By FX Empire.com
Economic Event: (GMT)
Jan. 30 Tent EUR German CPI (MoM)
Jan. 31 07:45 EUR French Consumer Spending (MoM)
08:55 EUR German Unemployment Rate
08:55 EUR German Unemployment Change
10:00 EUR Unemployment Rate
Feb. 01 08:30 CHF SVME PMI
09:00 EUR Manufacturing PMI
09:30 GBP Manufacturing PMI
10:00 EUR CPI (YoY)
Feb. 03 09:30 GBP Services PMI
10:00 EUR Retail Sales (MoM)
EUR/CHF Weekly Fundamental Analysis Jan. 30- Feb. 3, 2012, Forecast
Historical
Highest: 1.5193 CHF on 10 Oct 2009.
Average: 1.3271 CHF over this period.
Lowest: 1.026 CHF on 10 Aug 2011.
Rules:
Characteristics
Average broker spread: 3-5 pips
Daily range average: 35-48 pips
What moves:
- The interest rate differential between the European Bank(ECB) and the Swiss National Bank(SNB)
- Swiss and Euro zone fundamentals
Trading the EUR/CHF
News from the Euro and Swiss zone. EUR/CHF is frequently chosen for carry trades which involves going long a high-yielding currency (EURO – 3.50%) against a low-yielding one (CHF – 1.50%). Traders earn daily interest fees when holding this pair long (rollover fees).
Analysis and Recommendations:
The EUR/CHF closed the week at 1.2062 -0.0004 (-0.03%)
The Swiss National Bank reiterated all week that the Swiss Central bank will do all within its power to support the EUR/CHF at 1.20.
The pair moved in tandem to the decline of the USD and the strength in the Euro.
The KOF report this week showed some positive numbers for Switzerland.
Greece seems to be almost behind us and Portugal in front.
Around the world this week:
Italian and Spanish bond yields continue lower, 10 yr in Italy below 6%, Spain’s below 5%
German IFO business confidence rises to 8 month high German consumer confidence at best since April
Euro zone manufacturing and services composite index unexpectedly moves back above 50, led by Germany
US Durable Goods orders in Dec surprise to upside but how much was pulled forward from 2012 due to 12/31 expiration of full depreciation expensing?
Jan US confidence rises to best since Feb ’11
Richmond and KC manufacturing survey’s both rise
Bank of Thailand cuts rates, Reserve Bank of India cuts reserve requirements
Greek Creditors announce agreement, deal to be finalized beginning of the week
Portuguese yields spike, 5 yr CDS up 150 bps on week to new high and CDS insurance skyrockets
Spanish unemployment for Q4 rises to 22.9%
Italian consumer confidence holds at lowest since at least ’96 when survey began
Q4 US GDP rises 2.8%, a touch below expectations but nominal GDP gains just 3.2%, the weakest since Q3 ’09. If deflator was in line with expectations, Real GDP would have been up just 1.3%. Real final sales up just .8% vs. 3.2% in Q3
Initial Jobless Claims normalize at 377k after holiday distorted 356k last week
Inflation expectations within UoM rise to 3.3%, the most since Sept and remains above the 20 yr avg of 3.0%. Expectations also rise to multi month highs in TIPS market
New Home Sales remain weak, prices fall 12.8% y/o/y
FOMC stretches out zero rates until late 2014, US$ resumes downward trend against everything. Fed destroying the price mechanism as if interest rates are artificially priced, what are assets really worth? If we don’t know what assets are really worth, how can capital be efficiently allocated?
Japan’s economy would have boomed over the past 10 yrs.
Fitch rating service downgrades, Belgium, Cyprus, Italy, Slovenia and Spain
Upcoming Sovereign Bond Sales Dates:
Jan 30 10:10 Italy BTP/CCTeu auction
Jan 30 10:10 Norway Nok 4.0bn 5.0% May 2015 bond
Jan 30 11:00 Belgium OLO Auction
Jan 30 12:00 Norway Details bond auction on Feb 06
Jan 31 10:30 Belgium Auctions 3 & 6M T-bills
Jan 31 15:30 UK Details gilt auction on Feb 07
Feb 01 10:10 Sweden Auctions T-bills
Feb 01 10:30 Germany Eur 5.0bn 2.0% Jan 2022 Bund
Feb 01 10:30 Portugal Eur 0.75-1.0bn 3M T-bill
Feb 01 10.30 UK Auctions 5.0% 2025 conventional Gilt
Feb 01 15:30 Sweden Details nominal bond auction on Feb 08
Feb 01 16:00 US
Announces details of 3Y Notes on Feb 07, 10Y Notes on Feb
08 & 30Y Bonds on Feb 09
Feb 02 09:50 France OAT Auction
Feb 02 10.30 UK Auctions 0.125% 2029 I/L Gil
Originally posted here
