EUR/USD Fundamental Analysis March 14, 2012, Forecast

By FX Empire.com

Analysis and Recommendations:

The EUR/USD is trading at 1.3112 after falling to 1.3052 in early trading brought about on worries over the Spanish deficit. Later in the day the markets rose on new of a positive German ZEW report, the euro began to climb but was stopped midway when US retail sales were released exceed market expectations.

Investors are now positioning themselves for the FOMC decision and minutes due later in the day on Tuesday. There was little news from Europe today, with states and a few indications

Van Rompuy claims that the conclusion of a debt relief program for Greece was the strongest evidence yet that the continent is getting its debt crisis under control.

German investor sentiment jumped sharply in March to its highest level since June 2010. The ZEW, said its sentiment indicator rose to 22.3 from 5.4 in February

Spain will implement further budget cuts requested by EU — Spain says EU “largely accepted” its arguments for leniency on targets.

US Retail sales climbed to a five-month high in February, as rising gasoline prices weren’t enough to choke off demand for cars, clothing and other goods. The Commerce Department said Tuesday that retail sales rose a seasonally adjusted 1.1%

Economic Data March 13, 2012 actual v. forecast

JPY	Tertiary Industry Activity Index (MoM)	-1.7%	0.4%	1.8%
GBP	RICS House Price Balance	-13%	-14%	-16%
AUD	Home Loans (MoM)	-1.2%	-0.1%	2.1%
AUD	NAB Business Confidence	1	4
JPY	Interest Rate Decision	0.10%	0.10%	0.10%
EUR	French CPI (MoM)	0.4%	0.4%	-0.4%
HUF	Hungarian CPI (YoY)	5.9%	5.8%	5.5%
CHF	PPI (MoM)	0.8%	0.3%	0.0%
SEK	Swedish CPI (YoY)	1.9%	1.8%	1.9%
GBP	Trade Balance	-7.5B	-7.8B	-7.2B
EUR	German ZEW Economic Sentiment	22.3	10.5	5.4
EUR	ZEW Economic Sentiment	11.0	3.8	-8.1
USD	Core Retail Sales (MoM)	0.9%	0.8%	1.1%
USD	Retail Sales (MoM)	1.1%	1.0%	0.6%

10:30 GBP Average Earnings Index +Bonus 1.9% 2.0%

10:30 GBP Claimant Count Change 6.0K 6.9K

The Average Earnings Index measures change in the price businesses and the government pay for labor, including bonuses. Claimant Count Change measures the change in the number of unemployed people in the U.K. during the reported month. A rising trend indicates weakness in the labor market, which has a trickle-down effect on consumer spending and economic growth.

11:00 EUR CPI (YoY) 2.7% 2.7%

11:00 EUR Industrial Production (MoM) 0.7% -1.1%

11:00 EUR Core CPI (YoY) 1.6% 1.5%

This is a triple report covering all of the eurozone. The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

13:30 USD Current Account -114.0B -110.0B

The Current Account index measures the difference in value between exported and imported goods, services and interest payments during the reported month. The goods portion is the same as the monthly Trade Balance figure. Because foreigners must buy the domestic currency to pay for the nation’s exports the data can have a sizable affect on the USD.

13:30 USD Import Price Index (MoM) 0.6% 0.3%

The Import Price Index measures the change in the price of imported goods and services purchased domestically.

15:00 USD Fed Chairman Bernanke Speaks

Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to speak. As head of the Fed, which controls short term interest rates, he has more influence over the U.S. dollar’s value than any other person. Traders closely watch his speeches as they are often used to drop hints regarding future monetary policy

Government Bond Auction Schedule (this week)

Mar 14 10:10 Italy BTP/CCTeu auction

Mar 14 10:10 Sweden Auctions T-bills

Mar 14 10:30 Swiss Bond auction

Mar 14 15:30 Sweden Details nominal bond exchange auction on Mar 21

Mar 14 18:00 US Auctions 30Y Bonds

Mar 15 09:30 Spain Obligacion auction

Mar 15 09:50 France BTAN auction

Mar 15 10.30 UK Auctions 4.5% 2042 conventional Gilt

Mar 15 10:50 France OATi auction

Mar 15 16:00 US Announces auction of 10Y TIPS on Mar 22

Originally posted here