EUR/GBP Fundamental Analysis August 31, 2012, Forecast

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Analysis and Recommendations:

The EUR/GBP  is trading at 0.7916 traded flat. Markets are more or less frozen ahead of Mr. Bernanke’s Jackson Hole speech. The euro saw some data today but none for the sterling.

German unemployment hung in at a post reunification low of 6.8% as only 9,000 more people were added to the unemployed tally.  This missed expectations by 2,000 but I would hope no self respecting trader would pin risk aversion on that.  In one sense this showcases German resilience to the eurozone crisis, but it also says that even during the boom years for the global economy Germany could not muster an unemployment rate below this level.  It’s good by European standards, and the US has now become very European as a labor market comparator, but it is hardly setting records compared to elsewhere.

Nervousness over current valuations heading into the ECB and Fed announcements on September 6th and 13th respectively.  Add to this the German court ruling on the constitutionality of the ESM a day before the Fed announcement, Dutch elections on that same day, Quebec’s election on September 4th that is turning in to a ballot on sovereignty, and then on to the U.S. fiscal cliff.  Currency markets are divided with generally small moves straddling either side of unchanged across most of the major crosses against the USD.  Global bond markets are cycling funds out of Spanish, Italian, and Portuguese 10s and into bunds and gilts.  Treasuries and Canada’s are unchanged.  The commodities space is mixed but generally devoid of big moves

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 August 30, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 30

 

JPY

 

 

Retail Sales (YoY) 

-0.8%

 

-0.2% 

 

0.2% 

 

 

 

 

AUD

 

 

Building Approvals (MoM) 

-17.3%

 

-5.0% 

 

-1.0% 

   

 

 

AUD

 

 

Private New Capital Expenditure (QoQ) 

3.4%

 

2.4% 

 

7.7% 

   

 

 

DKK

 

 

Danish Unemployment Rate 

4.70%

 

4.70% 

 

4.60% 

 

 

 

 

EUR

 

 

German Unemployment Rate 

6.8%

 

6.8% 

 

6.8% 

 

 

 

 

EUR

 

 

German Unemployment Change 

9K

 

8K 

 

9K 

   

 

 

EUR

 

 

Italian 10-Year BTP Auction 

5.82%

 

 

 

5.96% 

 

 

 

 

USD

 

 

Core PCE Price Index (MoM) 

0.0%

 

0.1% 

 

0.2% 

 

 

 

 

CAD

 

 

Current Account 

-16.0B

 

-15.0B 

 

-10.2B 

   

 

 

USD

 

 

Personal Spending (MoM) 

0.4%

 

0.4% 

 

0.0% 

 

 

 

 

USD

 

 

Initial Jobless Claims 

374K

 

370K 

 

374K 

   

 

 

USD

 

 

Continuing Jobless Claims 

3316K

 

3307K 

 

3321K 

   

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event

Forecast

Previous

Aug.31 

07:00

GBP

Nationwide HPI (MoM) 

0.1% 

-0.7% 

 

10:00

EUR

CPI (YoY) 

2.5% 

2.4% 

 

14:45

USD

Chicago PMI 

53.5 

53.7 

 

14:55

USD

Michigan Consumer Sentiment 

73.6 

73.6 

Government Bond Auctions

Aug 31  14:30  UK  Publication of the Q4 Gilt operations calendar

Sep 03  09:10  Norway  Bond auction

Sep 03  10:00  Belgium  OLO auction

Sep 04  00:30  Japan  Auctions 10Y JGBs

Sep 04  09:15  Austria  Bond auction

Sep 04  09:30  Belgium  Auctions Dec 2012 (3M) & Feb 2013 (6M) T-bills

Sep 04  14:30  UK  Details 0.75% 2034 I/L Gilt & 1.75% Sep 2022 Gilt on Sep

Sep 05  09:10  Sweden  Nominal bond auction

Sep 05  09:30  Germany  Eur 5.0bn Sep 2022 Bund auction

Sep 05  09:30  UK  4.5% 2042 Gilt auction

Sep 06  00:30  Japan  Auctions 30Y JGBs

Sep 06  08:30  Spain  Bono auction

Sep 06  08:50  France  OAT auction

Sep 06  09:10  Sweden  I/L bond auction

Sep 06  15:00  US  Announces 3Y Notes on Sep 11, 10Y Notes on Sep 12 &

Sep 07  15:30  Italy

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About: FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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