Heavy Fundamental Docket Causes Whipsaw Action in Dollar Pairs
Heavy Fundamental Docket Causes Whipsaw Action in Dollar Pairs
JPN Manufacturing Remains in Contraction, Wages Decline on Year
In Japan, manufacturing activity contracted again in June as the PMI measured 47.0. Both domestic and global demand for Japanese goods are faltering. Monthly wages, including overtime and bonuses, decreased 0.6% in June compared to the same time last year. It’s the first time this year that wages were negative. With Japanese households already cutting back on spending as a result of higher prices for gas, food and other goods, lower wages will only further depress consumer confidence and spending.
AUS Retail Sales Fall 1% in June, Trade Balance Turns to Surplus
In Australia, retail sales tumbled in June, falling 1%, the largest decline in 6 years. Consumers face similar price pressures as in Japan, as well as the highest borrowing costs in 17 years. The Aussie trade balance turned to a surplus of $400 million. Australian exports are being boosted by the same price increases in commodities that are fueling inflation around the world.
NZ Business Confidence Deteriorates
A survey of New Zealand business confidence showed a net 43% of respondents expecting worse times over the year ahead a further deterioration from last month.
AUD/JPY - Aussie Continues Sliding Following Negative Retail Sales
The Aussie fell further against the Yen today with increased speculation that the Reserve bank of Australia will follow in the footsteps of the New Zealand central bank and look to cut rates as growth moderates. The pair fell from an overnight high near 102.40 to trade near 101.60 by noon NY time.
SWZ Annual Consumer Inflation Hits 15-Year High of 3.1%
In Switzerland, annual consumer inflation hit a 15-year high of 3.1%, even as the monthly rate for July decreased 0.4% as a result of retailers cutting prices for clothes and shoes in summer sales.
UK GfK Consumer Confidence Falls to Record Low, Housing Prices Down 8.1% on the Year
In the UK, the GFK consumer confidence index dropped 5 points to -39, the lowest level since the survey began in 1974. The Nationwide house price index was down 1.7% for the month and 8.1% on the year. With the cost of living still on the increase and the housing market floundering, the UK economy seems to be heading for a recession.
GBP/CHF - Pound Rises vs Swiss Franc Despite Weaker Data
The Pound-Swiss Franc pair fell in the wake of the 2 UK releases, testing the area near 2.07. The Pound then recovered only to fall in the wake of the NY open. London stocks, and investor confidence bounced back yet again, pushing the pair to test its highest from yesterday around the 2.0780 level.
GER Unemployment Falls by 20K
German unemployment fell by 20K in July, putting the total number of unemployed at 3.25 million. The unemployment rate remained at 7.8%.
EUR Flash CPI Rises to 4.1%, Unemployment Now at 7.3%
In the euro-zone as a whole, the unemployment rate remained at 7.3% in June, but only because May’s figure was revised up from 7.2%. Therefore, today’s figure was higher than expected. The flash estimate of annual consumer inflation climbed to 4.1%, a new 16-year high.
US Jobless Claims Surge to 448K
In the US the number of workers filing first time claims for unemployment benefits rose by 44K to 448K in the week ending July 26th. That’s a 5-year high and blindsided forecasts, though some of the result can be attributed to a change in eligibility, inflating the number. The number of people continuing to collect benefits climbed to 3.28 million, the highest overall level since December 2003.
US GDP Increases at 1.9% Annualized Rate in 2nd Quarter
US GDP growth increased at an annual rate of 1.9% in the second quarter of 2008. In the first quarter, GDP was up 0.9%. The Chicago PMI rose above 50, showing expansion for the first time in 6 months. The report showed better orders, but weaker employment and rising inflationary pressure.
EUR/USD - Dollar Falls Following Jobs Data But Recovers
The Euro-Dollar pair reacted swiftly to the US jobs data, climbing to test 1.57. However, that initial gains were cut down and the pair was trading near its open for the session. The knee-jerk reaction to the poor jobs data was countered by a drop in oil prices. The greenback experienced was similar back and forth action against the Pound and Yen as well.
CAN GDP Growth Down 0.1% in May
Finally, in Canada, GDP growth edged down 0.1% in May after rising 0.4% in April. There was a significant decrease in the energy sector, along with declines in finance, forestry, construction and wholesale trade.
Upcoming Releases
Tonight, Australia reveals its manufacturing PMI and the TDMI inflation gauge. Overnight, Germany posts retail sales and the Euro-zone and UK reveal their manufacturing PMI’s.
Tomorrow, the Us releases its nonfarm employment change data, along with the ISM Manufacturing index, and construction spending.
Capital Market Services, L.L.C.
www.cmsfx.com
©C2004-2005 Globicus International, Inc. and Capital Market Services, L.L.C. Any information in this report is based on data obtained from sources considered to be reliable, but no representations or guarantees are made by Capital Market Services, L.L.C. with regard to the accuracy of the data. The opinions and estimates contained herein constitute our best judgment at this date and time, and are subject to change without notice. Capital Market Services, L.L.C. accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this report. No part of this report may be reproduced or distributed in any manner without the permission of Capital Market Services, L.L.C.
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