The Euro is stronger today on the back of weak US data. The market has shrugged off the sharp decline in Eurozone industrial orders in anticipation of a stronger German IFO report. Both the German ZEW survey of analyst sentiment and the Belgium business confidence indicator, which are leading indicators for the German IFO report surprised to the upside. Despite higher oil prices, the prospect of another interest rate hike and a strong Euro, the sentiment in Europe remains very optimistic.
The Euro is closing in on its all time high of 1.3667, having already taken out its record high on a closing basis. European officials continue to be relatively nonchalant about the rise in the currency with ECB Tumpell-Gugerell praising the outlook for growth. This leaves the central bank on track to raise rates in June. Meanwhile in Switzerland, we had mixed economic data. The UBS consumption indicator improved from 2.031 to 2.131, but the trade balance deteriorated. Comments from SNB member Hildebrand continue to be supportive of the Swiss franc. He warned that the central is ready to defend the currency if it threatens financial stability. Monetary conditions remain stable, which also keeps the Swiss National Bank on track to raise interest rates in June.