Euro Zone update

Earlier today, the ECB announced money supply (Broad Money aggregate M3) in the Euro area grew as expected at an annual 1.2% pace in January and has constantly been decreasing since the high of 3.9% reached in October 2012. In addition, loans to the private sector continued to contract last month (-2.2% vs expectations of -2.1%), going against Draghi’s December expectations at the press conference.

EURUSD broke a minor support area and is now trading below the 1.3700 mark at 1.3660, as uncertainty on the developments in Ukraine trigerred a correction in European equities. The Euro Stoxx 50 index is down 1.30% since yesterday’s high; the DAX is trading slightly above its 9,500 and down 200 points from yesterday’s high despite better-than-expected employment data (number of people out of work decreased by 14K vs 10K expected).

The graph below shows us the correlation between EURUSD (in red) and Euro Stoxx 50 (in green).

(Source: Reuters)

This evening, we will publish an article where we will talk about ECB ‘easing options’ ahead of next week’s meeting (March 6th).

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