GBP/USD Fundamental Analysis August 13, 2012, Forecast

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Analysis and Recommendations:

The GBP/USD has been remarkably resilient. Traders do not seem bothered by the continued flow of negative eco data. Today, PPI monthly and yearly came in well below forecast. Yesterday the trade balance showed a widening before economist projections but the GBP remains in the 1.56 range.

UK data released since the awful -0.7% GDP number came out on July 25 implies that upward revisions to GDP are fairly likely. For instance, UK monthly construction data for June released overnight showed a smaller contraction during Q2 than was implied by the initial GDP data. The revised outcome of -3.9% q/q compares to -5.2% q/q in the preliminary GDP release.

Combined with the industrial production data released earlier in the week which showed a similar outcome, it seem the Office of National Statistics aimed a bit too low on 2 out of the 3 main inputs which together accounting for just over 20% of the overall weight in GDP. Revised GDP numbers will be released August 24.

In my view, this is all hogwash, the UK is crumbling in all aspects and the only thing keeping the GBP afloat is the hopes that Governor King will cave in and lower rates and add stimulus.

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.

Chinese Economic Data August 9 -10, 2012 actual v. forecast

 

 

CNY

 

 

 

Chinese CPI (YoY) 

1.8%

 

1.7% 

 

2.2% 

 

 

 

 

CNY

 

 

 

Chinese PPI (YoY) 

-2.9%

 

-2.5% 

 

-2.1% 

 

 

 

 

CNY

 

 

 

Chinese CPI (MoM) 

0.1%

 

-0.1% 

 

-0.6% 

 

 

 

 

CNY

 

 

 

Chinese Fixed Asset Investment (YoY) 

20.4%

 

20.5% 

 

20.4% 

 

 

 

 

CNY

 

 

 

Chinese Industrial Production (YoY) 

9.2%

 

9.8% 

 

9.5% 

 

 

 

 

CNY

 

 

 

Chinese Retail Sales (YoY) 

13.1%

 

13.7% 

 

13.7% 

 

 

 

Economic Data for August 10, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 10

 

AUD

 

 

 

RBA Monetary Policy Statement 

 

 

 

 

 

 

 

 

 

CNY

 

 

 

Chinese Trade Balance 

25.10B

 

35.10B 

 

31.70B 

 

 

 

 

JPY

 

 

 

Industrial Production (MoM) 

0.4%

 

-0.1% 

 

-0.1% 

 

 

 

 

JPY

 

 

 

BoJ Monthly Report 

 

 

 

 

 

 

 

 

 

EUR

 

 

 

German CPI (MoM) 

0.4%

 

0.4% 

 

0.4% 

 

 

 

 

EUR

 

 

 

German CPI (YoY) 

1.7%

 

1.7% 

 

1.7% 

 

 

 

 

GBP

 

 

 

PPI Input (MoM) 

1.3%

 

1.5% 

 

-2.9% 

   

 

 

GBP

 

 

 

PPI Input (YoY) 

-2.4%

 

-1.5% 

 

-3.0% 

   

 

 

CAD

 

 

 

Employment Change 

-30.4K

 

9.0K 

 

7.3K 

 

 

 

 

USD

 

 

 

Import Price Index (MoM) 

-0.6%

 

0.1% 

 

-2.4% 

   

 

 

CAD

 

 

 

Unemployment Rate 

7.3%

 

7.0% 

 

7.2% 

   

 

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

Date

Time

Currency

Event 

Previous

Aug 14

1:30

AUD

NAB Business Confidence

-3

 

1:30

AUD

New Motor Vehicle Sales m/m

-0.6%

 

5:30

EUR

French Prelim GDP q/q

0.0%

 

6:00

EUR

German Prelim GDP q/q

0.5%

 

6:45

EUR

French Prelim Non-Farm Payrolls q/q

0.1%

 

7:15

CHF

PPI m/m

-0.3%

 

9:00

EUR

German ZEW Economic Sentiment

-19.6

 

9:00

EUR

Flash GDP q/q

0.0%

 

9:00

EUR

Industrial Production m/m

0.6%

 

9:00

EUR

ZEW Economic Sentiment

-22.3

 

12:30

USD

Core Retail Sales m/m

-0.4%

 

12:30

USD

PPI m/m

0.1%

 

12:30

USD

Retail Sales m/m

-0.5%

 

14:00

USD

Business Inventories m/m

0.3%

Aug 15

0:30

AUD

Westpac Consumer Sentiment

3.7%

 

1:30

AUD

Wage Price Index q/q

0.9%

 

12:30

USD

Core CPI m/m

0.2%

 

12:30

USD

Empire State Manufacturing Index

7.4

 

13:00

USD

TIC Long-Term Purchases

55.0B

 

13:15

USD

Capacity Utilization Rate

78.9%

 

13:15

USD

Industrial Production m/m

0.4%

 

14:30

USD

Crude Oil Inventories

-3.7M

Aug 16

1:00

AUD

MI Inflation Expectations

3.3%

 

9:00

CHF

ZEW Economic Expectations

-42.5

 

9:00

EUR

CPI y/y

2.4%

 

12:30

USD

Building Permits

0.76M

 

12:30

USD

Unemployment Claims

361K

 

12:30

USD

Housing Starts

0.76M

 

14:00

USD

Philly Fed Manufacturing Index

-12.9

Aug 17

6:00

EUR

German PPI m/m

-0.4%

 

8:00

EUR

Current Account

10.9B

 

13:55

USD

Prelim UoM Consumer Sentiment

72.3

Government Bond Auctions

Date  Time  Country 

Aug 13  09:10  Italy

Aug 13  09:10  Norway

Aug 13  09:30  Germany

Aug 14  09:10  Greece 

Aug 14  09:10  Italy

Aug 14  09:30  Belgium

Aug 14  14:30  UK

Aug 15  09:10  Sweden

Aug 16  09:30  UK

Aug 16  15:00  US

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About: FX Empire Analyst - Barry Norman

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