By FXEmpire.com
Analysis and Recommendations:
The EUR/USD fell today to trade at 1.3125 after powering up to the 1.32 level on the back of the German ifo data, the euro was unable to sustain. It was a weekend of negative news, including the elections in France which is now down to a runoff between Hollande the favorite and Sarkozy the current with Sarkozy in the rear. This change could shift the entire view of the EU and France.
French election results overnight confirmed that Nicolas Sarkozy and Francois Hollande will face one another in the final runoff election on May 6. Scotia’s European economics team notes that the market consequences of the results (albeit not unexpected) are likely to be not great. Mr Hollande has said that he wants to renegotiate the fiscal compact that was agreed by Mr Sarkozy. In particular, Hollande wants to create more pro-growth measures. For France specifically, the underlying thrust (i.e. pace of tightening) of the domestic fiscal policy plans under Hollande would not be that different to Sarkozy. However, the emphasis is likely to be more dependent on tax hikes than spending cuts.
Dutch Prime Minister Mark Rutte will tender his resignation to Queen Beatrix on Monday, setting the stage for elections, after the weekend collapse of budget talks, news reports said.
Business activity across the 17-nation euro zone contracted at a faster-than-expected pace in April, according to the preliminary purchasing managers’ index, or PMI, readings released Monday by data firm Markit. Manufacturing PMI fell to 46.0
French, Dutch, Spanish and Italian government bonds fell Monday, pushing up yields, while German government bonds rallied on safe-haven.
PMI data release for Germany and the eurozone was a mixed bag of over and under forecast numbers.
The greenback is beginning to see traders position themselves ahead of the FOMC meeting this week, which could have huge effects on the USD.
Economic Data for April 23, 2012 actual v. forecast
|
AUD |
PPI (QoQ) |
-0.3% |
0.4% |
0.3% |
|
CNY |
Chinese HSBC Manufacturing PMI |
49.10 |
48.30 |
|
|
EUR |
French Business Survey |
95 |
96 |
98 |
|
EUR |
French Manufacturing PMI |
47.3 |
47.2 |
46.7 |
|
EUR |
French Services PMI |
46.4 |
50.2 |
50.1 |
|
EUR |
German Manufacturing PMI |
46.3 |
49.0 |
48.4 |
|
EUR |
German Services PMI |
52.6 |
52.3 |
52.1 |
|
EUR |
Manufacturing PMI |
46.0 |
48.2 |
47.7 |
|
EUR |
Services PMI |
47.9 |
49.4 |
49.2 |
|
EUR |
Italian Consumer Confidence |
89.0 |
96.5 |
96.3 |
|
TWD |
Taiwanese Industrial Production (YoY) |
-3.4% |
-6.8% |
8.4% |
|
EUR |
German 12-Month Bubill Auction |
0.074% |
0.077% |
|
|
Wholesale Sales (MoM) |
1.6% |
-1.0% |
-1.1% |
|
|
EUR |
French 3-Month BTF Auction |
0.090% |
0.084% |
|
|
EUR |
French 6-Month BTF Auction |
0.121% |
0.119% |
|
|
EUR |
French 12-Month BTF Auction |
0.250% |
0.249% |
|
|
MXN |
Mexican Retail Sales (YoY) |
7.6% |
5.0% |
4.4% |
Economic Events scheduled for April 24, 2012 that affect the European and American Markets
07:00 EUR Finnish Unemployment Rate 7.40%
The unemployment rate represents the number of unemployed persons expressed as a percentage of the labor force. The unemployment rate for a particular age/sex group is the number of unemployed in that group expressed as a percentage of the labor force for that group.
10:00 EUR Industrial New Orders (MoM) -0.5% -2.3%
Industrial New Orders measures the change in the total value of new purchase orders placed with manufacturers. It is a leading indicator of production. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.
15:00 USD CB Consumer Confidence 70.3 70.8
Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.
15:00 USD New Home Sales 320K 313K
New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated
Government Bond Auctions (this week)
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
Click here for updated EUR/USD News.
Originally posted here
