On Friday, data on US Industrial Production was better than expected. Output in February grew 0.7% vs forecast for 0.4% and US Capacity Utilization was 79.6% (maximum from April, 2008) vs expectations for 79.4%. The information supported the growth of the euro, which started during the European session amid the optimism caused by an EU summit. EU governments loosened the shackles on national budgets as the euro-area recession deepens and unemployment rises, with pro-growth appeals coming even from German Chancellor Angela Merkel, the leader which is most closely associated with austerity measures.
Cypriot President Nicos Anastasiades, who bowed to demands by euro-area finance ministers to raise 5.8 bln euros by taking a piece of every bank account in Cyprus, appealed to lawmakers in Nicosia to ratify the levy today. The vote was delayed from Sunday over the opposition of the ECB amid talks to restructure the levy.
At the moment the levy is 6.75% of all deposits up to 100,000 euros and 9.9% above that cuts the euro-area’s bailout of Cyprus to 10 bln euros, down from an original figure of 17 bln euros. The investees will get the banks’ bond certificates, which equal the sum of deducted money. Amid the news the euro dropped 170 points.
This week ZEW Survey (Economic Sentiment) in the Eurozone, data on US Building Permits and US Housing Starts, FOMC Economic Projections will be published. Expectations are optimistic.
Today at 14:00 GMT+4 Trade Balance (sa) in Eurozone in January is revealed. It is expected to be 3.4 bln euros against 12 bln in December.
From the technical point of view, the price will be developing in the range 1.2840 to 1.2918 till the situation on the Cyprus is not settled, after that the price growth on the gap’s closure. If the draft is not adopted, the growth may start even today.
