By FX Empire.com
Economic Event: (GMT)
Please check the daily forecast for details on all economic events.
Major Economic Events of the Week
|
Feb. 14 |
10:00 |
EUR |
German ZEW Economic Sentiment |
|
13:30 |
USD |
Core Retail Sales (MoM) |
|
|
13:30 |
USD |
Retail Sales (MoM) |
|
|
Feb. 15 |
07:00 |
EUR |
German GDP (QoQ) |
|
09:30 |
GBP |
Claimant Count Change |
|
|
10:30 |
GBP |
BoE Inflation Report |
|
|
10:30 |
GBP |
BoE Gov King Speaks |
|
|
19:00 |
USD |
FOMC Meeting Minutes |
|
|
Feb. 16 |
13:30 |
USD |
Initial Jobless Claims |
|
Feb. 17 |
09:00 |
EUR |
German Ifo Business Climate Index |
|
09:30 |
GBP |
Retail Sales (MoM) |
|
|
12:00 |
Core CPI (MoM) |
||
|
13:30 |
USD |
Core CPI (MoM) |
|
|
13:30 |
USD |
CPI (MoM) |
Historical
Highest: 1.5193 CHF on 10 Oct 2009.
Average: 1.3271 CHF over this period.
Lowest: 1.026 CHF on 10 Aug 2011.
EUR/CHF Weekly Fundamental Analysis February 13-17, 2012, Forecast
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 1.2093 after hitting a new recent high of 1.2114.
The pair mimicked the movements of all the euro pairs this week, ignoring most fundamental data and responding to the news from Greece going from exhiliration to failure.
The Greek Finance Minister was sent packing back to Greece. The original news stated that the EU was demanding final legislation of the austerity measures before they would consider the approval of the bailout and that they did not want promises. Further news seemed to indicate that the political agreements were short, even with the ECB’s added contributions and agreements to reduce their asset valued.
Most recent reports said that Germany made it clear that Greece missed its debt target and must increase its austerity measures to qualify for the second economic bailout package.
The German Finance Ministry went on to state, “The Greek offer is not sufficient and they have to go away to come back with a revised plan.”
All eyes will be on the Federal Reserve officials to determine if the current policy is viable given the strong recent jobs reports, many Fed watchers are skeptical that the current stated policy to keep interest rates low until 2014 will in fact come to pass. Speeches Tuesday by Philadelphia Fed President and Atlanta Fed President may give insight if there is any concern within the Federal Reserve about the stated policy.
The craziness will continue this week headed to the final deadline date of February 15, 2012.
The Strength
1) Initial Jobless Claims fall to 358k, 12k less than expected and the 4 week average drops to 366k, the least since May ’08
2) Job Openings in monthly BLS data rise to match the highest since Sept ’08
3) MBA said avg 30 yr mortgage rate falls to new low of 4.05% and refi’s jump 9.4%
4) German Factory Orders in Dec rise a bit more than expected
5) China’s PPI moderates to a gain of just .7% y/o/y, the slowest rate since Nov ’09
6) Indonesia unexpectedly cuts rates to 5.75% while RBA and SK sit pat
The Weakness
1) Greece on brink, AGAIN, unemployment rate in Nov hits 20.9% from 18.2% in Oct
2) German exports in Dec, the main driver of their economy, falls 4.3% m/o/m vs an expected decline of just 1%, German IP falls 3% vs est of flat from Nov
3) Euros being redeposited with the ECB overnight remain around 500b, matching the amount borrowed under the LTRO
4) BoE votes for more QE, brings asset purchase program up to 325b pounds.
Economic Reports from last week, actual vs. forecast
|
Feb. 06 |
15:00 |
CAD |
Ivey PMI |
64.1 |
57.8 |
63.5 |
|
Feb. 07 |
03:30 |
AUD |
Interest Rate Decision |
4.25% |
4.00% |
4.25% |
|
03:30 |
AUD |
RBA Rate Statement |
||||
|
15:00 |
USD |
Fed Chairman Bernanke Testifies |
||||
|
Feb. 08 |
21:45 |
NZD |
Unemployment Rate |
6.3% |
6.5% |
6.6% |
|
Feb. 09 |
01:30 |
CNY |
Chinese CPI (YoY) |
4.5% |
4.0% |
4.1% |
|
12:00 |
GBP |
Interest Rate Decision |
0.50% |
0.50% |
0.50% |
|
|
12:45 |
EUR |
Interest Rate Decision |
1.00% |
1.00% |
1.00% |
|
|
13:30 |
USD |
Initial Jobless Claims |
358K |
370K |
373K |
|
|
13:30 |
EUR |
ECB Press Conference |
||||
|
Feb. 10 |
13:30 |
CAD |
Trade Balance |
2.7B |
0.7B |
1.2B |
|
13:30 |
USD |
Trade Balance |
-48.8B |
-48.4B |
-47.1B |
Sovereign Bond Auction Schedule Feb 13-17
Feb 13 10:10 Italy BOT auction
Feb 13 10:10 Norway T-bill auction
Feb 13 10:30 Germany Eur 4.0bn Aug 2012 Bubill
Feb 13 12:00 Norway Details bond auction on Feb 20
Feb 14 09:30 Netherlands Eur 3.0bn-4.0bn Jan 2017 DSL
Feb 14 09:30 Spain 12 & 18M T-bill auction
Feb 14 10:10 Greece 3M T-bill auction
Feb 14 10:10 Italy BTP/CCTeu auction
Feb 14 10:30 Belgium Auctions 3 & 12M T-bills
Feb 15 10:10 Sweden Auctions T-bills
Feb 15 10:30 Portugal Eur 1.5-1.75bn May & Aug T-bills
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
