Eurozone M3 Money Supply Growth at 0.1%, Private Loans Fall

Eurozone M3 Money Supply y/y came in at 0.1% as expected and stronger than prior reading of -0.3%.

Private Loans y/y came in at -0.6%, weaker than the 0.1% expected and -0.1% prior reading.

Eur/Usd sold off about 10 points upon release, currently trading at 1.3484.

German Unemployment Change

February unemployment in Germany was 7,000; much better than the forecast of 18K but still slightly worse than last month’s reading of 6K. The EUR reaction to the release was limited as it approaches the 1.3500 handle.

Eurozone Consumer Confidence

Euro zone consumer confidence was -17; in line with it’s forecast, but was still worse than the prior reading of -16.

Spain is also pressuring the euro….

To add to the previous post; Spain’s problems are also putting pressure on the euro. Currently, Spain has a 19% unemployment rate and a GDP that contracted 3.6% in 2009. It seems as though the same problems that Greece is facing are now popping up in Spain, the euro zone’s fourth largest economy. However, due to its membership in the euro, Spain now lacks the ability to heal its own economy and it is receiving no help from a budget deficit that is now 11.4% of last year’s GDP.

Euro and Asian Stocks Fall on Talks of Greece Downgrade

Moody’s investor services and S&P made comments that they may possibly downgrade Greece’s credit rating once again, which caused the euro to fall to a one year low against the JPY. It reached a rate of 120.74, the lowest level since February 24, 2009.  Additionally, the Nikkei dropped 0.9% and Australia’s S&P/ASK 225 fell 0.9%.  The comments released warned that Greece’s fiscal problems could possibly spread to other nations and continue losses in the euro. It will be interesting to see what happens to the euro when European traders come in later this session….

2-25 Economic Calendar

Euro Makes New Lows for the Week

The EUR/USD pair broke lower early in the Asian session, as USD and JPY buying are moving the markets on a seemingly risk averse move following a mildly positive day for equities globally. On the chart below we see the trendline support that developed off of last weeks lows was broken and the pair is currently ranging at the bottom end of its daily price range. It will be interesting to see if we can test last weeks lows following the negative sentiment on the weaker European economies (namely Greece.)

New Zealand Business Confidence

The New Zealand Business Confidence came in significantly stronger for January at an expansionary reading of 50.1 versus the prior reading of 38.5. However, the Kiwi and the rest of the market have had muted reaction as the USD and JPY are moving risk and commodity pairs lower this session. Business Conditions also improved to a reading of 41.9 versus 36.9 the prior month.