Bloc state stands firm as the threat of political upheaval settles
The tide is appearing to shift for the bloc state as the macro-picture in the eurozone is settling on steady ground, especially with Mr Macron now at the helm in France.
For months, if not years, investors have been left speculating over the timing of an apparent ‘downfall’ of the euro, both as a currency and regional state itself. Market participants have debated continually through 2016 the impact of woefully low inflation levels, but figures this morning show these are much a distant memory as April printed a healthy 1.9% annualised figure. With data continuing to impress, the wider outlook has for a substantial amount of time focused on the Populist vote, a worry for both France and Germany. France has passed, and with Merkel gaining ground in key populous states only this week, the threat of animosity towards the democratic state is diminishing rapidly. It therefore isn’t a surprise to see EURUSD at 8-month peaks, with a plethora of UK importers grappling with the idea of 1.2000 possibly not being a short-term target for GBPEUR.
Alex Lydall’s comments on today’s Eurozone CPI print.