21, March 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

Cyprus parliament rejected an unprecedented tax on bank deposits, giving a blow to European plans to force investors to take part in the rescue of the country, pointing out that this decision runs the risk of renewed turmoil in the euro zone.

Cyprus lawmakers voted 36 against 0 against the Eurozone loan, only 19 of them abstained.

As the result the euro fell to a three-month low against the dollar. European officials including Dutch Jeroen Dijsselbloem Finance Minister said that Cyprus should contribute to saving their own, pointing that the situation with Cyprus is unique. German lawmakers said that Cyprus can not get any help, not agreeing to the terms of creditors.

The index of business sentiment in the eurozone for March showed a fall from 42.4 to 33.4, but industrial production in Italy for January showed growth of 0.8% vs. 0.3%, issued permits to build new homes in the U.S. in February were 0.95 million against expectations of 0.93 million, the laying out of new homes at the level of the forecast: 0.92 million y/y.

Investors are already prepared to lose money and we believe that with the introduction of the tax a strong reaction in the market will happen.

We expect business activity indecies in manufacturing and services in France for March at 12:00 MSK.

Indecies data on business activity in the manufacturing and services sector in Germany. We expect good results.

At 13:00 MSK publication of data for the euro area: the business activity in the manufacturing sector is expected to 48.2 against 47.9 in February, the service sector 48.2 against 47.3.