020 7898 0500The ECB’s decision to reduce their quantitative easing programme to €30 billion of new bonds per month from January 2018 was largely expected, although the length of the commitment was a bit of a surprise. The euro weakened on the back of the decision and the drop continued on Friday as tensions between Catalonia and Spain came to a head. Catalonia declared independence and the Spanish government imposed direct rule in response. It is a messy situation and the outturn is impossible to see at this juncture.
While the single currency has been remarkably consistent throughout 2017, it has hit a few blips of late. It remains to be seen whether this trend will continue, but economic data from the eurozone continues to be strong. It is policy and political events that have caused the recent drop, rather than economic data. Chances are it’s temporary and it will resume its performance before long.
This week begins with the GDP growth rate from Spain and retail sales and inflation from Germany. We will also see the eurozone business confidence figures later today. Tomorrow sees the release of the eurozone GDP and unemployment rate, while on Thursday we’ll see the German unemployment figures.
