By FXEmpire.com
Analysis and Recommendations:
The EUR/USD is trading at 1.2597
After an encouraging release from the EU summit, which saw the euro soar 2 cents in just a short time, pushing it well above the 1.26 level, but investors are beginning to adjust for the over reaction, markets are adding risk to portfolios. Accordingly, equities are higher, oil is back above $80/barrel, bond yields are mixed, with safe havens like the US, UK and Germany materially higher and Italy, Spain, Greece and Portugal materially lower.
a) The statement released early morning on Friday listed the below points, but said these have not been fully approved.
b) A proposal for a single bank supervisor (including the ECB).
c) Once a single bank supervisor is established, the ESM could have the possibility to recapitalize banks directly.
d) The EFSF will be used until the ESM becomes available.
e) EFSF loans will be then transferred to the ESM without any seniority (the ESM as currently structured has seniority).
f) Strong commitment to do what is necessary.
g) The above to be implemented by July 9, 2012.
There was also a reiteration of the EUR130bn growth pact that the gang of 4 had agreed to last Friday which is now being held hostage by Spain and Italy
This is a significant step forward with a near-term proposal date of July 9th. Establishing a single bank supervisor, rules around seniority and a commitment to do what is necessary are all positive. When we look at the changes that have transpired in the Eurozone over the last several months, we see significant headway.
Overall market sentiment is positive. When expectations for this summit were very low, this plan surprised markets.
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 for June 29, 2012 actual v. forecast
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
JPY |
Unemployment Rate |
4.4% |
4.6% |
4.6% |
|
|
JPY |
Tokyo Core CPI (YoY) |
-0.6% |
-0.7% |
-0.8% |
|
|
JPY |
Industrial Production (MoM) |
-3.1% |
-2.8% |
-0.2% |
|
|
EUR |
French GDP (QoQ) |
0.0% |
0.0% |
0.0% |
|
|
EUR |
French Consumer Spending (MoM) |
0.4% |
-0.1% |
0.7% |
|
|
CHF |
KOF Leading Indicators |
1.16 |
0.85 |
0.80 |
|
|
NOK |
Norwegian Core Retail Sales (MoM) |
1.70% |
0.50% |
-0.20% |
|
|
EUR |
CPI (YoY) |
2.4% |
2.4% |
2.4% |
|
|
USD |
Core PCE Price Index (MoM) |
0.1% |
0.2% |
0.1% |
|
|
GDP (MoM) |
0.3% |
0.2% |
0.1% |
||
|
USD |
Personal Spending (MoM) |
0.0% |
0.1% |
0.1% |
|
|
USD |
Chicago PMI |
52.9 |
52.5 |
52.7 |
|
|
USD |
Michigan Consumer Sentiment |
73.2 |
74.1 |
74.1 |
Upcoming Economic Events for Monday July 2, 2012
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
JPY |
Tankan Large Manufacturers Index |
-4 |
-4 |
||
|
CHF |
Retail Sales (YoY) |
4.5% |
0.1% |
||
|
CHF |
SVME PMI |
45.0 |
45.4 |
||
|
EUR |
Unemployment Rate |
11.1% |
11.0% |
||
|
USD |
ISM Manufacturing Index |
52.5 |
53.5 |
Government Bond Auctions
Jul 02 09:10 Norway
Jul 03 08:30 Holland
Jul 03 09:15 Austria
Jul 03 09:30 Belgium
Jul 03 09:30 UK
Jul 03 14:30 UK
Jul 04 09:30 UK
Jul 05 08:30 Spain
Jul 05 08:50 France
Jul 05 15:00 US
Click here for updated EUR/USD News.
Originally posted here
