Dark Day For Ireland

Currencies Direct March 31st 2011 - 2 minute read

On the day that Anglo Irish
chalked up the biggest corporate loss in Irish history, we also get to see the
results of forensic stress tests on the sickest banking system in the
Euro-zone. The tests are expected show that Anglo, Bank of Ireland and Allied
Irish along with several others are in need of further capital injections to
the tune of €30 billion to stay in business. What the stress tests are also
expected to reveal are the size and scope of current mortgage arrears, that is,
how many and how far behind are a sizable portion of Irish households with
their mortgage payments. In terms of the Euro, the expectations is that
recapitalisation number will be large has had little impact in the market as
yet. More focus has been paid to recent reports that the Portuguese do not have
enough cash to meet their debt obligations and a bail-out is almost assured.
Again the news flow is very Euro negative, but the single currency seems to be
able to brush off everything thrown at it. Earlier in the day German
unemployment figures continued to impress, a ray of light in a potentially dark
day.

UK consumer confidence remained at
depressed levels according to figures released yesterday but the Pound remains
off the radar for many in the market. Only month end flows are likely to have
much of an impact today on Sterling’s
fortunes with data today inline with the market expectations. Tomorrow sees the
March PMI figure released, expectations are for a slight decline from last
month, but with a large amount of US data due tomorrow the PMI will be largely
ignored. One piece of information

Non-Farm payrolls are due
tomorrow – if the online employment index, which showed a 9% increase on last
month, is mirrored in the big number then we are looking at a very positive
figure of around 209K for tomorrow and a reasonable degree of USD strength
going into the weekend. Also due tomorrow is the ISM manufacturing survey which
is expected to be flat month on month.

Report by Alistair Cotton

Written by
Currencies Direct

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