Data in Europe was mixed, with Greek industrial production falling 8.1% year-on-year, while Spanish GDP grew 1% and Holland’s industrial production fell 0.4%.
It’s also quite interesting to see the Italian political situation, with an Italian Senate panel delaying a vote on whether to expel former Italian Prime Minister Silvio Berlusconi from government. A vote is expected to take place tonight and an expulsion could have ramifications on political stability in Italy. The fact the Italian ten-year government bond only rose two basis points suggests fixed investors don’t see this blowing up into a huge political drama and perhaps that view is misplaced. We will watch this situation with interest as political instability could see the EUR offered.
At 22:30 tonight Joerg Asmussen speaks and his view on ECB policy will be closely followed. We also get reads on Italian GDP and French industrial and manufacturing production numbers. Good European data and hawkish comments from Mr Asmussen should push the pair to our suggested limit.