Eurozone Trade Balance

Eurozone trade balance, which was due out at 6 am, was released earlier than expected and was negative for February coming in at -2.3B versus the forecast of 5.1B and prior reading of 4.3B.

Eurozone Current Account

The eurozone current account was much worse than expected at -8.1B versus 2.9B and the previous showing of 2.3B but the market was unaffected by the release.

Buba President Weber Speaks

Participating in a panel discussion titles “The Aftermath of the Crisis- A Newly Structured World”, Bundesbank President Axel Weber made the following comments:

• We could go in the same direction as the Volcker plan on the issue of proprietary trading.
• Overall net results for systemic banks in Germany are likely to be negative this year.
• Compensation of top managers is an issue that is outside the regulation sphere.
• Changes in rating agencies rules a step in the right direction, we are not fully there yet.
• We have to move away from having regulatory framework that is solely based on rating agencies.
• As a central bank, we probably have to be even more dynamic with haircut procedures.
• The argument for higher inflation totally neglects that we never had a problem moving interest rates at zero bound.
• There is nothing worse than high levels of inflation; price stability is key.
• We should help Greece help itself; measures put forward are credible.
• We need more credible and stringent rules on deficits.
• We should not be too inventive in inventing new tools to tackle problems.

Eurozone CPI

Released at the same time as the German ZEW sentiment number was CPI data also out of the eurozone, whose reading was in line with its forecast.

• CPI (y/y) - Survey: 0.9%   Actual: 0.9%   Prior: 0.9%
• Core CPI (y/y) - Survey: 0.8%   Actual: 0.8%   Prior: 0.9%

German and Eurozone ZEW Economic Sentiment

The EUR traded higher across the board, and made a new high session high against the USD after the release of a  better than expected ZEW economic sentiment out of Germany.  Additionally, the ZEW economic sentiment number for the eurozone was lower at 37.9. The details are as follows:

• German ZEW Economic Sentiment - Survey: 43.5   Actual: 44.5   Prior: 45.1
• Eurozone ZEW Economic Sentiment - Survey: 40.1   Actual: 37.9    Prior: 40.2

Wolfgang Franz, the ZEW President has made the following comments:

• Export oriented industries will drive economic growth.
• German business activity has moved from intensive care to rehad.
• German economy is still far from a full recovery.
• The market has priced in all Greek problems.
• There might be some expectation of a bailout for Greece, but cannot say for sure.
• Inflation expectations are going down; point to a more moderate growth path.

Eurozone Employment Change

The eurozone m/m employment change was -0.3% for February; worse than the survey of 0.2% and prior reading of 0.3%. The market had no reaction.

German Wholesale Price Index

German WPI m/m came in at 0.1%, weaker than the 0.6% expected and the prior reading of 1.3%.

It would appear the weak WPI out of Germany had an effect on Eur/Usd trading. The pair was at its session high of 1.3707 when news broke and has since traded down about 20 point to 1.3687.

UK Consumer Inflation Expectations

The GBP gained mildly against the USD after the release of a slightly better than expected consumer inflation expectation which read 2.5% versus its prior reading of 2.4%.

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