- London Times: Toxic debts could reach $4.0 trillion, IMF to warn
- UK industrial production February -1.0% m/m, -12.5% y/y, vs median forecasts of -1.2%, -12.5% respectively. Biggest y/y drop since series began in 1968.
- UK manufacturing output -0.9% m/m, -13.8% y/y, vs median forecasts of -1.5% and -14.2% respectively. Biggest y/y drop since January 1981. Better than expected, but still horrible.
- Euro zone Q-4 GDP (final) revised down to -1.6% q/q from previous -1.5%, and to -1.5% y/y from previous -1.3%. Q-3 q/q decline also revised down to -0.3% from previous -0.2%. Q-3 y/y GDP left unchanged at +0.6%.
EUR/USD and cable having opened lower (not helped by london Times report, see above) garnered some early support from various central banks. Russian and Korean central banks were in buying EUR/USD, while India’s central bank was seen as an aggressive cable buyer in early European trade, managing to lift it back over 1.4700.
Things were fine, and relatively quiet, until the release of UK industrial production and manufacturing output data. While the numbers were generally better than expected, they still made for very gloomy reading. Cable sold off on the data.
Then the release of surprising Euro-Zone GDP data , showing downward revisions to both Q-4 and Q-3 numbers, put EUR/USD on the slide.
Morgan Stanley has cut price targets, estimates on a number of U.S. mid-cap banks, which hasn’t helped sentiment.
European stocks aren’t having a good day FTSE 100 and DAX 30 both off around 1%.
Risk aversion alive and kicking.
