Economic Events: (GMT)
09:30 GBP BBA Mortgage Approvals 35.3K 34.7K
The British Bankers’ Association (BBA) Mortgage Approvals measures the number of new mortgages approved by BBA-backed banks during the previous month. It includes more than half of the total U.K. mortgage market. It provides information about the buyers in the housing market in the U.K.
A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.
09:30 GBP GDP (QoQ) -0.1% 0.6%
Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.
A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.
09:30 GBP MPC Meeting Minutes
The Monetary Policy Meeting Minutes are a detailed record of the Bank of England’s policy setting meeting, containing in-depth insights into the economic conditions that influenced the decision on where to set interest rates. The breakdown of the MPC members’ interest rate votes tends to be the most important part of the minutes.
11:00 GBP CBI Industrial Trends Orders -19 -23
The Confederation of British Industry (CBI) Industrial Trends Orders measures the economic expectations of the manufacturing executives in the U.K. It is a leading indicator of business conditions. A level above zero indicates order volume is expected to increase; a level below zero indicates expectations are for lower volumes. The reading is compiled from a survey of about 550 manufacturers.
A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.15:00 USD Pending Home Sales (MoM) -0.5% 7.3%
The National Association of Realtors (NAR) Pending Home Sales Report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction.
A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.
19:15 USD Interest Rate Decision 0.25% 0.25%
Federal Open Market Committee (FOMC) members vote on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.
A higher than expected rate is positive/bullish for the USD, while a lower than expected rate is negative/bearish for the USD.
19:15 USD FOMC Statement
The U.S. Federal Reserve’s Federal Open Market Committee (FOMC) statement is the primary tool the panel uses to communicate with investors about monetary policy. It contains the outcome of the vote on interest rates, discusses the economic outlook and offers clues on the outcome of future votes.
A more dovish than expected statement could be taken as negative/bearish for the USD, while a more hawkish than expected statement could be taken as positive/bullish for the USD
GBP/USD Fundamental Analysis Jan. 25, 2012, Forecast
Analysis and Recommendations:
The GBP/USD is currently trading at 1.5598 opening this morning at 1.5567. The greenback edged higher across all currencies as investors grew wary over the Greek negotiations that have drawn on way to long. Today news was reported that the EU Ministers rejected the coupon plan, although a finished plan was not submitted and there have been no agreements between Greece and the IIF, they are now back at the drawing board.
Default becomes more and more a possible scenario. S&P stated today, that they will look at the negotiations as a “selective default”, but a default none the less.
In the UK, government reports showed that the UK debt did not increase as fast as expected but did break the 1 trillion GBP mark for the first time.
Wednesday will be all about news, economic events and statements from the ECB. The markets are reactionary and will respond to each news item. The FOMC statements might give some life to the USD in late afternoon.
Upcoming Govt Bond Sales Dates
Jan 25 10:10 Sweden Nominal bond auction
Jan 25 10:30 Germany Eur 3.0bn 3.25% Jul 2042 Bund
Jan 25 16:30 Italy Details BTP/CCTeu on Jan 30
Jan 25 18:00 US Auctions 5Y Notes
Jan 26 10:10 Italy Auctions CTZ/BTPei
Jan 26 18:00 US Auctions 7Y Notes
Jan 27 10:10 Italy BOT auction
Originally posted here
