The volcanic nature of a nation’s murmurings of discontent finally came to eruption last night as Spanish protesters clashed with the police. 

Facing another bout of austerity measures, thousands took to the streets, encircling parliament’s Neptune plaza to voice their dismay with the fiscal burden that they have already incurred. However these protests took a sour turn as groups of agitated individuals became involved in skirmishes with the authorities. 

The volcanic nature of a nation’s murmurings of discontent finally came to eruption last night as Spanish protesters clashed with the police. 

Facing another bout of austerity measures, thousands took to the streets, encircling parliament’s Neptune plaza to voice their dismay with the fiscal burden that they have already incurred. However these protests took a sour turn as groups of agitated individuals became involved in skirmishes with the authorities. 

With further cuts almost certain in Thursday’s budget, the chaos in the plaza is perhaps reflective of the government’s ability to control Spain’s finances. With this latest development, the euro’s decline of the last week is unlikely to curtail and will probably intensify as the pressure for a Spanish bailout mounts.

At the other end of the Mediterranean, Greek trade unions will begin a 24-hour strike today to protest further budget cuts, authorities will hope to avoid the scenes in Spain last night.

Unsurprisingly the UK is often left as the third wheel in these reports, creeping along silently yet resiliently in these unpropitious times. Yesterday, following a brace of positive announcements, the UK economy’s delicate but encouraging progression showed.

The pound was initially boosted by news that mortgage lending has ascended to its highest level since April. The figure, coming in at 30,533, was better than analysts predicted and shows a heightened outlook as more people take the plunge on such a lengthy commitment as a mortgage.

Supporting this buoyancy was the Bank of England, who announced an extra £61bn might be available for the Funding for Lending scheme, intended to propel the economy from the euro zone contagion.

Having been one of the better performing major currencies in recent months, the pound is likely to see further strength today against the euro, whilst should the news from Spain shake investor confidence, a return to the shelter of the yen and dollar is probable.

Key Announcements Today:

• All Day – EUR – German Prelim CPI
• 09.00am – EUR – Italian Retail Sales m/m: an expected contraction to -0.1%
• 09.30am – GBP – BoE Credit Conditions Survey
• 11.00am – GBP – CBI realized sales
• Tentative – EUR – German 10y Bond Auction
• 15.00pm – New Home Sales: 5k increase expected to 381k