By FXEmpire.com
Analysis and Recommendations:
The EUR/USD added a few pips today, after falling in yesterday’s session. The pair are currently at 1.2549 as the weekend draws to an end
Markets are somewhat divided this today. European and Asian equities sold off in sympathy to yesterday afternoon’s accelerated sell-off in North American equities. Dow futures, however, are in the black. Currency markets are also embracing risk with most of the major crosses higher against the USD. Sovereign debt markets have Spanish and Portuguese 10s rallying, Italian 10s selling off, and the yield on German 10 year bunds up a point. Treasuries are also gently lower on price.
Part of the mixed response relates to the interplay between soured German business confidence figures versus uncertainty ahead of what is a key week for European meetings. Today kicks it off with Europe’s “big four” meeting, including German Chancellor Angela Merkel, French President Francois Hollande, Italian Prime Minister Mario Monti, and Spanish Prime Minister Mariano Rajoy. The Euro area’s 27 finance ministers are also currently meeting. Spain’s formal aid request to the EFSF/ESM apparatus to help capitalize its banks is due Monday. All of this culminates in the EU leaders Summit next Thursday and Friday. Issues include whether aid terms to Greece may be relaxed, the details surrounding Spanish bank recapitalizations, and a potential long-run blue print for the future of the eurozone. The IMF thinks the solution is to spring the spigot at the ECB in favor of accelerated bond buying, regardless of the moral hazard problems that could sharply lessen the odds of requisite economic, fiscal and labor market reforms. Witness the US where exceptionally low Treasury yields translate into what is thus far no real progress on fiscal reforms.
Germany’s IFO survey was the third gloomy economic sentiment barometer to be released this week (June PMI data and the volatile ZEW survey both are tracking at levels consistent with fairly sharp economic contraction). The survey showed that German firms are seeing a general deterioration in the overall business climate, business expectations, and in their assessment of their business’s situation. All three measures are tracking lower than they did during October-November 2011 (Germany’s economy contracted during Q4 2011 by -0.2% q/q). In particular, the manufacturing industry’s assessment of the business situation is markedly lower than it had been during Q4 2011, when it held in fairly strongly even as the other principal sectors of Germany’s economy reported weakness to IFO consistent with levels last seen during 2009. Which raises the point that German sentiment indicators have had a tendency to somewhat overstate the extent of economic weakness in Germany over the past year. The IFO expectations measure plummeted during the fall of 2011 to levels previously seen in Q1 2009- when GDP contracted by -4% q/q (16% annualized). GDP came in at -0.2% (-0.8% annualized)
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 22, 2012 actual v. forecast
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
EUR |
German Ifo Business Climate Index |
105.3 |
105.9 |
106.9 |
|
|
EUR |
German Current Assessment |
113.9 |
112.3 |
113.2 |
|
|
EUR |
German Business Expectations |
97.3 |
99.8 |
100.8 |
|
|
Core CPI (MoM) |
0.2% |
0.3% |
0.4% |
||
|
CAD |
CPI (MoM) |
-0.1% |
0.3% |
0.4% |
|
|
CAD |
CPI (YoY) |
1.2% |
2.0% |
2.0% |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
Date |
Time |
Currency |
Event |
Previous |
|
Jun 25 |
6:00 |
EUR |
GfK German Consumer Climate |
5.7 |
|
25th-30th |
GBP |
Nationwide HPI m/m |
0.3% |
|
|
14:00 |
USD |
New Home Sales |
343K |
|
|
Jun 26 |
8:30 |
GBP |
Public Sector Net Borrowing |
-18.8B |
|
13:00 |
USD |
S&P/CS Composite-20 HPI y/y |
-2.6% |
|
|
14:00 |
USD |
CB Consumer Confidence |
64.9 |
|
|
Jun 27 |
All Day |
EUR |
German Prelim CPI m/m |
-0.2% |
|
8:30 |
GBP |
BBA Mortgage Approvals |
32.4K |
|
|
10:00 |
GBP |
CBI Realized Sales |
21 |
|
|
12:30 |
USD |
Durable Goods Orders m/m |
0.2% |
|
|
14:00 |
USD |
Pending Home Sales m/m |
-5.5% |
|
|
14:30 |
USD |
Crude Oil Inventories |
||
|
Jun 28 |
7:55 |
EUR |
German Unemployment Change |
0K |
|
8:30 |
GBP |
Current Account |
-8.5B |
|
|
8:30 |
GBP |
BOE Credit Conditions Survey |
||
|
8:30 |
GBP |
Final GDP q/q |
-0.3% |
|
|
12:30 |
USD |
Unemployment Claims |
||
|
12:30 |
USD |
Final GDP q/q |
1.9% |
|
|
23:01 |
GBP |
GfK Consumer Confidence |
-29 |
|
|
Jun 29 |
29th-4th |
EUR |
German Retail Sales m/m |
0.6% |
|
6:45 |
EUR |
French Consumer Spending m/m |
0.6% |
|
|
7:00 |
CHF |
KOF Economic Barometer |
0.81 |
|
|
8:00 |
EUR |
M3 Money Supply y/y |
2.5% |
|
|
9:00 |
EUR |
CPI Flash Estimate y/y |
2.4% |
|
|
12:30 |
USD |
Core PCE Price Index m/m |
0.1% |
|
|
12:30 |
USD |
Personal Spending m/m |
0.3% |
|
|
13:45 |
USD |
Chicago PMI |
52.7 |
|
|
13:55 |
USD |
Revised UoM Consumer Sentiment |
74.1 |
Upcoming Government Bond Auctions
Date Time Country
Jun 25 09:10 Norway
Jun 25 09:30 Germany
Jun 25 10:00 Belgium
Jun 25 15:30 Italy
Jun 26 00:30 Japan
Jun 26 08:30 Holland
Jun 26 08:30 Spain
Jun 26 09:10 Italy
Jun 26 09:30 UK
Jun 26 14:30 UK
Jun 26 17:00 US
Jun 27 09:10 Italy
Jun 27 09:10 Sweden
Jun 27 17:00 US
Jun 28 09:10 Italy
Jun 28 17:00 US
Click here to read EUR/USD Technical Analysis.
Originally posted here
