By FX Empire.com
The EUR/USD remained under evident downside pressure on Tuesday despite the good macroeconomic data from the euro area and the United States.
Investors are still jittery over the outlook for the euro area and the success prospects for the new government in Greece and Italy, especially with a confidence vote facing Papademos and Monti’s struggle to form a new government.
Clear jitters were reflected on yields as borrowing costs returned to surge once again with Italian 10-year yields rising again above 7.0%, Spain selling at highest cost since 1997 and France also suffering the heat with rising cost and bringing back the threat of downgrade once again.
We can surely say that the sentiment is concentrated on the debt crisis and the lack of confidence is only providing more pressure on the euro and on the nations, pushing them further to an abysmal outlook. On Wednesday the tension will extend with the confidence vote in Greece and the political resistance to new austerity measures that come with the steps towards the second bailout while any progress from Italy will also be watched closely as the new premier tries to mend the gap and find a strong parliamentary backing for his technical government.
The euro area will release the Consumer Price Index for October at 10:00 GMT where it is expected to ease to 0.3% on the month following 0.8% rise while to hold at 3.0% on the year.
The inflation week continues in the United States with the Consumer Price Index for October at 13:30 GMT. The index is expected to remain flat after a gain of 0.3% and on the year to ease to 3.6% from 3.9%. Core CPI is expected is expected to remain at 0.1% in line with September and on the year to rise to 2.1% from 2.0%.
At 14:00 GMT we have September’s TIC flows after Total net TIC Flows rose to $89.6 billion in August.
At 14:15 GMT we have the Industrial Production for October which is expected to rise by 0.4% after 0.2% and Capacity Utilization to rise to 77.7% after 77.4%.
Originally posted here
