Yet upbeat news came from across the Atlantic, as the Purchasing Managers Index for the Manufacturing sector was released from Germany, the Euro Zone, and the U.K all supporting the idea that the Europeans are still far from another slowing American scenarioÃ¢â‚¬Â¦
The PMI slightly slowed in Germany to 54.3 in February from 54.4, well above median forecasts, while for the Euro Zone the PMI remained unchanged at 52.3 supporting the ECB point of view that the EU area remains strong against prospects of slowing global economy, and providing them with more space to focus on rising inflation.
The Euro Zone released their annualized Consumer Price Index for February, inflation came unrevised from the previous estimate and inline with median estimates at 3.2 percent, the ECB are expected to maintain their rates steady at 4.00 percent this week, as they struggle to fight rising inflation yet limited to few options to face it.
While for the U.K the PMI rose above expectations in February to 51.3 from the previous of 50.6, beating median estimates of a 51.0 rise, the U.K economy started to show signs of weakness, which prompted investors into pricing in another 1/4 percentage point cut, since they predict the U.K economy would start slowing down remarkably in a similar U.S story.
the financial markets are loosing their faith slowly, investors bought back the Yen in a huge wave of unwinding of so called carry trades, the Dollar reached 3-year low against the Yen, the Euro also fell to its lowest in 3 weeks against the Yen, while the Pound dropped against the Yen to its lowest since March 2006.
Investors also headed to safe investments and commodities, the gold inclined to set yet another life time record around the $980 levels and seems to be heading steadily towards the $1000 an ounce barrier, while crude oil seems to have settled above the $100 a barrel, increasing by that inflationary pressures; in which no one but oil exporting countries can handle.
This week is marked by rate decisions among various major economies, central banks' members are going to have some intense debates whether they should focus on prospects of a slowing global growth due to a free-falling U.S economy, or rising inflation as their main goal as central banks is to maintain price stabilityÃ¢â‚¬Â¦