Chancellor Merkel and President Sarkozy met yesterday with the aim, as on previous occasions, to find a common French-German position ahead of the upcoming EU Summits on 30th January and early March. As expected the subsequent press conference yielded little in the way of new initiatives, instead they reiterated their commitment towards the measures agreed at the last Summit, including the ‘fiscal compact’. However, Merkel did suggest that the new budget rulebook may be completed ahead of schedule.
Despite the absence of any new information, markets responded positively with the EUR rallying against both sterling and the US dollar while local bond yields also fell.
Today Merkel will meet the IMF Director Christine Lagarde and the focus will be firmly on how quickly the second Greek programme, including the debt restructuring can be carried out. Negotiations between the Greek government and the troika regarding the new loan contract will resume 16th January as the risk of a disorderly Greek default has risen once again.
With the exception of China trade data overnight, there is little in the way of key data out today. French industrial production out early this morning is expected to show that activity rose 0.2% m/m in November following flat growth in October. However, this modest improvement in activity is unlikely to prevent a sharp slowing in overall GDP growth for Q4.
Euro area bond yields fall as markets respond positively to latest French-German talks
No comments:
Post a Comment