EUR/JPY Weekly Fundamental Analysis September 3-7, 2012, Forecast

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Introduction: This is one of the most popular crosses. The primary reason why EUR/JPY has rallied 11 percent over the past 3.5 months is because of US growth – not many people realize that the price action of EUR/JPY is directly correlated with how the US economy is doing.

Weekly Analysis and Recommendations: 

The EUR/JPY followed the pack this week, responding to the value of the euro and the usd which were primarily affected by market sentiment based on the hopes of monetary easing from the Feds and the ECB. The highlight of the week was Mr. Bernanke’s address, which was not released until after the closing of Asian markets and the very end of the day on Friday for Europe, so we will see continued activity on Monday. The midweek correction was accountable to an announcement by Mr. Draghi, that he could not attend Jackson Hole due to the workload at the ECB, which markets took as a positive signal. The pair ended up at 98.58 mid range between the previous Monday’s high and low.

Date

Last

Open

High

Low

Change %

Aug 31, 2012

98.58

98.25

99.03

97.99

0.35%

Aug 30, 2012

98.25

98.66

98.79

98.04

-0.42%

Aug 29, 2012

98.66

98.78

98.83

98.39

-0.12%

Aug 28, 2012

98.78

98.46

98.83

97.90

0.33%

Aug 27, 2012

98.46

98.48

98.72

98.32

-0.02%

European markets will clearly drive much if not all of the global market tone next week.  Bundesbank President Jens Weidmann could attract headlines over the weekend with remarks at the annual Jackson Hole central bank symposium sponsored by the Kansas City Fed.  He is opposed to aggressive additional bond buying by the ECB, and ECB President Mario Draghi has recently made spirited attempts to isolate Weidmann’s opinions while directly appealing to the German electorate.

With the ECB meet on the 6th, that will be the marquee event of the week.

At the end of last week, Japan released most of its monthly eco data, with many lackluster reports, (see chart below). With Industrial Production tumbling continuing to tumble, and exports hurt by the high JPY.

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 recent analysis and information in our  weekly reports and we provide daily updates and outlooks

Tier 1 and 2 Economic Releases for August 27-31, 2012

Date

Currency

Event

Actual

 

Forecast

Previous

Aug. 27

SEK

Swedish Retail Sales (MoM) 

0.30%

 

0.20% 

-0.30% 

 

EUR

German Ifo Business Climate Index 

102.3

 

102.6 

103.2 

 

EUR

German Current Assessment 

111.2

 

110.8 

111.5 

 

EUR

German Business Expectations 

94.2

 

95.0 

95.5 

Aug. 28

AUD

HIA New Home Sales (MoM) 

-5.6%

 

 

2.8% 

 

EUR

GfK German Consumer Climate 

5.9

 

5.9 

5.9 

 

USD

CB Consumer Confidence 

60.6

 

66.0 

65.4 

Aug. 29

AUD

Construction Work Done (QoQ) 

-0.2%

 

1.0% 

7.8% 

 

CHF

KOF Leading Indicators 

1.57

 

1.50 

1.41 

 

EUR

German CPI (MoM) 

0.3%

 

0.2% 

0.4% 

 

USD

GDP (QoQ) 

1.7%

 

1.7% 

1.5% 

 

USD

Pending Home Sales (MoM) 

2.4%

 

1.0% 

-1.4% 

 

USD

Beige Book 

 

 

 

 

 

NZD

Building Consents (MoM) 

2.0%

 

3.0% 

5.7% 

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% 

 

EUR

German Unemployment Change 

9K

 

8K 

9K 

 

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 

Aug. 31

KRW

South Korean Industrial Production (YoY) 

0.3%

 

0.5% 

1.4% 

 

JPY

Unemployment Rate 

4.3%

 

4.3% 

4.3% 

 

JPY

Tokyo Core CPI (YoY) 

-0.5%

 

-0.6% 

-0.6% 

 

JPY

Industrial Production (MoM) 

-1.2%

 

1.7% 

0.4% 

 

GBP

Nationwide HPI (MoM) 

1.3%

 

0.1% 

-0.8% 

 

EUR

CPI (YoY) 

2.6%

 

2.5% 

2.4% 

 

EUR

Unemployment Rate 

11.3%

 

11.3% 

11.3% 

 

CAD

GDP (MoM) 

0.2%

 

0.1% 

0.1% 

 

USD

Chicago PMI 

53.0

 

53.5 

53.7 

 

USD

Michigan Consumer Sentiment 

74.3

 

73.6 

73.6 

Historical: From 2010 to Present

Highest: 134.38 JPY on Jan 11, 2010

Average: 111.13 JPY over this period.

Lowest: 94.12 JPY on July 24, 2012

 

Economic Highlights for the upcoming week… Tiers 3 keep your eyes on these

Date

Time

Currency

Event

Forecast

 

Previous

 

 

Sep. 04

05:30

AUD

Interest Rate Decision 

3.50% 

 

3.50% 

 

 

 

15:00

USD

ISM Manufacturing Index 

50.0 

 

49.8 

 

 

Sep. 05

02:30

AUD

GDP (QoQ) 

0.8% 

 

1.3% 

 

 

 

14:00

CAD

Interest Rate Decision 

1.00% 

 

1.00% 

 

 

Sep. 06

02:30

AUD

Employment Change 

5.0K 

 

14.0K 

 

 

 

02:30

AUD

Unemployment Rate 

5.3% 

 

5.2% 

 

 

 

12:00

GBP

Interest Rate Decision 

0.50% 

 

0.50% 

 

 

 

12:45

EUR

Interest Rate Decision 

0.75% 

 

0.75% 

 

 

Sep. 07

15:00

CAD

Ivey PMI 

58.0 

 

62.8 

   

Government Bond Auction

Date  Time  Country 

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

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