BarroMetrics Views:Unexpected Events
Today’s FT has a number of interesting events, events that I’d classify as ‘unexpected’. (An unexpected event is one which changes the underlying sentiment and structure of a market in a way that does not immediately signal the change).
The most important was hidden in the back pages. It said that Mariano Rajoy, the Spanish Prime Minister, on Friday, Mar 2, raised Spain’s deficit target for 2012 notwithstanding that Spain was on of the signatories to a treaty – a treaty that gave effect to German ‘inspired rules for deficit control’. In addition, Spain did this without telling the summit leaders.
Now add this is bit of news to the fact that we have seen a series of poor economic reports from Europe’s most troubled countries, and you have the the making so the unraveling of the treaty later this year.