EUR/USD Weekly Fundamental Analysis October 8-12, 2012 Forecast

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Weekly Analysis and Recommendation:

The EUR/USD gained from 1.2810 on Monday to close Friday at 1.3034 on positive statements from ECB Director Draghi and his ongoing pledge to support the currency. In the US on Friday, the nonfarm payroll report surprised investors, reporting 114k new jobs with expectations in the range of 110-115k, the surprise was the revisions upwards to the two prior months by a considerable amount and the drop of the unemployment rate from 8.1% to 7.8% when markets were expecting an increase to 8.2%.

Once again Spain and Greece are in the spotlight with their finances, Spain continues to deny their need for a bailout, although they simply wish to disguise in other words and terms. Greece continues to play games with the troika

Date

Last

Open

High

Low

Change %

Oct 05, 2012

1.3034

1.3013

1.3072

1.2994

0.16%

Oct 04, 2012

1.3013

1.2923

1.3032

1.2910

0.70%

Oct 03, 2012

1.2923

1.2912

1.2937

1.2877

0.09%

Oct 02, 2012

1.2912

1.2888

1.2968

1.2880

0.19%

Oct 01, 2012

1.2888

1.2810

1.2938

1.2805

0.63%

Traders are likely to be interested in any moves to mend disagreements between the Greek government and troika monitors that open the door for the disbursement of the latest batch of bailout funding. Any clues about the timing of a Spanish request for a full-on rescue package are also sought, particularly after borrowing costs rose at a bond auction last week.

The Bank of Portugal is due to release data that will show the extent to which the country’s banks are dependent on ECB funding while the central bank’s President Mario Draghi testifies before the European Parliament’s Economy Committee. Spanish Prime Minister Mariano Rajoy meets with French President Francois Hollande, with debt crisis strategy (and Spain’s bailout) again at center stage.

Meanwhile, the consensus view on the path of global economic performance will be updated as the International Monetary Fund (IMF) releases a revised set of forecasts. The University of Michigan’s gauge of US Consumer Confidence and HSBC’s China Services PMI report are in focus on the data docket. Eurozone and growth considerations converge as the G7 finance ministers gather in Tokyo. Needless to say, there will be lots of press, and rumors and headlines.

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.

Major Economic Events for the week of October 1-5 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Oct. 01 

CHF

Retail Sales (YoY) 

5.9%

4.5%

2.9%

 

CHF

SVME PMI 

43.6

47.5

46.7

 

EUR

Italian Manufacturing PMI 

45.70

44.20

43.60

 

EUR

French Manufacturing PMI 

42.7

42.6

42.6

 

EUR

German Manufacturing PMI 

47.4

47.3

47.3

 

EUR

Manufacturing PMI 

46.1

46.0

46.0

 

GBP

Manufacturing PMI 

48.4

49.3

49.5

 

USD

ISM Manufacturing Index 

51.5

49.7

49.6

 Oct. 02

GBP

Nationwide HPI (MoM) 

-0.4%

-0.3%

1.1%

 

EUR

Spanish Unemployment Change 

79.60K

 

38.20K

 Oct. 03

GBP

Services PMI 

52.2

53.1

53.7

 

EUR

Retail Sales (MoM) 

0.1%

-0.1%

0.1%

 

USD

ADP Nonfarm Employment Change 

162K

143K

189K

 

USD

ISM Non-Manufacturing Index 

55.1

53.2

53.7

Oct. 04

GBP

Halifax House Price Index (MoM) 

-0.4%

0.2%

-0.4%

 

GBP

Interest Rate Decision 

0.50%

0.50%

0.50%

 

GBP

BOE QE Total 

375B

375B

375B

 

EUR

Interest Rate Decision 

0.75%

0.75%

0.75%

 

USD

Initial Jobless Claims 

367K

370K

363K

 

USD

Continuing Jobless Claims 

3281K

3271K

3281K

Oct. 05

EUR

GDP (QoQ) 

-0.2%

-0.2%

-0.2%

 

EUR

German Factory Orders (MoM) 

-1.3%

-0.5%

0.3%

 

USD

Average Hourly Earnings (MoM) 

0.3%

0.2%

0.0%

 

USD

Nonfarm Payrolls 

114K

113K

142K

 

USD

Average Weekly Hours 

34.5

34.4

34.4

 

USD

Private Nonfarm Payrolls 

104K

130K

97K

Historical: From 2010 to Present

Highest: 1.4940 USD on May 04, 2011.

Average: 1.3434 USD over this period.

Lowest: 1.1877 USD on Jun 07, 2010.

 

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

Event

Forecast

Previous

Oct. 08 

08:15

CHF

CPI (MoM) 

0.3%

 

 

11:00

EUR

German Industrial Production (MoM) 

-0.9%

1.3%

Oct. 09

00:01

GBP

RICS House Price Balance 

-20%

-19%

 

09:30

GBP

Industrial Production (MoM) 

-0.5%

2.9%

 

09:30

GBP

Manufacturing Production (MoM) 

-0.6%

3.2%

 

09:30

GBP

Trade Balance 

-8.5B

-7.2B

 

09:30

GBP

Industrial Production (YoY) 

-1.1%

-0.8%

 Oct. 11

07:00

EUR

German CPI (YoY) 

2.0%

2.0%

 

07:45

EUR

French CPI (MoM) 

 

0.7%

Oct. 12 

10:00

EUR

Industrial Production (MoM) 

-0.5%

0.6%

Upcoming Government Bond Auctions

Date Time Country 

Oct 08 09:10 Norway 

Oct 08 15:30 Italy  

Oct 09 08:30 Holland 

Oct 09 09:30 UK 

Oct 09 14:30 UK 

Oct 09 17:00 US 

Oct 10 09:10 Italy  

Oct 10 09:10 Sweden 

Oct 10 09:30 Germany 

Oct 10 09:30 Swiss 

Oct 10 14:30 Sweden 

Oct 10 17:00 US 

Oct 11 09:10 Italy  

Oct 11 09:10 Sweden 

Oct 11 09:30 UK 

Oct 11 15:00 US 

Oct 11 17:00 US 

Oct 12 09:30 Germany 

Oct 12 10:00 Belgium 

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About: FX Empire Analyst - Barry Norman

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