Europe continues to recover defying prevailing pessimism over the outlook

Europe is back with a full load today with top notch fundamentals queued for release detailing the performance of the economy across major sectors. The services sector will be under the scope and so will the aggregate euro economy with the final GDP revision as the data continue to stream our way one day ahead of the awaited rate decisions. 

The week did not start that upbeat for the European continent as sovereign debt woes resurfaced triggering a sell off for the euro and the pound. The euro declined heavily following Market News International report that cited plans by Greece to bypass IMF loans as part of the brokered EU-IMF deal due to the “tough” rules. While for sterling the fear was regarding the outlook for the nation following Brown’s call for May 06 elections.

Though Greece dispersed the rumors yesterday, especially that today an IMF delegation is visiting Athens to provide technical assistance and review the nation’s finances. While for UK the polls are hinting for possibility of a Labour majority according to the latest ICM Ltd poll on Monday.

Adding to the aforesaid facts the dollar strength and the continued positive data from the US economy the pressure is still felt on both European majors as investors reassess the outlook for now. Nonetheless, we are surely certain that both nations will manage to ride the storm especially with continued positive data that assure the set backs so far have not crippled completely the ongoing recovery.

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