Eurozone: Politics to the fore – Westpac
|Tim Riddell, Research Analyst at Westpac, explains that it’s going to be a light upcoming week for data which will keep politics to the fore in the Eurozone.
Key Quotes
“Spain’s semi-autonomous Catalonia (20% of Spanish economy) continues to face off against the central government. A declaration of independence might be illegal, but could still trigger constitutional crises in Spain and EU. Catalonia would need to apply for EU membership and await entry into the Eurozone.”
“Brexit negotiations are faltering and EU- 27 may deem that the next stages (trade and cost) cannot proceed, increasing time pressures on Brexit.”
“Although the formation of the next CDUled German coalition should proceed without market concern (even if slowly), potential of Italian elections in H1 18 will raise populist concerns.”
“Despite political concerns, regional data remains strong and implies a very solid outcome for 2H’17. However, that is mostly priced into EUR. Dovish tapering is likely, suggesting that EUR/USD may be contained within a 1.15-1.20 range.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.