Euro Zone M3 Money Supply: Actual 9.3%, Expected 9.1%, Previous 9.5%
Release Explanation: Measurement of the value of cash, currency and cash assets held by the public. Monetary policy controls the supply and cost of money and credit. A central bank will increase the supply of money and decrease the cost of borrowing to stimulate an economy and vice versa to slow down an economy. While measuring the cost of borrowing is fairly easy (yield on Treasury Bonds), measuring the money supply can be a more daunting task.
Trade Desk Thoughts: The M3 number hit the wires at 9.3% higher than what analyst had previously estimated. The number for the month of June was left unrevised at 9.5%. The M3 money read is a very important release for the Euro-area, and is often cited in Mr. Trichet’s speech as a source for inflation. The Euro area M3 was expanding at a very strong pace in the last few quarters, but it seems now the pace of growth is starting to slow
Forex Technical Reaction: Since the release, the euro has strengthened slightly managing to break above the previous day's high. Since the new trading day began the pair has gained approximately 50 pips.