Euro Weakens Intraday after Data Shows Drop in German Industrial Production

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By David Schutz, 06 June 2012 10:26 GMT THE TAKEAWAY: German industrial production weakened in May -> Euro well bid on the day but weakens after data

German industrial production fell more than expected in April, the German stats bureau said today. The data added to fears that growth in Europe’s largest economy is slowing as the far-reaching credit crisis curbs demand and consumer confidence. Production fell 2.2% on the month versus the expected 1% drop. The number was -0.7 weaker than April 2011.

Germany has remained the region’s strongest economy since the onset of the crisis, recently posting Q1 economic growth of 0.5% which helped the Euro-area avoid recession. Today’s numbers increased fears that that economic woes will catch up with Germany, which has thus far benefitted from low unemployment and increased exports to emerging markets.

The Euro remained well bid on the day, but suffered from the weak German numbers intraday. Fears of political instability have driven the single currency down since the beginning of May.

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06 June 2012 10:26 GMT

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~!~ Book weakens intraday public UK adding yet

The Takeaway: public finance UK, borrowing from the public sector higher than expected-> cable interference intraday gains
Higher than expected number of government bonds of the United Kingdom has not actually affect the British pound today, despite the fundamental fears that massive deficit of the United Kingdom may exceed himself. Public sector net borrowing GBP rose 15 9bln in March, versus the 14 2bln expected. and the 9 previous 9bln revised.
Public sector borrowing net sales represents the amount of new debt held by the Government of the United Kingdom. In the long term, the Government must strike a balance between public sector account in order tosustain the economy. If the United Kingdom spends more than it earns, it is to finance this deficit with an increase in net loans.Growth of the loan is considered currency lower, budget deficits are generally harmful to the economy.
Public finances in March figures indicate that the trend in the tax position of the United Kingdom continues to worsen. Intraday Cableweakened; However, the overall trend of the book remains optimistic on the back of recent jobs data solid and a more hawkish view of the Bank of England.