Gains for the euro thanks to 211 billion euros offered by Germany

Yesterday evening the euro experienced some gains, as Germany offered 211 billion euros ($284 billion), a figure which is guaranteed to save the European economy. The country’s consumers are also doing their part; Germany, where the first Christmas tree was documented 600 years ago, will have the strongest growth out of nine European countries over the holiday season, with consumers increasing budgets by 2.7 per cent, which is outlined in a study from the U.K.’s Centre for Retail Research. Germans may spend about 630 euros per household on gifts, food and drink, travel and decorations, more than the European average of 605 euros.

New Prime Minister-elect appointed in Spain

In the spirit of Greece and Italy, who both recently installed new leaderships Spain formed a new government yesterday, with Mariano Rajoy appointed as Prime Minister-elect. Following the conservative party’s election victory, Investors are hopeful that the tough measures proposed by Rajoy's People's Party will be successful in tackling the worst economic crisis in decades. Despite Rajoy’s election success, the markets seem to have experienced little relief since his appointment.

Today Rajoy will face the first test when Spain attempts to sell up to 3 billion euros ($4 billion) of short-term government debt; the result of these sales will highlight the effect his appointment has had upon reassuring investors about the market.

Economic Data

  • In the UK, Public Sector Net Borrowing has dropped, indicating a lower level of money circulation. This result failed to support the Sterling, which dipped towards 1.5600 level overnight.
  • EMU will release the Consumer Confidence later, with a slight change from -19.9 to -20 according to the consensus. As the Euro is under the great pressure of the crisis it is unlikely that there will be any positive news for the 17-nation currency.
  • In the US, the Gross Domestic Purchases Price Index as well as Gross Domestic Product Annualized, which are tagged as the most important news, are expected to experience a decrease from the previous results. Later we will find more details in FOMC Minutes. If the fundamental comes out as negative as the prediction, it is possible that this could disadvantage for the dollar and US market.

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