unsurprisingly, the cost of insurance against Greek default (as evidenced by 10-year credit default swaps) has risen since the beginning of the year....
Markit’s PMI Manufacturing survey data released today showed little change in euro area countries’ headline readings, as most continued to hover around the all-important 50 level: The largest monthly improvement was in France (~2 points) while Ireland’s survey fell the most (~2 points), and no...
The likelihood of a country leaving the euro zone rose once again, according to sentix’s Euro Break-Up Index (EBI)....
Since the ECB announced its open ended QE program we have seen numerous parallels being drawn with Japan’s amped-up QE program announced in April of 2013, but telegraphed in late 2012. One of those parallels is that like Japanese financial stocks, Europe’s financial stocks should...
IMF data released earlier this week revealed the largest ever quarterly decline in reserves held in euros....
While today’s better than expected rise in the flash PMI indicator (black line) for the euro zone is a welcome surprise, it would seem that it will take quite a bit more improvement before we can reasonably expect substantial progress in the recovery of important...
Circling back to a topic we have addressed previously (here and here), today’s plunge in the EUR/USD exchange rate puts it back on track towards syncing up with the interest rate differential between corresponding spreads: Having narrowed the gap that developed late last year, how...
Following yesterday’s rather disappointing retail sales data release, Markit’s Retail PMI data (released today) were not very inspiring either: While Germany managed to register marginal growth, the rest of the region’s major economies remain below 50, indicating continued contraction: Employment fell for the first time...
While we will have to wait another month or so to see the official results, today’s data releases of both the ZEW Survey (red line) and European Industrial Production (dark blue line) do not bode well for Europe’s Q3 GDP (light blue line) release: On...
According to the most recent data available, the IMF estimates that central banks around the world shifted quite a few of their reserves out of the euro in Q2....
In June (here) and again last month (here), we noted a curious divergence in two series that have historically moved together– the EUR/USD exchange rate and the interest rate differential between the respective 2-year OISs....
Following the ECB’s June meeting, we noted (here) a curious disparity in the relationship between the EUR/USD exchange rate and the spread between interest rates in Europe versus the U.S. While the euro had failed to move lower then (as it has in the past),...
We noted last week that there are six European countries that currently have zero or negative year-over-year percentage change in their consumer price index. It is rare for consumer prices to fall into negative territory. Perhaps equally as rare, investors are now paying to lend money...
