The Euro had a reasonable day on Monday, holding steady against the US Dollar and the Japanese Yen and taking another quarter-cent out of Sterling. In fact, the Euro is trading at a 5-week high against Sterling at the moment. The sole Eurozone statistic, Sentix's index of investor confidence, deteriorated from -29.6 to -30.3 which was the lowest reading for three years but better than the forecast -31.0.
Other than the Halifax house price index's -0.6% monthly fall, announced just as London was opening, there were no useful data from Europe or the States. That left the markets to increase their focus on the fallout from the ECB meeting last Thursday.
The master plan revealed last Thursday by the European Central Bank was to relax the terms on countries that applied for a bailout however, it may not last if the infighting spreads. And there are concerns that Spain's Prime Minister could hold back from requesting a bailout, a necessary condition of ECB President Draghi's strategy, now that its borrowing costs have fallen. Even so, a handful of days after they signed up for the Draghi Plan investors are loath to walk away from what they knew from the outset would be a weeks-long, if not months-long, project.
Overnight, New Zealand labour costs were said to have risen by 0.5% in the second quarter. Australia's construction sector purchasing managers' index scored a miserable 32.6, not as bad as last October's 30.0 but symptomatic of an ongoing slowdown. The Reserve Bank of Australia kept its Cash Rate steady at 3.5%, as expected.
There is no pan-Eurozone data today but national figures cover Italian industrial production and second quarter GDP and German factory orders. After lunch Canada releases the Ivey PMI and building permits for June. There is no data of any consequence from the States, but the Federal Reserve chairman will make a speech this evening.
As for the UK, figures this morning for June's manufacturing and industrial output are not expected to be very good. Some or all of the decline will be attributable to the Jubilee long weekend and the holidays built around it, but that knowledge won't make the numbers look any more appealing.
Sterling could therefore feel the pressure if investors decide to get involved.
Conceived with Ambition