By FXEmpire.com
Analysis and Recommendations:
The EUR/USD tumbled all day to trade at this time at 1.2089 cascading right through all support at the 1.22 and 1.21 price.
It was to be an almost quiet start to the week with no major economic data scheduled to release today, except for eurozone consumer confidence, which is seen waning off in July. Markets are likely to focus on PMI from Euro Zone and China (Tuesday), US durable goods orders (Thursday), housing data (Wednesday and Thursday) and most importantly advanced estimate of US second quarter GDP scheduled to be released on Friday. Chinese HSBC flash manufacturing PMI is likely to indicate contraction in manufacturing activity in the world’s second largest economy in July that may increase the prospects of more aggressive monetary easing from its central bank.
Meanwhile German manufacturing PMI is seen improving slightly in July towards its threshold level on 50, yet Euro Zone as a whole is forecast to remain weak. Over to US, the advance estimates of US second quarter GDP will be a market mover. Forecast hints weakening economic growth in world’s largest economy that might reignite hopes of QE3. However, housing sector data probably indicate that the sector is gaining momentum with both new home sales and pending home sales inching up in June. Durable goods orders are also forecast to rise 0.4 per cent in June, after a surprise rise in May. Among the key events this week, ECB and IMF meet in Greece on Tuesday to evaluate the progress will be highly watched out for the latest glimpses in Euro Zone debt crisis amidst deteriorating situation in Spain and Italy.
One catalyst is perhaps renewed German resolve to draw a line in the sand insofar as Greece is concerned. This is being signaled from the top of the house, and coincides with the Troika revisiting Greece to assess its progress in meeting financial aid terms and conditions – one of the four major risks to the week’s market tone that we cited in our Global Views publication on Friday.
German Chancellor Angela Merkel’s #2, Vice Chancellor Philipp Roesler who is also the Economy minister, delivered a weekend interview in which he said that Greece is unlikely to meet its obligations under the terms of its last bail-out and is “very skeptical” that Greece can be rescued in line with its goal of a 120% debt-to-GDP target. Clients that immediately questioned the math behind Greece’s 120% debt-to-GDP target are to be commended for having the resolve to stand against this hollow promise. If Greece doesn’t, Roesler said, then Greece will not receive further aid; indeed markets are digesting rumors’ that current aid may be cut off. That raises market concerns about contagion risk should we be approaching an end game for Greece that may result in further debt restructurings and defaults either within or outside of the euro. A caution, however, is that strong talk before and during Troika visits is not unprecedented
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 23, 2012 actual v. forecast
|
Date |
Time |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Jul. 23 |
01:30 |
TWD |
Taiwanese Unemployment Rate |
4.24% |
4.30% |
4.25% |
|
02:30 |
AUD |
PPI (QoQ) |
0.5% |
0.3% |
-0.3% |
|
|
10:30 |
EUR |
German 12-Month Bubill Auction |
-0.054% |
0.019% |
||
|
13:30 |
USD |
Chicago Fed National Activity |
-0.15 |
-0.48 |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
Date |
Time |
Currency |
Event |
Previous |
|
Jul 24 |
7:00 |
EUR |
French Flash Manufacturing PMI |
45.2 |
|
7:00 |
EUR |
French Flash Services PMI |
47.9 |
|
|
7:30 |
EUR |
German Flash Manufacturing PMI |
45.0 |
|
|
7:30 |
EUR |
German Flash Services PMI |
49.9 |
|
|
8:00 |
EUR |
Flash Manufacturing PMI |
45.1 |
|
|
8:30 |
GBP |
BBA Mortgage Approvals |
30.2K |
|
|
9:00 |
EUR |
Flash Services PMI |
47.1 |
|
|
13:00 |
USD |
Flash Manufacturing PMI |
52.5 |
|
|
Jul 25 |
8:00 |
EUR |
German Ifo Business Climate |
105.3 |
|
8:30 |
GBP |
Prelim GDP q/q |
-0.3% |
|
|
10:00 |
GBP |
CBI Industrial Order Expectations |
-11 |
|
|
13:00 |
EUR |
Belgium NBB Business Climate |
-13.2 |
|
|
14:00 |
USD |
New Home Sales |
369K |
|
|
14:30 |
USD |
Crude Oil Inventories |
||
|
Jul 26 |
6:00 |
EUR |
GfK German Consumer Climate |
5.8 |
|
8:00 |
EUR |
M3 Money Supply y/y |
2.9% |
|
|
12:30 |
USD |
Core Durable Goods Orders m/m |
0.7% |
|
|
12:30 |
USD |
Unemployment Claims |
||
|
14:00 |
USD |
Pending Home Sales m/m |
5.9% |
|
|
Jul 27 |
27th-31st |
GBP |
Nationwide HPI m/m |
-0.6% |
|
All Day |
EUR |
German Prelim CPI m/m |
-0.1% |
|
|
7:00 |
CHF |
KOF Economic Barometer |
1.16 |
|
|
12:30 |
USD |
Advance GDP q/q |
1.9% |
|
|
13:55 |
USD |
Revised UoM Consumer Sentiment |
72.0 |
Government Bond Auctions
Date Time Country
Jul 24 08:30 Netherlands
Jul 24 08:30 Spain
Jul 24 15:30 Italy
Jul 24 17:00 US
Jul 25 09:30 Germany
Jul 25 15:30 Italy
Jul 25 17:00 US
Jul 26 00:30 Japan
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Originally posted here
