By FXEmpire.com
Analysis and Recommendations:
The EUR/USD declined today, trading at 1.2561. The euro is flat to yesterday’s close but has rallied an impressive 4% since its June 1st low of 1.2288. With renewed hope that the recapitalization of the Spanish banking sector is on the horizon, Spain had a relatively successful auction, selling a total of EUR2.1bn in 2, 4 and 10 year maturities. Yesterday, the ECB left rates on hold, but hinted that a rate cut later this year is a possibility. Still, President Draghi made it quite clear that from here most of the burden lies with the governments of Europe and not the central bank. Markets have been unfazed by comments from CIC Chair, Lou Jiwei, that the sovereign wealth fund has decreased its exposure to European stocks and bonds as this message has been well telegraphed to markets on previous occasions. However, it highlights an important (and negative) theme for global investors, ongoing uncertainty in Europe is limiting the ability to justify large exposures to European capital markets. France released a surprisingly high unemployment rate of 9.6%.
There has been a significant bout of USD weakness and currency strength in the first few days of June leaving many wondering if the recent bout of risk aversion has subsided. We have argued for some time that spikes in risk aversion are violent and temporary. Indications that suggest we might be entering a calmer period include that the VIX is well off its high, as is currency vol and the momentum to protect against USD upside in the option market has faded (most risk reversals have scaled back dramatically). However, inter-asset class correlation remains at its highs and there has been only limited resolution to Europe. Today’s testimony by Chair Bernanke was neutral, Bernanke said the Feds were monitors the economy closely but offered no solutions at this time.
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 June 7, 2012 actual v. forecast
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
AUD |
Employment Change |
38.9K |
-5.0K |
15.5K |
|
|
AUD |
Unemployment Rate |
5.1% |
5.1% |
5.0% |
|
|
CHF |
Unemployment Rate |
3.2% |
3.2% |
3.1% |
|
|
GBP |
Halifax House Price Index (MoM) |
0.5% |
0.5% |
-2.4% |
|
|
CHF |
CPI (MoM) |
0.0% |
0.1% |
0.1% |
|
|
GBP |
Services PMI |
53.3 |
52.7 |
53.3 |
|
|
GBP |
Interest Rate Decision |
0.50% |
0.50% |
0.50% |
|
|
GBP |
BOE QE Total |
325B |
325B |
325B |
|
|
USD |
Initial Jobless Claims |
377K |
377K |
389K |
|
|
USD |
Continuing Jobless Claims |
3293K |
3245K |
3259K |
|
|
Ivey PMI |
60.5 |
55.0 |
52.7 |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
Date |
Time |
Currency |
Previous |
|
|
Jun 8 |
8:30 |
GBP |
-1.5% |
|
|
8:30 |
GBP |
3.5% |
||
|
12:30 |
USD |
-51.8B |
||
|
14:00 |
USD |
Government Bond Auctions
Date Time Country
Jun 08 10:00 Belgium
Jun 08 15:30 Italy
Jun 11 09:10 Norway
Jun 11 09:10 Slovakia
Jun 11 09:30 Germany
Jun 11 15:30 Italy
Jun 12 08:30 Holland
Jun 12 09:15 Austria
Jun 12 09:30 Belgium
Jun 12 09:30 UK
Jun 12 14:30 UK
Jun 12 17:00 US
Jun 13 09:10 Italy
Jun 13 09:30 Germany
Jun 13 09:30 Swiss
Jun 13 17:00 US
Jun 14 09:10 Italy
Jun 14 09:30 UK
Jun 14 15:00 US
Jun 14 17:00 US
Click here for further EUR/USD Forecast.
Originally posted here
