By FXEmpire.com
Analysis and Recommendations:
The EUR/USD continues to trade under 1.24 holding at 1.2390.
After Asia sold off in sympathy to yesterday’s European and North American moves, European equities found their feet and pushed higher. US markets opened up but turned bearish with US data risk over the next two days. That catalyst for today’s moves so far are fairly weak and primarily rooted in solid German consumer data, as well as comments by ECB President Mario Draghi to the effect that the ECB will continue to play a lender of last resort function to European banks. Currency markets are also embracing risk with most of the major crosses higher against the USD except for the real, won and Taiwanese dollar. US 10s are flat at 1.63%, Spanish 10s rallied and dropped to a still disturbing 6.44%, and Italian 10s also rallied to 5.8%.
Greek polls came in mixed overnight. One poll showed the radical left Syriza party (with a hammer and sickle on its office walls in case you had any doubts) getting 30% of the popular vote and in first place at the expense of the Pasok Party. The other poll put the pro-bail-out-but-hardly-capitalist New Democracy Party in first place. We also show the average of poll results from the end of last week which demonstrates little change from then until now particularly after taking into account survey error. What has changed, however, is that the combined ND and Pasok vote in the freshest polls falls below the 40% share of the popular vote that is the rough threshold for what translates into a majority government in terms of the number of seats. Regardless, it’s the pollsters that are striking it big here, while the rest of us will have to wait until the dust settles after June 17th to see what damage Greek voters have done or averted on behalf of the global economy.
German consumer data came in solid overnight. Retail sales rose more than expected (+0.6% versus 0.2% consensus) and the prior month was revised sharply higher to post growth of 1.6% m/m (double the initial estimate). Germany’s unemployment rate also fell a tick to 6.7% and sits further into record low territory in the post-reunification phase.
US data today was disappointing but gave markets only a moment’s pause, the greenback remained strong, as investors ignored ADP and unemployment data, to wait for Friday’s Nonfarm report. Also US GDP came in a bit down, but current accounts surprised markets overall eco data was neutral today.
The investor sentiments remained unsettled as Spain-driven turmoil continued to engulf market mood. However, any incongruity in these data could have significant bearing on the commodity price movements. With Chinese economy going through a lean patch, all eyes are glued to the government manufacturing figures scheduled for release on Friday, which could further validate the eroding growth in the world’s second largest economy. On the whole, European sentiments are more likely to top headlines and weigh on as seen over past few days.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.
Economic Data for May 31, 2012 actual v. forecast
|
Currency |
Event |
Actual |
Forecast |
Previous |
|
JPY |
Industrial Production (MoM) |
0.2% |
0.5% |
1.3% |
|
AUD |
Building Approvals (MoM) |
-8.7% |
0.7% |
6.0% |
|
AUD |
Private New Capital Expenditure (QoQ) |
6.1% |
4.0% |
-0.7% |
|
CHF |
GDP (QoQ) |
0.7% |
0.1% |
0.5% |
|
GBP |
Nationwide HPI (MoM) |
0.3% |
0.2% |
-0.3% |
|
EUR |
French Consumer Spending (MoM) |
0.6% |
0.3% |
-2.6% |
|
EUR |
German Unemployment Rate |
6.7% |
6.8% |
6.8% |
|
EUR |
German Unemployment Change |
0K |
-5K |
18K |
|
EUR |
CPI (YoY) |
2.4% |
2.5% |
2.6% |
|
USD |
ADP Nonfarm Employment Change |
133K |
148K |
113K |
|
Current Account |
-10.3B |
-11.0B |
-9.7B |
|
|
USD |
Initial Jobless Claims |
383K |
370K |
373K |
|
USD |
GDP (QoQ) |
1.9% |
1.9% |
2.2% |
|
USD |
Continuing Jobless Claims |
3242K |
3250K |
3278K |
|
USD |
Chicago PMI |
52.7 |
56.5 |
56.2 |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
Date |
Time |
Currency |
Previous |
|
Jun 1 |
TBD |
GBP |
|
|
7:15 |
CHF |
4.2% |
|
|
7:30 |
CHF |
46.9 |
|
|
7:45 |
EUR |
43.8 |
|
|
8:30 |
GBP |
50.5 |
|
|
9:00 |
EUR |
10.9% |
|
|
12:30 |
USD |
115K |
|
|
12:30 |
USD |
8.1% |
|
|
12:30 |
USD |
0.0% |
|
|
12:30 |
USD |
0.2% |
|
|
12:30 |
USD |
0.3% |
|
|
14:00 |
USD |
54.8 |
Click here for further EUR/USD Forecast.
Originally posted here
