By FXEmpire.com
Analysis and Recommendations:
The EUR/USD continues to be weak, trading at 1.2182. . With the exception of Moody’s downgrade on Italy, news flow and fundamental releases have been light. Early in the Asian session, Moody’s cut its rating on Italy from A3 to Baa2, outlook negative. Citing the risk of a sharp increase in its funding costs based on increasingly fragile market confidence, contagion risk and an eroding non-domestic investor base as well as the deterioration in Italy’s economic outlook. Moody’s also cites the size of the EFSF/ESM, noting that “there is a limit to the extent to which these support mechanisms can be used to backstop such a large, systemically important sovereign”.
This brings Moody’s rating to the lowest, with S&P rating Italy BBB+ and Fitch at A-, both with negative outlooks. EUR’s response was relatively small (as was the bond market’s), with EUR dropping less than 30 points on the headlines, but then recovering all of its losses just a few hours later. Downward pressure on EURUSD remains relatively consistent, something that could be characterize as a slow trend lower.
Market sentiments were sanguine after China reported the slowest expansion in three years, fuelling speculation that policy makers could prop up additional stimulus measures. But, slew of data from China this morning is calling for a ground reality check that a hard landing could become inevitable for the economy. In spite of this, markets continue to remain under the grips of fear pertaining to slowing global growth and spreading debt contagion in the Euro region. Being the black Friday the 13th, markets could witness thin volumes and could remain tangential.
PPI reported higher than forecast, giving an added bump to the already strong USD.
Overall, the week was thin on volumes with no real market moves. Now the focus shifts to the Fed chairman Bernanke’s testimony before the senate on monetary policy next week.
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 July 13, 2012 actual v. forecast
|
Date |
Time |
Currency |
Importance |
Event |
Actual |
Forecast |
Previous |
|
Jul. 13 |
03:00 |
CNY |
Chinese Fixed Asset Investment (YoY) |
20.4% |
20.1% |
20.1% |
|
|
03:00 |
CNY |
Chinese GDP (YoY) |
7.6% |
7.6% |
8.1% |
||
|
03:00 |
CNY |
Chinese Industrial Production (YoY) |
9.5% |
9.8% |
9.6% |
||
|
03:00 |
CNY |
Chinese Retail Sales (YoY) |
13.7% |
13.5% |
13.8% |
||
|
05:30 |
JPY |
Industrial Production (MoM) |
-3.4% |
-3.1% |
-3.1% |
||
|
08:15 |
CHF |
PPI (MoM) |
-0.3% |
-0.4% |
-0.2% |
||
|
10:30 |
EUR |
Italian 10-Year BTP Auction |
5.82% |
6.19% |
|||
|
13:30 |
USD |
Core PPI (MoM) |
2.0% |
0.2% |
0.2% |
||
|
13:30 |
USD |
PPI (MoM) |
1.0% |
-0.5% |
-1.0% |
||
|
14:55 |
USD |
Michigan Consumer Sentiment |
73.4 |
73.2 |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
Date |
Time |
Currency |
Event |
Forecast |
Previous |
|
Jul 16 |
7:15 |
CHF |
Industrial Production q/q |
-7.5% |
8.8% |
|
9:00 |
EUR |
CPI y/y |
2.4% |
||
|
12:30 |
USD |
Retail Sales m/m |
-0.2% |
||
|
12:30 |
USD |
Empire State Manufacturing Index |
2.3 |
||
|
14:00 |
USD |
Business Inventories m/m |
0.4% |
||
|
Jul 17 |
8:30 |
GBP |
CPI y/y |
2.8% |
|
|
9:00 |
EUR |
German ZEW Economic Sentiment |
-16.9 |
||
|
9:15 |
ALL |
G7 Meetings |
|||
|
12:30 |
USD |
CPI m/m |
-0.3% |
||
|
13:00 |
USD |
TIC Long-Term Purchases |
25.6B |
||
|
13:15 |
USD |
Industrial Production m/m |
-0.1% |
||
|
Jul 18 |
8:30 |
GBP |
Claimant Count Change |
8.1K |
|
|
8:30 |
GBP |
Unemployment Rate |
8.2% |
||
|
9:00 |
CHF |
ZEW Economic Expectations |
-43.4 |
||
|
12:30 |
USD |
Building Permits |
0.78M |
||
|
12:30 |
USD |
Housing Starts |
0.71M |
||
|
14:30 |
USD |
Crude Oil Inventories |
-4.7M |
||
|
Jul 19 |
6:00 |
CHF |
Trade Balance |
2.48B |
|
|
8:00 |
EUR |
Current Account |
4.6B |
||
|
8:30 |
GBP |
Retail Sales m/m |
1.4% |
||
|
12:30 |
USD |
Unemployment Claims |
|||
|
14:00 |
USD |
Existing Home Sales |
4.55M |
||
|
14:00 |
USD |
Philly Fed Manufacturing Index |
-16.6 |
||
|
Jul 20 |
6:00 |
EUR |
German PPI m/m |
-0.3% |
|
|
8:30 |
GBP |
Public Sector Net Borrowing |
15.6B |
Click here for updated EUR/USD News.
Originally posted here
