By FX Empire.com
Economic Events:
Major Economic Reports due this week. Please refer to the daily reports for explaination and forecast
US Markets closed on Monday for Presidents Day Holiday
|
Feb. 21 |
00:30 |
AUD |
Monetary Policy Meeting Minutes |
|
13:30 |
Core Retail Sales (MoM) | ||
|
Feb. 22 |
09:30 |
GBP |
MPC Meeting Minutes |
|
15:00 |
USD |
Existing Home Sales | |
|
Feb. 23 |
09:00 |
EUR |
German Ifo Business Climate Index |
|
13:30 |
USD |
Initial Jobless Claims | |
|
Feb. 24 |
07:00 |
EUR |
German GDP (QoQ) |
|
09:30 |
GBP |
GDP (QoQ) | |
|
15:00 |
USD |
New Home Sales |
EUR/GBP Weekly Fundamental Analysis February 20-24, 2012, Forecast
Historical:
Highest: 1.2336 EUR on 29 Jun 2010.
Average: 1.1548 EUR over this period.
Lowest: 1.0686 EUR on 13 Oct 2009.
Rule:
EUR/GBP: The cross tends to move in ranges, with relatively clear barriers. The narrower ranges made it somewhat harder, but it seems to return to wider ranges. The GBP is does not seem to move in response to the EUR as directly currently. The UK austerity program vs. The EU debt crisis seems to have them moving in opposing distances. They are developing new trading personalities and there is a good deal of profit to be made trading this pair. They can be volatile.
Characteristics
Average broker spread: 2-3 pips
Daily range average : 25-50 pips
What moves EUR/GBP?
- The interest rate differential between the European Bank(ECB) and the Bank of England(BoE)
- European and UK economic data
- Growth differentials between the Euro zone and UK
Trading the EUR/GBP
Applying Technical Analysis and Analyzing Fundamental News from the Euro and UK zone. EUR/GBP is excellent for the beginning forex trader because it’s low volatility.
Analysis and Recommendations
The EUR/GBP is trading today at 0.8302 after peaking on Friday at 0.8333 on unexpected increases in UK retail sales. Most of the week the markets are simply trading Greece, although their was statements from the BoE this week along with the BoE inflation letter. The Bank of England announced an additional round of QE this past week
The euro sailed and dropped all week on Greece. It will most likely continue the same this week.
Towards the end of the week will be GDP reports in the UK which could cause some activity for the pound.
US markets are closed on Monday for the Presidents Day Holiday
Strength
- Greek bailout and PSI deal looking more likely AGAIN, at least that’s what markets think as Greek stocks rally 3.4% on week, European credit CDS narrower, European banks bounce and US stocks continue their march. Merkel and Monti assure the markets.
- German ZEW investor confidence figure rises to best since April
- Initial Jobless Claims fall to lowest since 2008 at 348k, well below estimates of 365k
- Philly and NY manufacturers surveys up but components mixed as headline #’s are not sum of parts
- Housing starts continue to grow for multi-units (apt/condo)
- NAHB home builder index up 4 pts, 3 pts better than expected and highest since May ’07
- India’s wholesale inflation rises at slowest pace since Nov ’09, leaves open room to cut rates
- Australia central bank surprises with a hold on interest rates
- UK announces new round of QE
- Australia and NZ have positive economic reports
- China reduces bank reserves
- ECB deposit facility falls
- Japanese exporters see some breathing room with weaker yen to lowest since July after BoJ embarks on even more QE
Weakness
- Greek saga never ending, ECB wants special treatment old bond new bond swap
- Euro zone GDP in Q4 contracts .3% q/o/q, although touch better than estimates of .4%
- Portugal’s unemployment rate rises to 14% in Q4 from 12.4%, the highest since at least ’98
- Singapore confirms Jan estimate of Q4 GDP contraction
- Japanese economy shrinks more than expected in Q4, BoJ can’t help itself with more QE
- Chinese FDI in Jan falls .3%, 3rd month in a row of declines
- US Jan Retail Sales ex auto’s weaker than expected (but Dec revised up)
- CPI rate of change a below estimate m/o/m, core rate rises to highest since Sept ’08 y/o/y. Overall index at another record high.
Economic Highlights Feb 13-17 actual v. forecast
|
Feb. 14 |
JPY |
Interest Rate Decision |
0.10% |
0.10% |
0.10% |
|
JPY |
BoJ Press Conference | ||||
|
EUR |
German ZEW Economic Sentiment |
5.4 |
-11.6 |
-21.6 |
|
|
GBP |
BOE Inflation Letter | ||||
|
USD |
Core Retail Sales (MoM) |
0.7% |
0.6% |
-0.5% |
|
|
USD |
Retail Sales (MoM) |
0.4% |
0.8% |
0.0% |
|
|
Feb. 15 |
EUR |
German GDP (QoQ) |
-0.2% |
-0.3% |
0.6% |
|
GBP |
Claimant Count Change |
6.9K |
3.2K |
1.9K |
|
|
GBP |
BoE Inflation Report | ||||
|
GBP |
BoE Gov King Speaks | ||||
|
USD |
FOMC Meeting Minutes | ||||
|
Feb. 16 |
USD |
Initial Jobless Claims |
348K |
364K |
361K |
|
USD |
Fed Chairman Bernanke Speaks | ||||
|
Feb. 17 |
GBP |
Retail Sales (MoM) |
0.9% |
-0.2% |
0.6% |
|
CAD |
Core CPI (MoM) |
0.2% |
0.1% |
-0.5% |
|
|
USD |
Core CPI (MoM) |
0.2% |
0.3% |
0.1% |
|
|
USD |
CPI (MoM) |
0.2% |
0.3% |
0.0% |
Sovereign Bond Auction Schedule
Feb 20-24 n/a UK 0.375% 2062 I/L Gilt syndication
Feb 20 10:10 Norway Nok 3bn 4.5% May 2019 DSL
Feb 20 10:10 Slovakia Eur 0.15bn Apr 2014 & Eur 0.05bn Nov 2016 bonds
Feb 21 09:30 Spain 3 & 6M T-bill auction
Feb 21 15:30 UK Details gilt auction on Mar 01
Feb 21 18:00 US Auctions 2Y Notes
Feb 22 10:10 Sweden Nominal bond auction
Feb 22 10:30 Germany Eur 5.0bn Mar 2014 Schatz
Feb 22 16:30 Italy Details CTZ/BTPei on Feb 24 & BOT on Feb 27
Feb 22 18:00 US Auctions 5Y Notes
Feb 23 10:10 Sweden Sek 0.75bn I/L bond auction
Feb 23 16:30 Italy Details BTP/CCTeu on Feb 28
Feb 23 18:00 US Auctions 7Y Notes
Feb 24 10:10 Italy Auctions CTZ/BTP
Originally posted here
