The Euro edged higher today on US dollar weakness and hawkish ECB comments. Draghi is the latest ECB member to warn that surging oil has increased inflation risks. Central bank officials are not giving up on their hawkish monetary policy even though growth is clearly slowing.
The German IFO report is the marquee event on the Eurozone calendar this week. With Eurozone industrial production falling by the largest amount in a single month since 1992, it is hard to believe that German business confidence improved. Meanwhile Swiss economic data was slightly better than expected with producer prices beating expectations and the real estate index of family homes edging higher. The Swiss trade balance is due for release tomorrow. The market expects weaker global growth to weigh on export demand.
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