Parity between the euro / dollar is now almost perfectly balanced on the currency market: at around 13:00 hours, the euro was trading at 1.3156 (- 0.01%). Slightly increased towards the yen to 106.9. Nothing to report in the forex market on the state of the euro / Swiss franc, which is stable at 1.2021.

‘We expect further depreciation of the euro exchange rate due to weak economic growth and greater uncertainty than those imposed on the United States”, wrote analysts at Barclays Capital yesterday, especially after the first round of Presidential elections in France and disagreements on government budget in the Netherlands. On Saturday, the far-right party of Geert Wilders disassociated themselves from the coalition government specifically budgetary rigor, depriving the prime minister of his majority. A supplementary budget should still be presented this afternoon in Parliament.

Meanwhile, the interest rate differential (spread) between the ten year bonds in the Netherlands and those of Germany, opened this morning at 82 basis points, indicating a relatively deep concern for ‘Bund’ German. It is a bit tight this afternoon at 67 points against 59 points a month ago.

For its part, the “spread” of France / Germany moves away from 150 basis points. According to a North European trader, it is particularly worrying that the PMI in France and Germany fell sharply yesterday. If bad numbers of this kind were to increase, growth forecasts for the euro area would be negative.

“All things being equal,” added Aurel BGC this morning, “and subject to confirmation in the coming months, the decline in April PMI raises the risk of further deterioration of the euro area GDP in the second quarter.”