Economic Events 28/06/2013

06:00 GBP Nationwide HPI (MoM)

Forecast: 0.3% Previous: 0.4%

The Nationwide Housing Price Index (HPI) measures the change in the selling price of homes with mortgages backed by Nationwide. It is the U.K.’s second earliest report on housing inflation. 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.

06:45 EUR French Consumer Spending (MoM)

Forecast: -0.1% Previous: 0.3%

French Consumer Spending measures the change in the inflation-adjusted value of all goods expenditures by consumers. Consumer spending accounts for the majority of economic activity. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

07:00 CHF KOF Leading Indicators

Forecast: 1.19 Previous: 1.10

The KOF Leading Indicators Index is designed to predict the direction of the economy over the following six months. The index is a composite reading of 12 economic indicators related to banking confidence, production, new orders, consumer confidence and housing. A higher than expected reading should be taken as positive/bullish for the CHF, while a lower than expected reading should be taken as negative/bearish for the CHF.

08:00 NOK Norwegian Core Retail Sales (MoM)

Forecast: 0.40% Previous: -0.60%

Retail sales data represents total consumer purchase from retail stores. It provides valuable information about consumer spending which makes up the consumption part of GDP. A higher than expected reading should be taken as positive/bullish for the NOK , while a lower than expected reading should be taken as negative/bearish for the NOK.

08:00 NOK Norwegian Unemployment Rate

Forecast: Previous: 3.70%

LFS-Labour Force Survey. Three-months moving average. Employed persons are persons aged 16-74 who performed work for pay or profit for at least one hour in the survey week, or who were temporarily absent from work because of illness,holidays etc. Conscripts are classified as employed persons. Persons engaged by government measures to promote employment are also included if they receive wages. Unemployed persons are persons who were not employed in the survey week,but who had been seeking work during the preceding four weeks, and were available for work within the next two weeks. Persons in the labour force are either employed or unemployed. The remaining group of persons is labelled not in the labour force. Unemployed persons and persons not in the labour force constitute the group non-employed persons. A higher than expected reading should be taken as negative/bearish for the NOK , while a lower than expected reading should be taken as positive/bullish for the NOK.

11:30 INR Indian Foreign Debt (USD)

Forecast: Previous: 376.30B

The portion of a country’s debt that was borrowed from foreign lenders including commercial banks, governments or international financial institutions. A lower than expected number should be taken as positive to the INR, while a higher than expected number as negative.

12:00 EUR German CPI (MoM)

Forecast: 0.1% Previous: 0.4%

The German Consumer Price Index (CPI) measures the changes in the price of goods and services purchased by consumers. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

12:00 EUR German CPI (YoY)

Forecast: 1.7% Previous: 1.5%

The German Consumer Price Index (CPI) measures the changes in the price of goods and services purchased by consumers. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

12:30 CAD GDP (MoM)

Forecast: Previous: 0.2%

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. Canada releases fresh GDP data on a monthly basis. A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.

13:45 US Chicago PMI

Forecast: 56.0 Previous: 58.7

The Chicago Purchasing Managers’ Index (PMI) determines the economic health of the manufacturing sector in Chicago region. A reading above 50 indicates expansion of the manufacturing sector; a reading below indicates contraction. The Chicago PMI can be of some help in forecasting the ISM manufacturing PMI. 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.

13:55 US Michigan Consumer Sentiment

Forecast: 83.0 Previous: 82.7

The University of Michigan Consumer Sentiment Index rates the relative level of current and future economic conditions. There are two versions of this data released two weeks apart, preliminary and revised. The preliminary data tends to have a greater impact. The reading is compiled from a survey of around 500 consumers. 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.

Disclaimer: The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

Daily Market Review 28/06/2013

Britain’s top share index, the FTSE 100, has edged higher this morning, heading for what should be its first week of real gains since mid-May, driven by more moderate rhetoric on stimulus from Federal Reserve officials.

The gains, however, are not expected to prevent British blue chips from posting a monthly loss for the first time in over a year, breaking their longest run of monthly gains since mid-1990s.

Bolstered by Fed reassurances, traders are on the lookout for bargains and the FTSE 100 is now up 14.88 points, or 0.2 percent, at 6,258.28 points by 0732 GMT. This has therefore taken its gains for the week so far to 2.3 percent,

Two Fed officials said on Thursday the U.S. central bank will not be in a hurry to scale back equity-friendly stimulus unless the economy really picks up.

“It seems pretty positive (for equities) … There is a bit of focus on the words from the Fed to try and backtrack on what they’ve put out in the last few weeks and the data hasn’t been superb, so (the stimulus pullback) …may not begin at the end of the year,” said Vinay Sharma, trader at Gekko Global Markets.

Chris Stevenson at Barclays Stockbrokers said clients who had taken profits at the height of the recent rally were moving back in.

“Across the last 5 business days, which have seen the FTSE 100 hit its lowest level since the beginning of January this year, on average 64 percent of daily trades have been purchases,” he said.

Industrial metals and miners – the worst performers so far this year – are proving to be the biggest gainers so far. More defensive consumer staples also did well.

Unilever and Diageo have also both gained around 1 percent after Goldman Sachs added the two companies to its Conviction List, saying the recent market pullback had created “a rare and attractive opportunity to buy structural winners whose fundamentals remain intact”.

Shares around the world have also hit their highest levels in a week today, as bonds and oil have risen after two U.S. central bankers moved to calm fears of an early withdrawal of monetary stimulus.

Their efforts, combined with better economic data from Japan and an easing of credit concerns in China have lifted MSCI’s world equity index 0.5 percent, putting it on course to reverse five weeks of losses.

The broad FTSE Eurofirst 300 index, which opened higher in line with other world markets, pared the gains as end of quarter positioning took hold, leaving it on course to end June lower after a record 12 monthly rises, and earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.4 percent, pulling even further away from an 11-month low and wiping out this week’s losses. It is still down around 7 percent for the year however.

  Disclaimer: The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

Daily Market Review 27/06/2013

European shares and bonds have managed to hold on to recent gains so far today, whilst gold and the euro are gaining after data suggested the U.S. Federal Reserve may have to leave its stimulus program in place for a little longer.

European shares on the FTSEurofirst 300 opened flat this morning after a 3.2 percent jump in the last two days, and the bonds of governments from Germany to Greece continued to claw back ground lost last week.

“Whenever there is good news out of the U.S. it will cause selling because people see it as a confirmation for Fed tapering, while if we have something more disappointing like yesterday people will say, ‘Well OK, it won’t happen yet’,” said Tobias Blattner, an economist at Daiwa Securities.

The euro is off yesterday’s three-week low against the dollar at $1.3024 after the weaker U.S. data had put pressure on the greenback, and ECB policymakers have been out in force in recent days saying that unlike the Fed, they remain ready to cut rates if needed.

Gold has risen 1 percent to $1,237 an ounce after tumbling 12 percent over the past 8 sessions.

US Stocks however have rallied for the second day running, recouping some recent losses on reduced concern that the Federal Reserve will begin to withdraw its stimulus in the near future.

The broad-based advance lifted the S&P 500 above the 1,600 threshold for the first time since last Thursday. Stocks have recently sold off after the Fed said it is moving closer to reducing its monthly bond-buying efforts, but the last two days of buying show some believe the market has overreacted.

A1l 10 of the S&P 500 industry sectors have gained, with the healthcare and utilities sectors leading the way. Johnson & Johnson was the S&P 500’s second-biggest mover. The healthcare company’s stock rose 1.9 percent to $86.99.

“The market is broadly being traded up today, and I think there are a lot of people out there that are trying to put cash to work and get out of fixed income,” said Brian Amidei, managing director and partner at HighTower Palm Desert in Palm Desert, California.

The rally followed data showing the U.S. economy grew at an annual rate of 1.8 percent in the first quarter, well below expectations for gross domestic product to grow at a 2.4 percent annual rate.

While the GDP data looks backward and includes the start of cutbacks in federal spending, analysts said it could influence the Fed’s considerations of whether the economy is strong enough for it to begin scaling back its $85 billion a month in bond purchases. Should this contribute to keeping the Fed from moving sooner, it would be seen as supportive for stocks.

Stocks have been closely tied to the central bank’s easy money policy, with the Dow and the S&P 500 hitting a series of record closing highs as investors bet that the bond buying would remain in place, and then dropping dramatically on hints that the stimulus could be reduced before the end of the year. U.S. Treasury bond prices rose, causing bond yields to fall. Lower bond yields enhance the appeal of equities.

The Dow Jones industrial average is was last night up 149.83 points or 1.02 percent, to end at 14,910.14. The S&P 500 gained 15.23 points or 0.96 percent, to finish at 1,603.26. The Nasdaq Composite added 28.34 points or 0.85 percent, to close at 3,376.22.

The CBOE Volatility Index, or VIX, Wall Street’s favorite barometer of investor anxiety, is down 6.8 percent to 17.21.

 Disclaimer: The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

Economic Events 27/06/2013

07:55 EUR German Unemployment Change

Forecast: 8K Previous: 21K

German Unemployment Change measures the change in the number of unemployed people during the previous month. A higher than expected reading should be taken as negative/bearish for the EUR, while lower than expected reading should be taken as positive/bullish for the EUR.

07:55 EUR German Unemployment Rate

Forecast: 6.9% Previous: 6.9%

The German unemployment rate measures the percentage of the total work force that is unemployed and actively seeking employment during the reported month. A higher than expected reading should be taken as negative/bearish for the EUR, while a lower than expected reading should be taken as positive/bullish for the EUR.

08:30 GBP Current Account

Forecast: -11.8B Previous: -14.0B

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 GBP. 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.

12:30 US Continuing Jobless Claims

Forecast: 2,950K Previous: 2,951K

Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance. A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.

12:30 US Core PCE Price Index (MoM)

Forecast: 0.1% Previous:

The Core Personal Consumption spending (PCE) Price Index measures the changes in the price of goods and services purchased by consumers for the purpose of consumption, excluding food and energy. Prices are weighted according to total expenditure per item. It measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation. 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.

12:30 US Initial Jobless Claims

Forecast: 345K Previous: 354K

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.

12:30 US Personal Spending (MoM)

Forecast: 0.3% Previous: -0.2%

Personal Spending measures the change in the inflation-adjusted value of all spending by consumers. Consumer spending accounts for a majority of overall economic activity. However, this report tends to have a mild impact, as government data on retail sales is released about two weeks earlier. 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.

14:00 US Pending Home Sales (MoM)

Forecast: 1.0% Previous: 0.3%

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.

22:45 NZD Building Consents (MoM)

Forecast: Previous: 18.5%

Building Consents (also known as Building Permits) measures the change in the number of new building consents issued by the government. Building consents are a key indicator of demand in the housing market. A higher than expected reading should be taken as positive/bullish for the NZD, while a lower than expected reading should be taken as negative/bearish for the NZD.

23:00 KRW South Korean Industrial Production (YoY)

Forecast: Previous: 1.7%

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. A higher than expected reading should be taken as positive/bullish for the KRW, while a lower than expected reading should be taken as negative/bearish for the KRW.

23:00 KRW South Korean Industrial Production (MoM)

Forecast: Previous: 0.8%

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. A higher than expected reading should be taken as positive/bullish for the KRW, while a lower than expected reading should be taken as negative/bearish for the KRW.

23:30 JPY Tokyo Core CPI (YoY)

Forecast: 0.2% Previous: 0.1%

The Tokyo Core Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers in Tokyo, excluding fresh food. A higher than expected reading should be taken as positive/bullish for the JPY, while a lower than expected reading should be taken as negative/bearish for the JPY.

23:30 JPY Tokyo CPI (YoY)

Forecast: Previous: -0.2%

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer at the metropolitan area of Tokyo. It is a key way to measure changes in purchasing trends and inflation. The impact on the currency may go both ways, a rise in CPI may lead to a rise in interest rates and a rise in local currency, on the other hand, during recession, a rise in CPI may lead to a deepened recession and therefore a fall in local currency.

23:50 JPY Industrial Production (MoM)

Forecast: 0.2% Previous: 0.9%

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. A higher than expected reading should be taken as positive/bullish for the JPY, while a lower than expected reading should be taken as negative/bearish for the JPY.

23:50 JPY Industrial Production forecast 1 (MoM)

Forecast: Previous:

Industrial Production Index is an economic indicator that measures changes in output for the manufacturing, mining, and utilities. Although these sectors contribute only a small portion of GDP, they are highly sensitive to interest rates and consumer demand. This makes Industrial Production an important tool for forecasting future GDP and economic performance. A higher than expected number should be taken as positive to the JPY, while a lower than expected number as negative.

23:50 JPY Industrial Production forecast 2 (MoM)

Forecast: Previous: -1.4%

Industrial Production Index is an economic indicator that measures changes in output for the manufacturing, mining, and utilities. Although these sectors contribute only a small portion of GDP, they are highly sensitive to interest rates and consumer demand. This makes Industrial Production an important tool for forecasting future GDP and economic performance. A higher than expected number should be taken as positive to the JPY, while a lower than expected number as negative.

23:50 JPY Retail Sales (YoY)

Forecast: Previous: -0.1%

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. A higher than expected reading should be taken as positive/bullish for the JPY, while a lower than expected reading should be taken as negative/bearish for the JPY.

Disclaimer: The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

Daily Market Review 26/06/2013

Gold has slumped to a near three-year low today as healthy U.S. data supported the Federal Reserve’s plan to cut back its stimulus, while reassurance that Europe was not about to follow suit bolstered the region’s stocks and government bonds.

Gold, typically seen as a hedge against the kind of inflation central bank money printing can lead to, has fallen 2.3 percent and silver dropped 4 percent to leave both at their lowest levels since September 2010.

The falls come after data on Tuesday showed U.S. consumer confidence jumped in June to its highest level in more than five years, supporting the view that the Fed will press ahead with its plans to reduce its support program.

After a choppy start, top European shares are up 0.2 percent and euro zone government bond prices were also mostly higher, as soothing words from Europe’s top central bankers, helped sentiment.

“If the data remains strong then maybe it’s (Fed stimulus pullback) going to happen but I don’t think we are in any way close to stimulus withdrawal in places like Europe or the UK at the moment,” said one bond market trader.

In the currency market, the dollar turned lower against the yen after its recent strong run while the euro was little changed at $1.3073 following this week’s dip against the greenback.

In Asia, most of the region’s shares had turned around a four-day losing streak as assurances from China’s central bank that it will offer funds to banks if needed also helped steady recent nerves.

World stocks and bonds are having a second day of big gains on Wednesday, lifted by healthy U.S. data, moves by China to calm banking sector fears and supportive signals from Europe’s central banks.

All combined to soothe nerves about plans for a reduction in U.S. stimulus that have prompted large sell offs over the past few weeks.

Gold and silver, however, both slumped to near three-year lows as investors continued to dump assets used as a safety net in case central bank money printing went wrong or fuelled a spike in inflation.

Markets from safe-haven U.S. Treasuries to riskier stocks and emerging market assets have dropped on worries about the impact of an end to the U.S. Federal Reserve’s support program, and as signs emerged of a credit crunch in China.

After both the U.S. and Asia’s main share and bond markets had risen overnight, Europe’s investors shook off a shaky start to send the FTSEurofirst 300 index of top shares up more than 1 percent for a second day running.

Bond markets also continued to claw back ground although investors remained wary that the rebound could give way as markets take time to get used to the new environment.

“At this point in time, having seen a incredibly violent selloff in the treasury markets that took everything with it, there is a certain amount of settling back going on,” said Kit Juckes, a market strategist at Societe Generale in London.

Disclaimer: The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

Economic Events 26/06/2013

06:00 EUR GfK German Consumer Climate

Forecast: 6.5 Previous: 6.5

The Gfk German Consumer Climate Index measures the level of consumer confidence in economic activity. The data is compiled from a survey of about 2,000 consumers which asks respondents to rate the relative level of past and future economic conditions. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

06:45 EUR French GDP (QoQ)

Forecast: Previous: -0.2%

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 EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

08:00 NOK Norwegian Unemployment Rate

Forecast: 3.70% Previous: 3.70%

LFS -Labor Force Survey. Three-months moving average. Employed persons are persons aged 16-74 who performed work for pay or profit for at least one hour in the survey week, or who were temporarily absent from work because of illness, holidays etc. Conscripts are classified as employed persons. Persons engaged by government measures to promote employment are also included if they receive wages. Unemployed persons are persons who were not employed in the survey week, but who had been seeking work during the preceding four weeks, and were available for work within the next two weeks. Persons in the labor force are either employed or unemployed. The remaining group of persons is labeled not in the labor force. Unemployed persons and persons not in the labor force constitute the group non-employed persons. A higher than expected reading should be taken as negative/bearish for the NOK, while a lower than expected reading should be taken as positive/bullish for the NOK.

10:00 GBP CBI Distributive Trades Survey

Forecast: Previous: -11

The Confederation of British Industry (CBI) Distributive Trades Survey (DTS) measures the health of the retail sector. The reading is compiled from a survey covering 20,000 firms responsible for 40% of employment in retailing. It includes measures of sales activity across the distributive trades. It is a leading indicator of consumer spending. The figure is the difference between the percentage of retailers reporting an increase in sales and those reporting a decrease. 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.

12:30 US GDP (QoQ)

Forecast: 2.4% Previous: 2.4%

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 USD, while a lower than expected reading should be taken as negative/bearish for the USD.

12:30 US GDP Price Index (QoQ)

Forecast: 1.1% Previous: 1.2%

The GDP Price Index measures the annualized change in the price of all goods and services included in gross domestic product. It is the broadest inflationary indicator. 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.

13:00 MXN Mexican Trade Balance

Forecast: Previous: –1.225B

The Trade Balance measures the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported. A higher than expected reading should be taken as positive/bullish for the MXN, while a lower than expected reading should be taken as negative/bearish for the MXN.

22:45 NZD Trade Balance

Forecast: Previous: 157M

The Trade Balance measures the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported. A higher than expected reading should be taken as positive/bullish for the NZD, while a lower than expected reading should be taken as negative/bearish for the NZD.

Disclaimer: The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

Daily Market Review 25/06/2013

Equities, bonds and commodities around the world have recovered some of their recent losses as of today, and a rally by the dollar has cooled off as comments by U.S. and Chinese central bankers have eased concerns about liquidity conditions.

Markets from safe-haven U.S. Treasuries to riskier stocks, credit instruments and emerging market assets had tumbled for nearly a week after the Federal Reserve signaled an end to its stimulus and as signs of a credit squeeze emerged in China.

Asian markets also capped a day of wild swings, during which Chinese stocks plunged to their lowest since the global financial crisis, with a late rally on hopes authorities would step in to prevent a crisis. Asian shares moved into positive territory after China’s central bank committed to guiding interest rates to reasonable levels, and said it expected the factors behind a recent spike in interbank rates to gradually fade.

“China’s new leaders are determined to address the financial risks that have built in the financial system because of excessive lending,” said Koen De Leus, senior economist at KBC.

By mid-morning in Europe, soothing words from the two monetary authorities had lifted the broad FTSEurofirst 300 index by over 1.25 percent, recovering some of the 5.5 percent lost in the previous three trading days.

MSCI’s index of Asia-Pacific shares outside Japan have edged up 0.1 percent, having been as much as much as 1.2 percent lower during the day. Global shares tracked by MSCI’s world equity index are also up 0.4 percent, just 2.3 percent higher than where they started the year.

The dollar, which has rallied sharply since Chairman Ben Bernanke said last Wednesday the Fed could begin tapering its bond-buying program later this year, lost momentum as fears eased of an imminent end to its stimulus.

The dollar is now down 0.3 percent at 97.40 yen, off Monday’s two-week high of 98.72 yen. Against a basket of major currencies, the greenback was down 0.1 percent at 82.357, retreating from a near three-week peak hit the previous day.

But expectations the Fed will move away from its ultra-loose monetary policy as the economy strengthens should keep the U.S. currency strong.

“The dollar will not only be supported by the Fed tapering debate, but if we see equity markets supported by Fed reassurance, that will be dollar-positive,” said Ian Stannard, head of European FX strategy at Morgan Stanley.

U.S. government bond prices have steadied, with the benchmark 10-year yield falling back from a near-two-year high in cautious trade ahead of economic data later in the day.

German and other euro zone bonds followed a similar path, with uncertainty before several ECB policymakers were due to speak encouraging demand.

In commodity markets, oil and copper prices retreated from their recent lows, though the gloomy demand outlook stemming from signs of a slowdown in China kept gains in check.

“People are more comfortable that the U.S. has hit a sustainable recovery, but China is looking worse,” said Tony Nunan, oil risk manager with Mitsubishi Corp.

Brent Crude oil is up 79 cents a barrel at $101.95, moving away from a three-week low of $99.67 hit on Monday, while copper gained 1.3 percent to $6755.50 a metric ton as it recovered from a three-year low.

Disclaimer: The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

Economic Events 25/06/2013

08:00 EUR Italian Retail Sales (YoY)

Forecast: Previous: -3.0%

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. A higher than expected reading should be taken as positive/bullish for the EUR while a lower than expected reading should be taken as negative/bearish for the EUR.

10:00 GBP CBI Distributive Trades Survey

Forecast: 1 Previous: -11

The Confederation of British Industry (CBI) Distributive Trades Survey (DTS) measures the health of the retail sector. The reading is compiled from a survey covering 20,000 firms responsible for 40% of employment in retailing. It includes measures of sales activity across the distributive trades. It is a leading indicator of consumer spending. The figure is the difference between the percentage of retailers reporting an increase in sales and those reporting a decrease. 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.

12:30 US Core Durable Goods Orders (MoM)

Forecast: -0.1% Previous: 1.5%

Core Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, excluding transportation items. Because aircraft orders are very volatile, the core number gives a better gauge of ordering trends. A higher reading indicates increased manufacturing activity. 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.

12:30 US Durable Goods Orders (MoM)

Forecast: 3.0% Previous: 3.5%

Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, including transportation items. 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.

13:00 US House Price Index (YoY)

Forecast: Previous: 7.2%

The HPI is published by OFHEO using data provided by Fannie Mae and Freddie Mac. House price index is a statistic designed to reflect the average change of house prices across the country or a certain area. A higher than expected number should be taken as positive to the USD, while a lower than expected number as negative.

13:00 US S&P/CS HPI Composite -20 (MoM)

Forecast: 1.1% Previous: 1.4%

The Case-Shiller index prices are measured monthly and tracks repeat sales of houses using a modified version of the weighted-repeat sales methodology proposed by Karl Case and Robert Shiller and Allan Weiss. This means that, to a large extent, it is able to adjust for the quality of the homes sold, unlike simple averages. As a monthly tracking index, Case-Shiller Index has long lag time. Typically, it takes about 2 months for S&P to publish the results, as opposed to 1 month for most other monthly indices and indicators. A higher than expected number should be taken as positive to the USD, while a lower than expected number as negative.

14:00 US CB Consumer Confidence

Forecast: 75.2 Previous: 76.2

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism. 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.

14:00 US New Home Sales

Forecast: 463K Previous: 454K

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated. 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.

14:00 US New Home Sales (MoM)

Forecast: Previous: 2.3%

New Home Sales measures the change in percenatge of the new home sales, A new home sale is considered to be any deposit or contract signing either in the year the house was built or the year after it was built. A strong number would indicate a strong housing activity, and therefore a strong economy. A higher than expected number should be taken as positive to the USD, while a lower than expected number as negative.

Disclaimer: The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

Daily Market Review 24/06/2013

 The Vodafone group has agreed to buy Germany’s largest cable operator Kabel Deutschland for 7.7 billion euros. The world’s second-largest mobile operator, following up its acquisition of Cable & Wireless Worldwide, considered buying it before it went public in March 2010 at 22 euros per share, but eventually declined. One trader who asked not to be named said the offer, Vodafone’s biggest since a 2007 Indian acquisition, valued Kabel Deutschland at 12 times enterprise value against 2013 core earnings, a 35 percent premium to the sector. “We believe this is a decent deal for Vodafone,” the trader said. Shares in the group had been trading at 63 euros before Vodafone’s initial interest was reported in February.

In other news, plans by the U.S. central bank to scale back its money printing combined with fears that China’s policy may be tightening to lift the dollar on Monday, while bonds, shares and commodities extended last week’s losses. The Federal Reserve’s signal that the era of cheap central bank money – which saw many assets hit record highs – was coming to an end has raised fears of prolonged market shakeout. This rise in rates and the brighter outlook for the U.S. economy, which was behind the Fed’s decision, has favored the dollar against most major currencies. The dollar index is up 0.4 percent at 82.66 on Monday, building on last week’s 2.2 percent rally, its biggest weekly gain in 19 months.

Against the yen, the dollar is up 0.6 percent to 98.40 yen while euro has fallen 0.2 percent to $1.3095 after dropping as low as $1.3078, a level not seen since June 6. As investors retreat into the dollar, share markets everywhere have tumbled.

MSCI’s main world equity index, which tracks stocks in 45 countries, is down 0.8 percent after recording its worst weekly loss since May 2012 of 3.2 percent on Friday.

Asian markets earlier felt the full brunt of both the worries about the Fed’s move and growing fears over China’s outlook, given high money market rates, with MSCI’s broadest index of Asia-Pacific shares outside Japan dripping 1.8 percent to its lowest since early September.

A warning from the People’s Bank of China that local banks needed to do a better job of managing their cash and lending has seen Chinese shares suffer their biggest daily loss in nearly four years.

The concerns about falling demand from China has spread to mining stocks in Europe, adding to the worries about the impact of Fed tapering, and pushing the FTSEurofirst 300 index of top companies down 0.8 percent to 1,124.10 points.

Amid the selloff, the Euro STOXX 50 Volatility index, known as the VSTOXX, has hit a four-month high signaling a sharp rise in risk aversion among investors.

European equity markets remain weak despite data showing German business morale picking up for a second straight month in June, pointing to a slow recovery for Europe’s largest economy.

The data from the Munich-based Ifo think tank, based on a monthly survey of some 7,000 firms, was in line with the consensus forecast in a Reuters poll of 40 economists, and marked the second straight monthly improvement.

Commodity markets are also now weaker. Copper has dropped to its weakest level in 21 months, while oil has slipped below $100 a barrel.

“Global money supply will be wound back and the level of investment in commodities like oil will be pulled back,” said Michael McCarthy, chief market strategist at CMC Markets.

Gold has fallen over 1 percent, extending last week’s 7 percent decline as investors shun gold’s usual appeal as a safe-haven asset.

Disclaimer: The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

Economic Events 24/06/2013

 08:00 EUR German Business Expectations

Forecast: 102.0 Previous: 101.6

German Business Expectations rates the expectations of businesses in Germany for the following six months. It is is a sub-index of the German Ifo Business Climate Index. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

08:00 EUR German Current Assessment

Forecast: 109.6 Previous: 110.0

The German Current Assessment rates current business conditions in Germany, without considering future expectations. It is a sub-index of the German Ifo Business Climate Index. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

08:00 EUR German Ifo Business Climate Index

Forecast: 105.9 Previous: 105.7

The German Ifo Business Climate Index rates the current German business climate and measures expectations for the next six months. It is a composite index based on a survey of manufacturers, builders, wholesalers and retailers. The index is compiled by the Ifo Institute for Economic Research. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

09:00 EUR Italian Trade Balance Non-EU

Forecast: Previous: 1.46B

The Trade Balance measures the difference in value between imported and exported goods and services, from and to Non-Eu countries, over the reported period. A positive number indicates that more goods and services were exported than imported. A higher than expected reading should be taken as positive/bullish for the EUR , while a lower than expected reading should be taken as negative/bearish for the EUR.

11:30 TRY Turkish Capacity Utilization

Forecast: Previous: 74.8%

Capacity utilization is a concept in economics and managerial accounting which refers to the extent to which an enterprise or a nation actually uses its installed productive capacity. Thus, it refers to the relationship between actual output that ‘is’ actually produced with the installed equipment, and the potential output which ‘could’ be produced with it, if capacity was fully used. A rull of thumb is, when capacity utilization is stable above 80%, in most cases rates will start going up. A higher than expected number should be taken as positive to the TRY, while a lower than expected number as negative.

13:00 MXN Mexican Unemployment Rate

Forecast: Previous: 5.0%

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment. A higher than expected reading should be taken as negative/bearish for the MXN, while a lower than expected reading should be taken as positive/bullish for the MXN.

14:30 ILS Israeli Interest Rate Decision

Forecast: Previous: 1.25%

The Bank of Israel’s “headline” rate of interest is the rate of interest announced by the Governor at the end of every liquidity month. These announcements have been made since the end of 1993, and provide the commercial banks with a benchmark for their rates on local currency unindexed deposits and credit. A higher than expected reading should be taken as positive/bullish for the ILS , while a lower than expected reading should be taken as negative/bearish for the ILS

Disclaimer: The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.