020 7898 0500The French elections continue to exact positive influence on the euro, while the German IFO hit a six-year high, suggesting that German businesses are optimistic about the next six months. This is seen as a good barometer for future confidence but the results of the second round of the French presidential race could yet spring a surprise.
In terms of interest rates, it was no surprise that the ECB left rates on hold. However, Draghi’s cautious speech disappointed the market. He stated that inflationary pressures ‘remain subdued,’ and went on to say that ‘the risks surrounding the euro area growth outlook, while moving towards a more balanced configuration, are still tilted to the downside’. As a result of his dovish tone, the euro gave up the gains made earlier in the week and dropped down.
Looking to the day ahead, we have German retail sales, the first reading of Spanish GDP as well as Eurozone inflation data coming up.
