EUR/USD Fundamental Analysis April 4, 2012, Forecast

By FXEmpire.com

Analysis and Recommendations:

The EUR/USD climbed higher today trading at 1.3329 after rising to 1.3367. The euro was able to maintain strength after a slew of positive data in the US. Factory orders were slightly down, but the NY NAPM and the Redbook far exceeded prior months. Factory orders were positive just below forecast but well above the prior month.

In Europe, the eurozone GDP came in at forecast at a -0.3% although the report made forecast the overall report still has negative sentiment as there is no overall growth. While eurozone PPI came in slightly above forecast at 0.6%.

Unemployment in Spain rose 38,769 in March, or 0.8%, to 4.75 million, the Ministry of Employment and Social Security announced. On an annual basis, unemployment was 9.6% higher in March.

Spain’s Finance Minister Luis de Guindos said in an interview published today that there is “no margin for error” with the 2012 budget announced last week. “From a budget perspective, the government is facing a lose-lose situation,”

Mario Draghi is unlikely to cut Europe’s political leaders any slack when European Central Bank policy makers meet on Wednesday.

Demand for the European Central Bank’s unlimited one-week credit facility climbed slightly last night while remaining at the relatively subdued level seen since the ECB carried out its second three-year loan operation in late February.

In the US automakers had the best month in a long time, March ranks as one of the best months for the three major U.S. car makers in years, as rising gas prices drove sales of gas-sipping models and increased credit availability helped feed pent-up demand.

Economic Events April 3, 2012 actual v. forecast

JPY	Monetary Base (YoY)	-0.2%	12.6%	11.3%
JPY	Average Cash Earnings (YoY)	0.7%	0.2%	-0.9%
AUD	Retail Sales (MoM)	0.2%	0.3%	0.3%
AUD	Interest Rate Decision	4.25%	4.25%	4.25%
AUD	RBA Rate Statement
TRY	Turkish CPI (MoM)	0.41%	0.59%	0.56%
TRY	Turkish PPI (MoM)	0.36%	0.74%	-0.09%
GBP	Construction PMI	56.7	53.5	54.3
EUR	GDP (QoQ)	-0.3%	-0.3%	-0.3%
EUR	PPI (MoM)	0.6%	0.5%	0.8%
GBP	10-Year Treasury Gilt Auction	2.22%	2.18%
BRL	Brazilian Industrial Production (YoY)	-3.9%	-5.8%	-3.4%
USD	Redbook (MoM)	0.70%	0.50%
USD	New York NAPM	551.80	543.10
USD	Factory Orders (MoM)	1.3%	1.5%	-1.1%
USD	Global Semiconductor Sales (MoM)	-1.3%	-2.7%

Economic Events scheduled for April 4, 2012 that affect the European and American Markets

TBD GBP Halifax House Price Index (MoM) -0.3% -0.5%

The Halifax House Price Index measures the change in the price of homes and properties financed by Halifax Bank Of Scotland (HBOS), one of the U.K.’s largest mortgage lenders. It is a leading indicator of health in the housing sector.

09:30 GBP Services PMI 53.5 53.8

The Services Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in the services sector. A reading above 50 indicates expansion in the sector; a reading below 50 indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

10:00 EUR Retail Sales (MoM) 0.1% 0.3%

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.

11:00 EUR German Factory Orders (MoM) 1.2% -2.7%

German Factory Orders measures the change in the total value of new purchase orders placed with manufacturers for both durable and non-durable goods. It is a leading indicator of production.

12:45 EUR Interest Rate Decision 1.00% 1.00%

The six members of the European Central Bank (ECB) Executive Board and the 16 governors of the euro area central banks vote on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

13:00 USD Treasury Secretary Geithner Speaks

U.S. Treasury Secretary Timothy Geithner (January 2009 – January 2013) is to speak. He speaks frequently on a broad range of subjects and his speeches are often used to signal policy shifts to the public and to foreign governments.

13:15 USD ADP Nonfarm Employment Change 200K 216K

The ADP National Employment Reportis a measure of the monthly change in non-farm, private employment, based on the payroll data of approximately 400,000 U.S. business clients. The release, two days ahead of government data, is a good predictor of the government’s non-farm payroll report. The change in this indicator can be very volatile.

13:30 EUR ECB Press Conference

The European Central Bank (ECB) press conference is held monthly, about 45 minutes after the Minimum Bid Rate is announced. The conference is approximately an hour long and has two parts. Firstly, a prepared statement is read, then the conference is open to press questions. The press conference examines the factors which affected the ECB’s interest rate decision and deals with the overall economic outlook and inflation. Most importantly, it provides clues regarding future monetary policy. High levels of volatility can frequently be observed during the press conference as press questions lead to unscripted answers.

15:00 USD ISM Non-Manufacturing Index 57.0 57.3

The Institute of Supply Management (ISM) Manufacturing Purchasing Managers’ Index (PMI) (also known as the ISM Services PMI ) rates the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. The data is compiled from a survey of approximately 400 purchasing managers in the non-manufacturing sector. On the index, a level above 50 indicates expansion; below indicates contraction.

Government Bond Auctions (this week)

Apr 04 08:30 Spain Bono auction

Apr 04 14:30 Sweden Details T-bill auction on Apr 11

Apr 05 08:50 France OAT auction

Apr 05 15:00 US Announces auctions

Apr 05 15:30 Italy Details BOT on Apr 11 & BTP/CCTeu on Apr 12

Originally posted here