The big news from the eurozone on Friday was that Italy could be heading into a recession. Economists at ING said that the Italian economy shared the same difficulties as France and Germany in November, and that the country could be heading into recession. We will know more in the next couple of weeks, but the outlook does not look pretty for the eurozone at present. It will be interesting to see whether the European Central Bank were optimistic or bang on the money with their assessment of the economy.
After what had been a fairly decent week for the euro, on Friday it lost quite a bit of ground against sterling, which benefited from speculation that the Brexit withdrawal deadline could be extended. The single currency had climbed above $1.15 for the first time in a while on Wednesday and Thursday, but it dropped back below that level on the last day of trading. It will be interesting to see how the euro fares over the next few weeks. Last week, I was poring over the euro’s movements throughout 2018 and there was some surprisingly significant moves against the dollar – it lost more than ten cents from February to December, with a difference of almost 13 cents from high to low over the same period.
Today kicks off with the eurozone’s industrial production figures from November which are expected to show a significant drop. In October, year-on-year production hit 1.2%, but it is forecast to drop to -2.1% this time around. Then on Tuesday, we will see the full year’s GDP growth from Germany. The ECB president, Mario Draghi, is also set to deliver a speech.