Disappointing Data Encourages Risk Aversion As Greece Remains In Spotlight

By David Schutz,

FOCUS :

* Eurozone indus trial production weak in April

* Italian inflation as expected

*Greek headlines continue to suggestpolitical instability, friction with EU

* Euro looks to North American open for possible rally

A rough session for economic data drew to a close today as weak Eurozone data dented confidence in the single currency. April industrial production was weaker than expected on all fronts, despite upward revisions to the previous figures.

The numbers underscored the Eurozone’s deep-rooted growth issues, as the region’s leaders attempt to juggle lagging growth, burdensome sovereign debt, and inflation’s ever-increasing threat.

Meanwhile, Italian inflation numbers and otherminor economic releases were as expected. Italy remains beset by austerity measuresimposed by the German-dominated European Union. The latest stepsout of Rome are intended to reduce unsustainable Italian debtlevels, but have also negatively affected consumerconfidence.

Fundamental focus remained on Greece as the verbal battle between Athens and EU paymaster Germany escalated. In a last-ditch effort to form a government, the leader of the Greek left-wing Syriza party today requested meetings with the leaders of all parties. The leader of moderate-left party Kouvelis has stated he will not take part in a coalition government without the Syriza party.

German Fin ance Min ister Schaeuble today called Greece’scurrent situation “ dreadfully difficult ,” adding that the ECB can’t keepthe Euro stable using monetary policy alone.

European bond spreads widened today as the negative headlines highlighted the global risk-off mood. The Euro weakened against the US Dollar, and was seen pressing towards the yearly lows by 1.2625
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Original Article: http://www.dailyfx.com/forex/market_alert/2012/05/14/Disappointing_Data_Encourages_Risk_Aversion_as_Greece_Remains_in_Spotlight_.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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