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Europe’s Biggest Economy Stagnates | Markets Weigh US Consumer Data

Published February 14, 2020
  • Quarterly German GDP numbers showed zero-growth in Q4 2019, and just 0.6% for all of 2019.  The data shows that Germany, Europe’s largest economy, was already on the brink of recession pre-coronavirus.  Given the significant trade ties to China, the coronavirus fallout could push the German economy over the edge if the economic impact does not get contained.  Total eurozone growth was just 0.1% in Q4, its lowest rate in seven years.  With the euro already sitting at 34-month lows, the reaction to US consumer data this morning will play a critical role in determining the euro’s direction heading into the long weekend.
  • Markets will get a double dose of US consumer data this morning.  First was Retail Sales data, which rose 0.3% in January, meeting consensus expectations.  However, the control group reading showed no growth, missing market expectations. Coming up at 10:00 am EST is the Michigan Consumer Sentiment Index, which provides insight into consumer confidence in economic activity.  The index is expected to decline modestly but remains among near three-year highs.  The US consumer is an important driver of the economy so both data points could be a key driver for the US dollar today which is already sitting at four-month highs.

To the Clients of EncoreFX:

 

It is with much regret that we inform you that EncoreFX’s (the “Company”) offices are suspending trading effective immediately.

This suspension will give the Company time to consider its restructuring alternatives. The restructuring has become necessary as a number of customers to whom the Company granted credit have defaulted on their obligations to the Company due mainly, we believe, to the rapid changes in the FX market caused by the coronavirus pandemic.

 

In order to provide stakeholders with transparency, the Company has filed an assignment in bankruptcy pursuant to Section 49(1) of the Bankruptcy and Insolvency Act (Canada) (the “BIA”) with respect to its Canadian operations and has assigned its Australian and New Zealand subsidiaries in Voluntary Administration in Australia and New Zealand. 

 

Ernst & Young has been appointed as the licensed insolvency trustee (the “Trustee”) in Canada and as the Administrator in Australia. 

 

Once the Trustee, working with the Company, has determined the best options for the Company and its stakeholders it will share that information with you. Information pertaining to the bankruptcy of EncoreFX will be available, in due course, on the Trustee’s website at: www.ey.com/ca/encorefx.