EUR/GBP Fundamental Analysis April 19, 2012, Forecast

By FXEmpire.com

Analysis and Recommendations:

The EUR/GBP fell in today’s session trading at 0.8184. Strong news from the UK gave the pound the push it needed to break through its resistance points. Also today, the ECB seemed to be turning its back on the EU saying it was now up to the EU to deal with the problems that the bank had done what it could and bought time for the EU.

April minutes of Bank of England meeting show quantitative-easing advocate Adam Posen dropped his call to expand central bank’s bond-buying program.

Members of the Bank of England’s Monetary Policy Committee voted 8-1 to hold the size of its asset-purchase program, the centerpiece of its quantitative-easing strategy, at 325 billion pounds ($519.3 billion) at their monthly policy meeting

The unemployment rate in the U.K. for the three-month period ending February 2012 came in at 8.3%, down from a prior reading of 8.4%, the Office for National Statistics reported on Wednesday.

The European Central Bank has done enough and it’s up to European nations to “complete the architecture,” according to Jose Vinals, director of the monetary and capital markets department of the International Monetary Fund. “The ECB has bought precious time that political authorities need to use to regain stability and enhance and sustain growth,” said Vinals during a question-and-answer as part of the publication of the global financial stability report. “European authorities need to provide investors with a clear answer where monetary union is going. The answer is more and better euro, not less euro,” he said.

Bad debts held by Spanish banks rose to a fresh 17-year high in February, topping 8% for the first time since October 1994, as companies and households fell further behind on debt payments amid a deepening housing and economic slump.

According to data released Wednesday by the Bank of Spain, 8.16% of the loans held by banks, or EUR143.82 billion, were more than three months overdue for repayment in February, up from 7.91% in January.

The Italian government will delay its plan to reach a balanced budget in 2013 by a year due to a weaker economic outlook, Reuters reported Wednesday, citing a draft document expected to be approved by Prime Minister Mario Monti’s cabinet later.

Economic Reports for April 18, 2012 actual v. forecast

AUD	MI Leading Index (MoM)	0.2%	0.6%
EUR	Current Account	-1.3B	5.0B	3.7B
EUR	Spanish House Price Index (YoY)	-7.20%	-5.90%	-6.80%
GBP	Average Earnings Index +Bonus	1.1%	1.3%	1.3%
GBP	Claimant Count Change	3.6K	7.0K	4.5K
GBP	MPC Meeting Minutes
GBP	Unemployment Rate	8.3%	8.4%	8.4%
CHF	ZEW Expectations	2.1	-8.0	0.0
EUR	German 2-Year Schatz Auction	0.140%	0.310%
EUR	Spanish Trade Balance	-3.75B	-3.90B	-3.65B
USD	MBA Mortgage Applications	6.9%	-2.4%
USD	Crude Oil Inventories	3.856M	1.363M	2.791M
CAD	BoC Monetary Policy Report
USD	Gasoline Inventories	-3.671M	-0.931M	-4.277M

Economic Events scheduled for April 19, 2012 that affect the European and American Markets

14:00:00 EUR Consumer Confidence -19 -20.3

The Consumer Confidence released by the European Commission is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn. A high reading is seen as positive (or bullish) for the EUR, while a low reading is seen as negative (or bearish).

14:00:00 USD Existing Home Sales (MoM) 4.63M 4.59M

The Existing Home Sales, released by the National Association of Realtors provide an estimated value of housing market conditions. As the housing market is considered as a sensitive factor to the US economy, it generates some volatility for the USD. Generally speaking, a high reading is positive for the Dollar, while a low reading is negative.

14:00:00 USD Philadelphia Fed Man 12.2 12.5

The Philadelphia Fed Survey is a spread index of manufacturing conditions (movements of manufacturing) within the Federal Reserve Bank of Philadelphia. This survey, served as an indicator of manufacturing sector trends, is interrelated with the ISM manufacturing Index (Institute for Supply Management) and the index of industrial production. It is also used as a forecast of The ISM Index. Generally, an above-the-expectations reading is seen as positive for the USD.

Government Bond Auction Schedule:

Apr 20 15:30 Italy Details CTZ/BTPei on Apr 24 & BOT on Apr 26

Apr 23-27 n/a UK Re-opened 3.75% 2052 Conventional Gilt syndication (further details tba)

Apr 23 09:30 Germany Eur 3.0bn new Apr 2013 (12M) Bubill

Apr 23 10:00 Belgium OLO Auction cancelled

Apr 23 15:30 Italy Details BTP/CCTeu on Apr 27

Apr 24 00:30 Japan Auctions 20Y JGBs

Apr 24 08:30 Holland Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24 08:30 Spain 3 & 6M T-bill auction

Apr 24 09:10 Italy Auctions CTZ/BTPei

Apr 24 14:30 UK Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24 17:00 US Auctions 2Y Notes

Apr 25 09:10 Sweden Auctions T-bills

Apr 25 09:30 Germany Eur 3.0bn new Jul 2044 Bund

Apr 25 14:30 Sweden Details nominal bond auction on May 02

Apr 25 17:00 US Auctions 5Y Notes

Apr 26 00:30 Japan Auctions 2Y JGBs

Apr 26 09:10 Italy BOT auction

Apr 26 14:30 Sweden Details I/L bond auction on May 03

Apr 26 17:00 US Auctions 7Y Notes

Apr 27 09:10 Italy BTP/CCTeu auction

Originally posted here