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15 May 2013
Forex Flash: No improvement in Eurozone economic - Nomura
FXstreet.com (Barcelona) - Nomura economists Silvio Peruzzo and Stella Wang note that within the realm of Euro area economics, Target2 data shows no major improvements in April.
They note that Target2 balances for Italy and Spain were little changed in April from March, pointing to persisting funding segmentation problems across the euro area. As they have noted in the past, relative to the peak levels reached last summer, absorption of Target2 balances in Spain to date is larger than in Italy. Further, they see that lack of private sector funding is and will likely continue to be accommodated by the ECB liquidity facilities currently in place, but the challenge to finance the real economy will require additional policy response at the country and centralized European level.
They note that Target2 balances for Italy and Spain were little changed in April from March, pointing to persisting funding segmentation problems across the euro area. As they have noted in the past, relative to the peak levels reached last summer, absorption of Target2 balances in Spain to date is larger than in Italy. Further, they see that lack of private sector funding is and will likely continue to be accommodated by the ECB liquidity facilities currently in place, but the challenge to finance the real economy will require additional policy response at the country and centralized European level.