When the European Central Bank president attended the European Parliament's economic affairs committee Mario Draghi's observations were in line with what could have been expected. The ECB is not, as alleged by the White House, massaging the euro lower to satisfy Germany. The euro is not about to break up: it is "irreversible". Yet the scandal surrounding French presidential candidate François Fillon could leave the way open for the Front National's Marine Le Pen to take over the Élysée Palace and one of her campaign pledges is to take France out of the single currency.
This last week was not the highlight of sterling's long and chequered career. The pound lost one and a quarter euro cents and even contrived to give away a third of a cent to the US dollar. The euro put in an average performance in the middle of the bunch, staying fairly close to the franc and the yen.
Income tax and surcharges
The income brackets and tax rates for personal income tax remain the same as last year and are as follows:
First the Brexit referendum, then Donald Trump. In 2016, investors were surprised by events that pollsters and other experts said wouldn’t happen, although on both occasions stock markets swiftly recovered before reaching new highs.
Uncertainty and political risk remain key themes for financial markets in 2017.
Neither the British nor the Euroland statisticians had much to say for themselves. The monthly round of provisional purchasing managers' indices, in which the UK does not participate, indicated that activity in the €Z private sector continued at a decent clip in January even if not all of the readings met expectations.
With the Greek pensioners' bonus and the Italian banks' temporary liquidity discomfort quietly put to bed the euro went into the New Year looking steady, if uninspired. It ambled through the first week of 2017, enjoying some decent Euroland economic data without really celebrating them.
The purchasing managers' indices, which look at current and anticipated activity in the private sector, were mostly up on the month and better than forecast. Inflation was also higher than expected at a provisional 1.1%.
The European Commission said on Thursday that it would approve the Italian government's cash injection for the troubled lender Monte Paschi di Siena. It is not a bailout (for that would be prohibited by EU rules) it is "liquidity support" to tide it over a difficult patch. Investors had been fairly confident that, true to form, the EU would be able to cobble together a rescue for the bank so there was no reaction by the Euro.
Much of the talk last week surrounded the Italian referendum and although the referendum result had been fairly widely anticipated, there had been doubts that Prime Minister Renzi would carry through his earlier pledge to resign if he lost. This topical conversation continued and to nobody's great surprise Italians rejected Prime Minister Matteo Renzi's referendum proposals for constitutional changes last Sunday. Investors' initial reaction was to mark down the Euro on Monday morning. Then, within an hour and a half, they changed their minds and the Euro forged ahead even though Sig. Renzi's resignation increases the political uncertainty in Italy.
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