EUR/USD Fundamental Analysis February 16, 2012, Forecast

By FX Empire.com

Economic Events: (GMT)

09:00 EUR ECB Monthly Report

The European Central Bank’s (ECB) monthly report contains the statistical data that policymakers evaluate when setting interest rates. The report also provides detailed analysis of current and future economic conditions from the bank’s perspective.

13:30 USD Building Permits 0.68M 0.67M

Building Permits measures the change in the number of new building permits issued by the government. Building permits are a key indicator of demand in the housing market.

13:30 USD Core PPI (MoM) 0.1% 0.3%

13:30 USD PPI (MoM) 0.3% -0.1%

The Core Producer Price Index (PPI) measures the change in the selling price of goods and services sold by producers, excluding food and energy. The PPI measures price change from the perspective of the seller. When producers pay more for goods and services, they are more likely to pass the higher costs to the consumer, so PPI is thought to be a leading indicator of consumer inflation.

13:30 USD Housing Starts 0.68M 0.66M

Housing starts measures the change in the annualized number of new residential buildings that began construction during the reported month. It is a leading indicator of strength in the housing sector

13:30 USD Initial Jobless Claims 364K 358K

13:30 USD Continuing Jobless Claims 3550K 3515K

Initial and Continuing Jobless claims measures the number of individuals who filed for unemployment insurance for the first time or renewed during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week.

A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.

14:00 USD Fed Chairman Bernanke Speaks

Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to speaky on the economic outlook and recent monetary policy actions, in Washington DC

15:00 USD Philadelphia Fed Manufacturing Index 8.4 7.3

The Philadelphia Federal Reserve Manufacturing Index rates the relative level of general business conditions in Philadelphia. A level above zero on the index indicates improving conditions; below indicates worsening conditions. The data is compiled from a survey of about 250 manufacturers in the Philadelphia Federal Reserve district.

Analysis and Recommendations:

The EUR/USD is down trading at 1.3048 on worries from Greece. In general the economic data released today was positive for the eurozone, but fears on the future of Greece continued to depress the euro. It is trading at the bottom of the range at present and continues to decline.

The positive sentiment in France was further fuelled by data showing that France’s gross domestic product grew 0.2% in the final quarter of 2011, which exceeded analyst expectations.

GDP in the euro zone overall contracted 0.3% for the fourth quarter, shallower than economists’ expectations of a 0.4% slowdown.

In Germany, a report showed that Europe’s largest economy shrank less than expected in the final three months of 2011, contracting a seasonally adjusted 0.2%.

German gross domestic product shrank by a seasonally- and calendar-adjusted 0.2% in the fourth quarter of 2011 compared to the previous three months, the federal statistics office, Destatis, reported Wednesday. Compared to the final quarter of 2010, Europe’s largest economy grew by 2%. Economists polled by Dow Jones Newswires had forecast German GDP to shrink by 0.3% on a quarterly basis and to expand 1.8% compared to the final quarter of 2010. France’s statistics agency, Insee, reported GDP saw quarterly growth of 0.2% and expanded 1.7% compared to the final quarter of 2010. Economists had expected French GDP to shrink 0.1% on a quarterly basis

The Italian economy contracted for a second consecutive quarter in the final three months of 2011, meeting a widely-used definition of recession, official data showed Wednesday. The country’s national statistics office, Istat, said preliminary gross domestic product shrank 0.7% in the fourth quarter compared to the previous three months.

Standard & Poor’s Ratings Services on Tuesday lowered the ratings of seven Portuguese financial institutions, including Banco Santander Totta SA, Banco BPI SA, Caixa Geral de Depositos SA, and Banco Comercial Portugues SA. The move follows the downgrade of Portugal’s sovereign rating to BB in January and the revision of the country’s Banking Industry Country Risk Assessment (BICRA) to 7 from 5. The BICRA is scored on a scale from 1 to 10, with group 10 categorized as the highest risk

Greece will continue to outway economic data until the matter is settled.

Wednesday Economic Data actual v. forecast

AUD	New Motor Vehicle Sales (MoM)	1.3%	-2.7%
KRW	South Korean Trade Balance	-2.03B	-1.96B
JPY	BoJ Monthly Report
SGD	Singaporean Retail Sales (YoY)	4.2%	7.0%	6.2%
EUR	French GDP (QoQ)	0.2%	-0.2%	0.3%
EUR	German GDP (QoQ)	-0.2%	-0.3%	0.6%
EUR	Spanish CPI (YoY)	2.0%	2.0%	2.4%
SEK	Swedish GDP (QoQ)	3.4%	2.1%	3.0%
HUF	Hungarian GDP (YoY)	1.4%	0.5%	1.4%
CZK	Czech GDP (QoQ)	0.5%	0.7%	1.2%
EUR	Austrian GDP (YoY)	1.2%	2.5%
EUR	Netherlands GDP (YoY)	-0.7%	0.3%	1.1%
EUR	Italian GDP (QoQ)	-0.7%	-0.6%	-0.2%
GBP	Average Earnings Index +Bonus	2.0%	1.8%	2.0%
GBP	Claimant Count Change	6.9K	3.2K	1.9K
GBP	Unemployment Rate	8.4%	8.4%	8.4%
EUR	GDP (QoQ)	-0.3%	-0.4%	0.1%
EUR	Trade Balance	7.5B	4.7B	6.1B
CHF	ZEW Expectations	-21.2	-50.1
MYR	Malaysian GDP (YoY)	5.2%	4.5%	5.8%
GBP	BoE Inflation Report
GBP	BoE Gov King Speaks
USD	MBA Mortgage Applications	-1.0%	7.5%
PLN	Polish CPI (YoY)	4.1%	4.3%	4.6%
USD	NY Empire State Manufacturing Index	19.5	14.2	13.5
USD	TIC Net Long-Term Transactions	17.9B	62.3B	61.3B

Sovereign Bond Auction Schedule Feb 13-17

Feb 16 09:30 Spain Obligacion auction

Feb 16 10.30 UK Auctions 4.5% 2034 conventional Gilt

Feb 16 10:50 France BTA/OATi auction

Feb 16 16:00 US

Announces auctions of 2Y Notes on Feb 21, 5Y Notes on Feb

22 & 7Y Notes on Feb 23

Feb 16 18:00 US Auctions 30Y TIPS

Originally posted here