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(eToro Blog) Earlier, a coordinated effort by the world’s central banks was announced geared towards capacity enhancement in order to offer global markets additional liquidity support. The participants include the U.S. Federal Reserve, the Bank of England, the European Central Bank, the Bank of Canada and the Swiss National Bank. The purpose of their collective action is to alleviate the stresses in the financial market, thereby mitigating its effects on the supply of credit to businesses and households alike, and ultimately, to foster economic activity and growth.

Beginning with operations of December 5, 2011 and onward through to February 1, 2013, the central banks have all agreed to reduce their pricing by 50 basis points on the current U.S. Dollar-denominated liquidity swap arrangement; thus the new interest rate will be the U.S. Dollar Overnight Index Swap rate, plus 50 basis points.

Also, and until further notice, the European Central Bank, the Bank of Japan, the Swiss National Bank and the Banks of England will continue to offer 3-month tenders.

Furthermore, as a contingency measure, the participants also agree to the temporary establishment of bilateral liquidity swap arrangements so that liquidity is available in each jurisdiction, as and when needed, as market conditions dictate. Currently, the central banks’ authorities do not believe there is a need to offer liquidity in any alternative currency to the U.S. Dollar, but prudence suggests that the necessary arrangements be in place should the need arise. The establishment of bilateral swap lines would mean that the alternative currencies – the Pound Sterling, Japanese Yen, Swiss Franc, Canadian Dollar and Euro – would be readily available, even at short notice; the bilateral swap lines are intended to be temporary, and will be available until February 1, 2013.

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(eToro Blog) Economic data for Germany this morning began with some mixed news followed by much improved data from the German Statistics Office. On the retail sales front, according to the report, on a month-to-month November retail sales improved beyond analysts’ expectations, rising to 0.7% and besting the consensus call of 0.1%. The data was also well above October’s 0.3%, which was upwardly revised from (negative) -2.9%. Comparatively, though, against the same period a year ago, retail sales declined to (negative) -0.4%, well off the estimate of a 2.0% improvement.

The German Statistics Office also released key labor data for the Eurozone’s powerhouse, reporting that the country’s unemployment rate fell to 6.9% from the previous period’s 7%. More importantly, the unemployment change declined by a drop of (negative) -20,000 as compared to the consensus forecast of (negative) -6,000. The October figure was unchanged at 10,000.

The report which accompanied the labor data indicated that the number of employed individuals in Germany struck a new record high at 41.5 million. They acknowledged, however, that the unemployed individuals still number some 2.19 million on a seasonally adjusted basis, as of October 2011.

While the data is encouraging for the German economy, some observers were eager for the data to be a little less robust, which could compel Germany’s leadership to back a plan for more ECB involvement in the Eurozone crisis. But the German economy has clearly edged forward despite the troubles which surround it; consumer confidence increased for the third consecutive month and business confidence is now on the uptick as well. One report is forecasting that German exports are on track to strike a new record of €1 trillion before the year’s end.

The positive data and the improved outlook for Germany highlight, with near certain conviction, that the Eurozone’s largest economy will remain firmly ensconced in the driver’s seat for the foreseeable future.

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