EUR/USD Fundamental Analysis April 16, 2012, Forecast

By FXEmpire.com

Analysis and Recommendations:

The EUR/USD dropped back down in today’s session, falling under the 1.31 level to trade at 1.3071 which is also the low for the day.

Mostly today was just negative sentiment from early morning trading on.

China released several reports during the Asian session, which started the day off poorly.

China’s first-quarter economic growth cools to its slowest pace in 11 quarters due to weak export growth and sluggish construction, though analysts view the figures as pointing to a gradual slowing rather than a replay of the 2008 sharp drop in activity.

Slowing Chinese growth will raise expectations of a move to more aggressive stimulus policy. In fact, a stealth stimulus is already underway. Growth in China’s gross domestic product in the first quarter slowed to 8.1% compared to a year ago, down markedly from 8.9%

Real estate investment in China rose 23.5% in the January to March period from a year earlier, according to data released Friday by the National Bureau of Statistics. New construction in terms of floor area increase 0.3% to 399.5 million square feet.

The Chinese economy is stabilizing despite the fact that gross domestic product growth in the first quarter was below many people’s expectations The conditions are favorable for keeping China’s inflation within the target of around 4% this year, Sheng Laiyun, spokesman for the National Bureau of Statistics commented.

This was followed up by more lackluster news in Europe pushing Spain to front row center again.

Spanish stocks and government bond prices came under renewed pressure on Friday after data showed a sharp rise in borrowing by the nation’s banks from the European Central Bank in March. Data released by the Bank of Spain

This was compounded in the US with several releases. The cost of living rose again in March even as the price of gasoline leveled off, the U.S. government reported Friday.

The consumer price index climbed 0.3% last month as the cost of most goods and services rose, the Labor Department said. The increase outstripped the rise in wages, so inflation-adjusted earnings for the average American worker fell 0.1% last month.

Economists expected a 0.2% increase in the cost of living.

Consumer sentiment defies economists’ expectations in early April, easing on worries about current conditions, according to the University of Michigan/Thomson Reuters.

Investors quickly moved from equities and commodities in a flight of safety pushing the USD upwards.

Investors are once again singing that favorite central bank song, written by Ben Bernanke, called Monetary Policy QE blues.

Economic Reports for April 13, 2012 actual v. forecast

JPY	Monetary Policy Meeting Minutes
CNY	Chinese Fixed Asset Investment (YoY)	20.9%	20.8%	21.5%
CNY	Chinese GDP (YoY)	8.1%	8.3%	8.9%
CNY	Chinese Industrial Production (YoY)	11.9%	11.5%	11.4%
CNY	Chinese Retail Sales (YoY)	15.2%	15.0%	14.7%
EUR	German CPI (MoM)	0.3%	0.3%	0.3%
EUR	Finnish CPI (YoY)	2.90%	3.10%
GBP	PPI Input (MoM)	1.9%	1.2%	2.5%
USD	Core CPI (MoM)	0.2%	0.2%	0.1%
USD	CPI (MoM)	0.3%	0.3%	0.4%

Economic Events for April 16, 2012

08:15 CHF PPI (MoM) 0.5% 0.8%

The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, which accounts for the majority of overall inflation.

13:30 USD Core Retail Sales (MoM) 0.6% 0.9%

Core Retail Sales measures the change in the total value of sales at the retail level in the U.S., excluding automobiles. It is an important indicator of consumer spending and is also considered as a pace indicator for the U.S. economy.

13:30 CAD Foreign Securities Purchases -4.19B

Foreign Securities Purchases measures the overall value of domestic stocks, bonds, and money-market assets purchased by foreign investors.

13:30 USD Retail Sales (MoM) 0.4% 1.1%

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.

13:30 USD NY Empire State Manufacturing Index 21.1 20.2

The Empire State Manufacturing Index rates the relative level of general business conditions New York state. A level above 0.0 indicates improving conditions, below indicates worsening

Government Bond Auctions (this week)

Apr 16-30 n/a UK Re-opened 3.75% 2052 Conventional Gilt syndication

Apr 16 09:10 Slovakia Auctions floating rate Nov 2016 & 4.35% Oct 2025 & Bonds

Apr 16 09:10 Norway T-bill auction

Apr 17 08:30 Spain 12 & 18M T-bill auction

Apr 17 09:30 Belgium Auctions 3 & 12M T-bills

Apr 18 09:10 Sweden Nominal bond auction

Apr 18 09:30 Germany Eur 5.0bn 0.25% Mar 2014 Schatz

Apr 18 14:30 Sweden Details T-bill auction on Apr 25

Apr 19 08:30 Spain Obligacion auction

Apr 19 08:50 France BTAN auction

Apr 19 09:30 UK Auctions 0.125% I/L Gilt 2029

Apr 19 09:50 France OATi auction

Originally posted here