It’s been an exceptionally quiet week for data in the eurozone, with the headline being a parlous reading for the ZEW Economic Sentiment Index in Germany, which fell to -53.8 against an expectation of just -33.8. This morning we’ve heard that car registrations in the eurozone dropped by 14% compared to a year ago.
The biggest story of the week has been the euro falling to parity against the US dollar for the first time in 20 years, and a decline against sterling too. However, that changed direction yesterday and the euro strengthened against sterling gradually over the course of the day.
There were no major data release yesterday, which was Bastille Day in France, but President Macron warned that there could be rationing of gas as President Putin “weaponizes” supply. This is likely to have weighed on the euro in the latter part of the day, as did a fresh political crisis in Italy, where Mario Draghi – widely seen as a steady hand – offered to resign as Prime MInister.
