Weak German Manufacturing Data Sends EUR Lower
After the EURUSD hit on overnight high of 1.3625 on the now traditional meltup which precedes that of stocks, courtesy of a very tight EURUSD-ES linkage, the last 4 hours have seen a persistent sell off in the pair on the back of weaker German manufacturing data, which was to be expected: after all Merkel's trade off to keep the dollar weak, and thus stock markets in the US (and Europe by sympathy) strong, was bound to have an impact on Europe's strongest economy. And so it has. Market News has the details: "Industrial orders in Germany fell by a
stronger-than-expected, seasonally-adjusted 3.4% on the month in
December, the Economics Ministry reported on Monday, on expectations of -1.5%, and a +5.2% previous print.
-- Germany December orders m/m below MNI median fcast (-1.9%)
-- Germany November mfg orders unrevised m/m at +5.2%
-- Germany December orders 3-month moving avg (October-December:
-- Germany 4q mfg orders +2.7% q/q, 3q +1.8%, 2q +7.4%
-- Germany December domestic mfg orders -2.4% m/m, foreign -4.2% m/m
-- Germany December foreign mfg orders: EMU +3.7% m/m, non-EMU -8.9%
-- Germany December capital goods orders -6.6% m/m
-- Germany December consumer goods orders -0.1% m/m
-- Germany December basic goods orders +0.6% m/m." Time for the algos to switch to a dollar strength = stock strength regime.
And some more from MNI:
German proposal to help stabilize debt markets hit the papers. Asian
sovereign buying and short covering from Fund managers quickly
reversed move taking out stops through $1.3610 to $1.3624 before
easing to $1.3610. Europe opened but struggled to break offers
$1.3625/30 and looked to challenge semi official bids at $1.3585/90.
Weak german manufacturing data then sent the pair sharply down through
stops $1.3570/60 to a day's low of Y1.3537 as real money sales and
rising treasury yields reignited dollar positivity. Some bids remain
under $1.3540 from real money, Asian sovereigns and funds ahead of
further bids reportedly at $1.3500/05. Focus now on Eurozone speakers
with ECB's Weber speaking at 1300GMT in Talinn and ECB President
Trichet addressing the EU parliament in Brussels at 1400GMT.
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