Yesterday saw a dramatic strengthening of the euro, due largely to sterling weakness. We saw Spanish employment data come in better than expected, and Producer Price Index (PPI) data for the bloc come in mixed, with year-on-year data as expected, and month-on-month data coming in worse than expected. However, data releases were eclipsed by the suggestion by European Central Bank (ECB) officials that they were ready to taper their quantitative easing policy, with the central bank committee taking an unexpectedly hawkish tone.
Today sees a raft of Services Purchasing Managers’ Index (PMI) data released, with German, Italian and French figures coming out. Retail sales for the EU as a whole will also be released. Though fairly important, these data releases are not top tier, and therefore we are unlikely to see another significant shift in the market due to events in the Eurozone.