By FXEmpire.com
Analysis and Recommendations:
The EUR/GBP opened trading at 0.8094 and declined to 0.8072 as the euro continued to fall against most of its partners.
There was little in the way of eco data from Europe and some disappointing numbers in the UK where CPA was reported slightly below forecast.
Once again, it has been a fairly light day for eco data, so new flow controlled markets, news has also been mixed as the OECD decreases its growth forecast and warns of the potential spillover effects of Europe, the IMF has strong words, the IIF suggests that Spanish banking sector loan losses could be as high as EUR260bn.
Market sentiment remains in risk aversion mode. The risks for Europe are significant and include contagion fears spreading to other European countries, European bank runs, the impact of Greece on financial markets, the banking sector and central bank balance sheets and the patchwork of mechanisms in place to ring fence the problems.
Greece is the immediate concern. The June 17th election, where polls are showing the conservative New Democracy (in favor of remaining within the EMU) with 24.4% of the vote and the radical left Syriza (in favor of breaking the bailout agreements) with 23.8% of the vote and the socialist Pasok (in favor of remaining in the EMU) with 14.5% of the vote. Greece has EUR3.3bn in maturing debt in June and a further EUR4bn in July, with total outstanding debt of EUR367bn. The extreme case, where Greece undergoes another default, with a 70% haircut generates losses of approximately EUR90bn in the private sector and EUR220bn for central banks and the EFSF.
EU Summit tomorrow will be closely watched. French President Hollande has put Eurobonds on the agenda, but there is also the prospect of project bonds, bank recapitalization from the ESM, EU-wide deposit insurance, the risk of a break up and what needs to be done to ring fence it.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.
Economic Data May 22, 2012 actual v. forecast
|
Date |
Time |
Currency |
Event |
Actual |
Forecast |
Previous |
|
May 22 |
04:00 |
NZD |
Inflation Expectations (QoQ) |
2.4% |
2.5% |
|
|
09:00 |
NOK |
Norwegian GDP (QoQ) |
1.4% |
0.8% |
0.6% |
|
|
09:30 |
GBP |
Core CPI (YoY) |
2.1% |
2.2% |
2.5% |
|
|
09:30 |
GBP |
CPI (YoY) |
3.0% |
3.1% |
3.5% |
|
|
09:30 |
GBP |
CPI (MoM) |
0.6% |
0.6% |
0.3% |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
May 23 |
8:00 |
EUR |
-1.3B |
|
|
8:30 |
GBP |
0-0-9 |
||
|
TBD |
EUR |
-1.2% |
||
|
10:00 |
GBP |
-8 |
||
|
TBD |
GBP |
|||
|
14:00 |
USD |
328K |
||
|
14:30 |
USD |
|||
|
May 24 |
6:00 |
CHF |
1.69B |
|
|
7:00 |
EUR |
46.9 |
||
|
7:00 |
EUR |
45.2 |
||
|
7:30 |
EUR |
46.2 |
||
|
7:30 |
EUR |
52.2 |
||
|
8:00 |
EUR |
109.9 |
||
|
8:00 |
EUR |
45.9 |
||
|
8:00 |
EUR |
46.9 |
||
|
8:30 |
GBP |
1.8% |
||
|
8:30 |
GBP |
-0.2% |
||
|
8:30 |
GBP |
31.9K |
||
|
8:30 |
GBP |
-3.3% |
||
|
12:30 |
USD |
|||
|
12:30 |
USD |
-4.0% |
||
|
13:00 |
EUR |
-10.7 |
||
|
May 25 |
6:00 |
EUR |
5.6 |
|
|
7:15 |
CHF |
4.04M |
||
|
TBD |
ALL |
|||
|
13:55 |
USD |
Government Bond Auctions (this week)
Date Time Country
May 23 09:10 Sweden
May 23 09:30 Germany
May 23 14:30 Sweden
May 23 17:00 US
May 24 15:30 Italy
May 24 17:00 US
May 25 15:30 Italy
Click here to read EUR/GBP Technical Analysis.
Originally posted here
