Austerity is not working Europe.
Even German data is weak. This morning, retail sales in Germany continued to slump with a -0.3% print in March and February’s reading was revised lower to 0.6%. With the largest economy in the euro zone experiencing pain, many are questioning the German Chancellor’s strategies by Ms. Angela Merkel.
BIG JOBLESS NUMBERS
A key statistic in judging the health of an economy is the unemployment rate. Reducing budget deficits, labor costs and increasing taxes have not helped the following countries’ economies and unemployment rates: France 10.8%, Italy 11.5%, Cyprus 14.0%, Ireland 14.2%, Portugal 17.5%, Greece 27.2% and Spain 27.2%.
WAITING ON ECB
This Thursday, all eyes will be on the European Central Bank (ECB) and their decision if they will cut rates or provide a lending boost. The immediate move before Thursday may be limited euro weakness if we see a break below the psychological 1.30 level.
EURO LEVELS TO WATCH
If we do get a rate cut, traders should be cautious because they may see a euro sell-off that quickly reverses. Key support and potential buying interest may reside near the 1.2850-1.2900 range.
