By FXEmpire.com
Analysis and Recommendations:
The EUR/USD continues to fall today, trading at 1.2835. The euro was fairly steady until the US session. Investors grew weary of the Greece political drama and negative eco data from the EU with no clear position or leadership.
Market sentiments were morose after ambiguous elections left Greece in a political impasse which may threaten austerity measures and reignite concerns over a possible exit from the Euro zone. The reports of 2$bn trading loss incurred by US bank giant JP Morgan Chase & Co. in the last week, shed global equities broadly on speculation that global growth will falter again. Concerns over China’s Industrial output in April and India’s negative IIP data showcased last Friday impaired most of the global commodities. Into the evening, the market is crucially watching the ECB Bond purchase announcement and Euro Area Finance ministers meet could bring more volatility into global markets.
The euro hit its lowest level in nearly four months on Monday after Greek political leaders failed in their latest efforts to form a ruling coalition, keeping investors on edge over the risk of the country exiting the euro zone. Sterling hit a three-week low against the dollar on Friday as risk aversion stemming from U.S. bank losses and political turmoil in Greece boosted the safe-haven U.S. currency. German Bund futures hit new record highs on Friday as investors worried about Greece’s political crisis, the cost of Spain’s banking reforms. Spain will pay high premiums to sell short-term debt, after the government’s latest attempt to fix the banking sector failed to allay concerns about the burden of the clean-up on the country’s finances.
Markets are showing an aversion to risk in the US session, despite a 50 bp RRR cut from China over the weekend, a move that would normally be expected to support risk appetite.
This week contains heavy event risk as Europe continues to drive headlines with ongoing concerns about a Greek exit, and as state elections in Germany is indicating a second consecutive leftward shift away from Merkel’s CDU. French President Hollande will meet German Chancellor Merkel on Tuesday following his inauguration, and leaders of the G8 will meet at Camp David on Friday. Central banks and economic data will help drive market action, given the release of Fed and RBA minutes, in addition to the BoE’s inflation report, as official GDP releases will provide confirmation as to whether the EU is indeed in recession
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, which cover the current week and are published by Sunday before the new week begins.
Economic Data May 14, 2012 actual v. forecast
|
May 14 |
02:30 |
AUD |
Home Loans (MoM) |
0.3% |
-2.0% |
-2.5% |
|
08:15 |
CHF |
PPI (MoM) |
-0.1% |
0.3% |
0.3% |
|
|
10:00 |
EUR |
Industrial Production (MoM) |
-0.3% |
0.4% |
0.8% |
|
|
10:10 |
EUR |
Italian 10-Year BTP Auction |
5.66% |
5.84% |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
May 15 |
06:30 |
EUR |
French CPI (MoM) |
0.8% |
|
07:45 |
EUR |
French Non-Farm Payrolls (QoQ) |
-0.1% |
|
|
09:30 |
GBP |
Trade Balance |
-8.8B |
|
|
May 16 |
09:30 |
GBP |
Average Earnings Index +Bonus |
1.1% |
|
09:30 |
GBP |
Claimant Count Change |
3.6K |
|
|
10:00 |
EUR |
CPI (YoY) |
2.6% |
2.6% |
|
10:00 |
EUR |
Core CPI (YoY) |
1.6% |
|
|
11:00 |
EUR |
Portuguese Unemployment Rate |
14.00% |
Government Bond Auctions (this week)
Date Time Country
May 15 09:30 Belgium
May 15 09:30 UK
May 16 08:50 France
May 16 09:10 Sweden
May 16 09:30 Germany
May 16 09:50 France
Click here for further EUR/USD Forecast.
Originally posted here
