World Economic outlook - European economic outlook 7th December 2011, European economic dec 7 2011 ; After the recent focus on the German 10yr auction and S&P's warning on Eurozone sovereigns, including Germany's AAA rating, there will be much attention paid to the 5yr OBL auction from Germany. The size of the auction is 5bn and it will once again interesting to see how much the market absorbs and how much is held back by the BBk.
The other auctions to focus on come in the form of UK 2032 linker sale and bill sale from Portugal. The BoE is also in the market to remind us why gilts are a safe haven buying 10-25yr gilts for 1.7bn.
The data comes in the form of French trade balance, Italian IP, German IP and UK manufacturing/industrial output. We know there is a lot of bad news so its difficult to see a reaction given that Q4 risks and 2012 difficulties are in the price.
Merkel and Sarkozy promised more details of their Monday meeting on Wednesday so this is one to look out for and IMF's Lagarde is due to speak at 17.30GMT.
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