!!!Drop in German Factory Orders Points of economic Contraction Possible

5 June 2012 08: 51 GMT the takeaway: German factory orders decline of 1.9% in the month of April-> several indicators of possible contraction-> Euro cancels the previous session gains
Reference to a possible reversal to an economic contraction, commands dragged German plant-1.9% in the course of April, well below the expectations of analysts for a - 1.1% decline. From the month of April 2011, factory orders were down 3.8% and March it had arrested were revised and more for an increase of 3.2%, according to the Ministry of economy in Berlin.
Factory orders from other countries of the euro area dropped 1.8% in April, while orders from non - EU countries fell by 4.7%. During this time, domestic orders were up by 0.4%.
Earlier today, composite outcome of German Index of purchasing managers of May is the lowest 34 months and indicates a contraction of the German production. The decline suggests that anxiety over the European debt crisis is now pressure on the German economy, and GDP T2 could come down.
It is said that G7 leaders are meeting today to discuss ways to improve the European economy and to help the Greece to avoid output of the single currency. German Prime Minister Angela Merkel said so far that it does support joint Government in euro bonds.

The EUR/USD appeared to ignore the worst decline expected in the commands of the plant, as the slightly higher fixed pair follows a giant lower 1.2450 earlier in the session. Feelings of risk are down after the Spanish Minister of the Budget of the negative comments on a rescue plan and the rumours that the G7 leaders will participate in a conference call.
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5 June 2012 08: 51 GMT

€ Euro Consolidates Following 2nd Straight Spanish Economic Contraction

The Takeaway: the Spanish GDP drops 0.3% for the first quarter of 2012, as expected-> severe austerity measures set for 2013-> Euro consolidates lower annual
The Spanish economy decreased during the second quarter, as the gross domestic product in Q1 2012 reached 0.3% from the previous quarter, to meet the expectations of analysts. GDP in the first quarter was also a decline of 0.4% from the first quarter of 2011, according to the National Institute of statistics.
The ongoing economic downturn comes in the middle of the harsh austerity, Spain sets a target of cutting its deficit target budget for 2012 to 5.3% of GDP and 3% of GDP in 2013. Current austerity measures are the deepest in recent decades, but Prime Minister Mariano Rajoy fears a lack of market confidence to lend to the Spain, if the country is not severely reduce its spending.
As the Spain struggles to contain his ready confidence, his point of reference of the yields of the bonds of 10 years increased by 6.3% compared with only a 5% performance early in March.
Construction and real estate are two sectors that have experienced heavy downturn. Construction decreased by 3.1%, compared to a loss of 1.1% in the previous quarter. Real estate has slowed down 2.5% from a previous gain of 0.8%. Household spending fell 0.6% from the previous year.

EUR/USD fell following the release of the GDP, but the move could be considered more a grouping over the 1.2625 2012 low and less than a reaction to the expected economic contraction.
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