The Euro is also softer against the dollar on the back of a sharp drop in French and Italian industrial production. We have now seen weakness in all of the three big Eurozone countries.
There is a very strong chance that we could see a negative Eurozone industrial production number tomorrow morning as well. ECB officials continued to be hawkish with President Trichet and members Wellink and Hurley reminding the markets that the central bank will do what it takes to curb inflation. Therefore even though the words strongly vigilant disappeared from Trichet?s testimony last week, interest rates could still be increased this year.