SCOOOOOORE!!! Despite mixed economic data, the euro triple roundhouse kicked its counterparts yesterday. EUR/USD blasted above the 1.3000 major psychological handle, while EUR/JPY rocketed by 106 pips. So what fired up the euro bulls?
If you guessed Spanish bailout talks, then you better give yourself a pat on the back! Aside from conducting a better-than-expected bond auctions yesterday, my hombres in Spain spread good vibes in the markets when word got around that the government is setting up credit lines to satisfy potential bailout conditions. Of course, it also helped that two German supported Spain, saying that they’re open to setting up a precautionary credit line using the region’s rescue fund.
As for economic reports, we saw the region’s CPI clock in at 2.6% in September, only slightly lower than the 2.7% growth that markets were expecting. The core CPI came in at 1.5% as expected.
Germany’s ZEW economic sentiment report also supported the euro when it printed at -11.5, a bit better than the previous month’s -18.2 reading while the ZEW report for the euro zone inched up to -1.4 from last month’s -3.8 reading.
Lastly, Italy’s trade balance data showed a -0.60 billion EUR deficit after printing a 4.8 billion surplus last month while the euro zone showed a 9.9 billion EUR trade surplus, higher than last month’s 7.2 billion EUR figure.
No reports are expected from the region today, so keep your eyes peeled for more bailout talks from Spain and even Greece!