The Spanish GDP has been declining over the last 6 months: In Q4 2011 it was 0.3% down while in Q1 2012 the situation recurred. The Spanish Prime Minister shares the central bank’s opinion over a double-dip recession. However, the official stats will come out on April 30th.
The previous recession lasted for 6 months. Hardly did the Spanish economy start recovering when the eurozone crisis broke out. The new government promised to cut the budget spending by 16.5 billion euro this year. The Prime Minister assumes that Spain can do without external help (i.e. ECB and IMF loans). However, Spain ’s public debt keeps increasing.
Yesterday Spain held another bond auction to attract 3.2B euro. The bond yield keeps boosting. Another bond auction is scheduled for today.
In the meantime, Spanish banks keep borrowing while the rate of unemployment has already hit the record-high level of 24.6%. Taking into account multiple reforms seen in the Spanish labor market, the rate of unemployment may escalated further.
Forex.
According to , EURUSD has come out of the 1.3485-1.2994 mid-term range with wave А(С)/shС. The price keeps forming wave С(С)/shС. If the downtrend continues, EURUSD may hit the level of support at 1.2974. In case of a trend reversal, the price may encounter resistance at 1.3172, 1.3212, 1.3386, 1.3485.
