EUR Trading Outlook (12-12-2011)
The Euro (EUR) the initial reaction to the announcement that only the Euro currency 17 would be signing up to a new treaty after UK vetoed caused slight panic in the market but the Europeans reaction was more subdued and they seemed confident the new EU fiscal compact would bring the EU closer together. German also threw cold water on calls for Eurobonds and on ESM getting a banking license and this capped optimism. Bond yields in Italy and Spain initially spiked higher but closed lower. Looking ahead, November German WPI forecast at 0.0% vs. -1% previously.
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