Today’s Comment
Again last week, the euro came under pressure as jitters in relation to the situation in Greece resurfaced. Particularly tensions between Germany and Greece were in focus, as Germany’s Angela Merkel expressed the wish that a mechanism be incorporated in the euro monetary union making it possible to exclude member countries that repeatedly violate the ground rules. Later on, however, the Greek retorted when an unnamed Greek civil servant was reported to have said that the Greek authorities are increasingly pessimistic about the possibilities of receiving a commitment of financial assistance from the EU, and he indicated that Greece might seek help from the International Monetary Fund (IMF) over Easter – an opportunity which the EU has otherwise rejected stating that the problems in Greece are an internal affair to be solved within the EU.
Hence the battle lines are drawn prior to the EU summit in Brussels commencing on Thursday, 25 March, and the markets will undoubtedly follow statements from this summit very closely. However, the president of the EU Commission, José Manuel Barroso, tried to calm down things Friday night when he encouraged the EU leaders as soon as possible to reach agreement on a mechanism that will ensure that Greece gets the necessary assistance that it needs. So far it does not, however, seem that the euro is off the hook, and probably the coming week will see more jitters in connection with the single European currency.
This coming week will see PMI indices for the euro zone as well as the IFO index from Germany. Also, on Wednesday, Norges Bank will make its interest-rate announcement – which is expected with much anxiety. The market is divided on the question whether Norges Bank will raise its rate or wait to do so until its meeting in May. Even though in respect of the decision, the central bank is balancing on a knife's edge, we tend to believe that the rate will be kept unchanged.
Today’s Key Events
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09:00 M3 money supply (CHF)
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09:00 Monthly report from the SNB (CHF)
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11:00:00 quarterly report from the SNB (CHF)
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16:00:00 Consumer confidence (EUR)
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16:30:00 Speech by ECB’s Trichet (EUR)
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00:50 Minutes of the interest rate meeting of the BoJ (JPY)
Today’s Chart – EUR/USD (incl. 50- and 200-day moving averages)
