By FX Empire.com
The EUR/CHF is still biased south with the star of a new weak as the euro weakness kept the pair biased for swissy gains despite downbeat data from Switzerland.
The dominant euro jitters extended with the start of the week even after Berlusconi stepped down and Mario Monti took the lead while the bond auction found strong demand in the market, yet the high yields and downbeat comments from Merkel assured that the crisis is ongoing.
The five-year bonds were sold at a record yield in the auction form Italy and Merkel said Europe is facing its “toughest hour since WWII” all adding to market jitters and offsetting the franc softness. The producer prices index from Switzerland were more downbeat indications to rising threat of deflation.
The volatility and euro skirmish will continue on Tuesday with the key data set for release, and unless the growth figures prove to be unexpectedly good the downside pressure will remain evident.
Germany will start the day with the GDP for the third quarter at 07:00 GMT where the economy is expected to expand by 0.5% after 0.1% the previous quarter.
From Germany we also have the Zew Survey for November at 10:00 GMT where the Current Situation index is expected to slow to 35.0 from 38.4 and the Economic Sentiment Index to fall further to -52.0 from -48.3.
Turning to the euro area, the GDP is also due at 10:00 GMT where the economy is expected to have contracted as well by 0.2% in the third quarter in line with the pace seen in the second quarter.
The Trade Balance is due at the same time for the month of September which is expected to hold at 1.0 billion euros deficit from the previous month.
Originally posted here
