By FX Empire.com
Global financial markets are still trading in a Eurocentric mode. The volatility extended on Thursday with the prevailing jitters over the outlook for the euro stability with the tension over Papademos and Monti’s ability to restore confidence especially as protests rise across the nations.
Contagion fears are materializing in pressure, where yields remained elevated and Spain and France had to access markets are rising rates, and especially for Spain that is not sustainable at those levels just shy of 7.0%.
The market continued to fluctuate and the EUR/USD saw slight relief on needed correction and on the hope that the parliaments will ratify the new bailouts and budgets giving a space for markets to test their waters after the confidence motion in the new Greek government passed and the scenario expected as well for Italy.
With the lack of major data on Friday the market movement will remain choppy and volatile, especially with the end of the week. The focus will be on the second vote of confidence on the Monti cabinet and plans in Italy after the Senate vote which is expected late Thursday and likely seen to pass.
Markets will watch any changes on the yields and any sign that Europe is moving. Greece said they started talks with private bondholders on the 50% haircut yet more is needed on the October 26 measures and now it is the EFSF which is needed to at least restore the thought of the ECB as the only solution!
As for the data, Germany will end the week with the Producer Price Index for October at 07:00 GMT which is expected with 0.1% rise after 0.3% and on the year to slow to 5.3% from 5.5%.
The United States will end the week at 15:00 GMT with the Leading Indicators for October which are expected to improve to 0.5% from 0.2%.
Originally posted here
