- Euro and DE30 reacting to German developments
- Both fell before recovering
- ECB president Draghi speaking in Brussels
It’s been a fairly volatile day for European markets with both the Euro and the DE30 falling on the latest developments in Germany before recovering as the session progressed. Despite some reassuring comments from German president Steinmeier there remains a cloud of uncertainty around the markets with the political situation in Germany remaining the source of a potential negative shock.
Whilst this story remains the largest driving force on these markets at present there are other factors at play. Elsewhere today, there’s been a speech from ECB president Draghi in Brussels where the Italian has been testifying on the economy and monetary policy. Selected comments form the speech can be found below:
- Economic expansion remains solid and broad based
- Business investment remains on an upswing aided by improvements in corporate profitability
- Underlying inflation dynamics have yet to show convincing signs of a self-sustained trend
- Geopolitical risks and a policy disappointment abroad could cause a market correction
The EURJPY is an interesting pair involving the single currency at the moment with the market today falling to its lowest level in more than 2 months. The dip has been promptly bought but tonight’s close could be key. A close below 131.75 would be a negative development and could be seen as signalling a breakout of the consolidation seen since mid-September.
EURJPY has dipped lower today but is holding key support for now. Source: xStation