Economic Events: (GMT)
09:00 EUR ECB Monthly Report
The European Central Bank’s (ECB) monthly report contains the statistical data that policymakers evaluate when setting interest rates. The report also provides detailed analysis of current and future economic conditions from the bank’s perspective.
EUR/GBP Fundamental Analysis February 16, 2012, Forecast
Analysis and Recommendations:
The pair EUR/GBP is currently down at 0.8322 dropping from the high of the day at 0.8402
Supportive news from China also drove gains for the euro earlier in the day. People’s Bank of China Governor Zhou Xiaochuan said that he believes the region can solve its sovereign issues and that China will expand investments in the area.
Overnight deposits with the European Central Bank have hit their second-highest level on record, indicating the euro-zone banking system remains awash with liquidity after the bank’s first three-year loan operation.
Banks deposited EUR524.044 billion with the ECB Tuesday, up from EUR510.234 billion Monday.
The amount parked overnight with the ECB has climbed sharply since late December after banks tapped the central bank for nearly half a trillion euros in three-year loans. Deposits hit an all-time high of more than EUR528 billion in mid-January.
The Bank of England, in its latest quarterly inflation report, said Britain’s annual consumer price inflation rate is likely to fall sharply in coming months and is likely to be below the central bank’s 2% target for much of its two-year forecast period. The report warned that economic growth is likely to remain sluggish in the near term due to weak growth in the country’s export markets and slowing activity in the euro zone.
The Bank of England appears “to be backing up the markets’ assumption that we won’t see policy tightening for at least another two years,” said James Knightley, economist at ING Bank. British annual inflation fell back to 3.6% in January from 4.2% in December. The Bank of England, in its quarterly inflation report, said it expects inflation to continue falling sharply in coming months and projected it to fall below its 2% target for much of the two-year forecasting period.
Bank of England Gov. Mervyn King “did not slam the door on more [quantitative easing], nor did he express a heartfelt desire for more,” said David Watt, currency strategist at RBC Capital Markets. “Inflation two years from now is [seen] largely in-line with the 2% target, which suggests that the BOE is not eager to do more after May. The report indicated that the BOE anticipates being on hold until 2014 Q3.”
The central bank earlier this month further boosted the size of its asset-purchase program, the centerpiece of its quantitative-easing strategy
In Germany, a report showed that Europe’s largest economy shrank less than expected in the final three months of 2011, contracting a seasonally adjusted 0.2%.
German gross domestic product shrank by a seasonally- and calendar-adjusted 0.2% in the fourth quarter of 2011 compared to the previous three months, the federal statistics office, Destatis, reported Wednesday. Compared to the final quarter of 2010, Europe’s largest economy grew by 2%. Economists polled by Dow Jones Newswires had forecast German GDP to shrink by 0.3% on a quarterly basis and to expand 1.8% compared to the final quarter of 2010. France’s statistics agency, Insee, reported GDP saw quarterly growth of 0.2% and expanded 1.7% compared to the final quarter of 2010. Economists had expected French GDP to shrink 0.1% on a quarterly basis
The Italian economy contracted for a second consecutive quarter in the final three months of 2011, meeting a widely-used definition of recession, official data showed Wednesday. The country’s national statistics office, Istat, said preliminary gross domestic product shrank 0.7% in the fourth quarter compared to the previous three months.
Standard & Poor’s Ratings Services on Tuesday lowered the ratings of seven Portuguese financial institutions, including Banco Santander Totta SA, Banco BPI SA, Caixa Geral de Depositos SA, and Banco Comercial Portugues SA. The move follows the downgrade of Portugal’s sovereign rating to BB in January and the revision of the country’s Banking Industry Country Risk Assessment (BICRA) to 7 from 5. The BICRA is scored on a scale from 1 to 10, with group 10 categorized as the highest risk
Wednesday Economic Data actual v. forecast
|
AUD |
New Motor Vehicle Sales (MoM) |
1.3% |
-2.7% |
|
|
KRW |
South Korean Trade Balance |
-2.03B |
-1.96B |
|
|
JPY |
||||
|
SGD |
Singaporean Retail Sales (YoY) |
4.2% |
7.0% |
6.2% |
|
EUR |
French GDP (QoQ) |
0.2% |
-0.2% |
0.3% |
|
EUR |
German GDP (QoQ) |
-0.2% |
-0.3% |
0.6% |
|
EUR |
Spanish CPI (YoY) |
2.0% |
2.0% |
2.4% |
|
SEK |
Swedish GDP (QoQ) |
3.4% |
2.1% |
3.0% |
|
HUF |
Hungarian GDP (YoY) |
1.4% |
0.5% |
1.4% |
|
CZK |
Czech GDP (QoQ) |
0.5% |
0.7% |
1.2% |
|
EUR |
Austrian GDP (YoY) |
1.2% |
2.5% |
|
|
EUR |
Netherlands GDP (YoY) |
-0.7% |
0.3% |
1.1% |
|
EUR |
Italian GDP (QoQ) |
-0.7% |
-0.6% |
-0.2% |
|
GBP |
Average Earnings Index +Bonus |
2.0% |
1.8% |
2.0% |
|
GBP |
Claimant Count Change |
6.9K |
3.2K |
1.9K |
|
GBP |
Unemployment Rate |
8.4% |
8.4% |
8.4% |
|
EUR |
GDP (QoQ) |
-0.3% |
-0.4% |
0.1% |
|
EUR |
Trade Balance |
7.5B |
4.7B |
6.1B |
|
CHF |
ZEW Expectations |
-21.2 |
-50.1 |
|
|
MYR |
5.2% |
4.5% |
5.8% |
|
|
GBP |
BoE Inflation Report |
|||
|
GBP |
BoE Gov King Speaks |
|||
|
USD |
MBA Mortgage Applications |
-1.0% |
7.5% |
|
|
PLN |
Polish CPI (YoY) |
4.1% |
4.3% |
4.6% |
|
USD |
NY Empire State Manufacturing Index |
19.5 |
14.2 |
13.5 |
|
USD |
TIC Net Long-Term Transactions |
17.9B |
62.3B |
61.3B |
Sovereign Bond Auction Schedule Feb 13-17
Feb 16 09:30 Spain Obligacion auction
Feb 16 10.30 UK Auctions 4.5% 2034 conventional Gilt
Feb 16 10:50 France BTA/OATi auction
Feb 16 16:00 US
Announces auctions of 2Y Notes on Feb 21, 5Y Notes on Feb
22 & 7Y Notes on Feb 23
Feb 16 18:00 US Auctions 30Y TIPS
Originally posted here
