Much of this weeks focus has been on Spain – home to a record 4.75 million unemployed, 48% of all 16 – 25 year olds without work with an economy that is now officially in recession, having contracted for the last 2 quarters. The 12 month and 18 month debt auctions held by Spain received a solid turnout with investors looking to purchase nearly 3 times as many 1 Year bonds offered and nearly 4 times as many available 18 month bonds. The key 2 year and 10 year auctions held on Thursday raised 2.54 billion Euros via surpassing the targeted 1.5 billion to 2.5 billion Euros. The benchmark 10-year bonds sold at a return of 5.743%, and whilst this is high, the solid turnout and the fact that the yields were less than the ‘unaffordable’ level of 6% gave hope to investors.
Boosting confidence in the Euro was the news that in Germany, the Ifo Business
Climate Index for April increased to a 9 month high at 109.9, up from 109.8 in March, beating an expected drop to 109.5. The Euro made gains on Friday, up 0.61% against the USD, trading at 1.3218.
The greenback found itself under pressure against most major currencies, down 0.66% against the safe haven Swissie and down 0.47% against the commodity linked Aussie.
The Australian Dollar benefited from the rise in commodity prices fueled by a weakened USD. Copper was up 1.76%, valued at 3.392 whilst Gold increased 0.14% on Friday, ending the day valued at 1643.65.
Boosted by renewed hope of consumer demand in Europe Crude Oil enjoyed a 1.32% increase, with a barrel trading at 104.08.
Monday is important for the EUR with manufacturing PMI released in the Eurozone.
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