USD/CHF Fundamental Analysis March 1, 2012, Forecast

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Economic Events: (GMT)

06:45     CHF        GDP (QoQ)                                                   -0.1%                     0.2%       

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health. 

 07:00    GBP      Nationwide HPI (MoM)                                 0.3%                     -0.2%

The Nationwide Housing Price Index (HPI) measures the change in the selling price of homes with mortgages backed by Nationwide. It is the U.K.’s second earliest report on housing inflation.

A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.

08:30     CHF       SVME PMI                                                       48.5                        47.3

The Schweizerischer Verband für Materialwirtschaft und Einkauf (SVME) Purchasing Manager’s Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; a reading below 50 indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

A higher than expected reading should be taken as positive/bullish for the CHF, while a lower than expected reading should be taken as negative/bearish for the CHF.                           

08:50     EUR       French Manufacturing PMI                          50.2                       50.2                       

08:55     EUR        German Manufacturing PMI                        50.1                       50.1                       

 09:00    EUR        Manufacturing PMI                                        49.0                        49.0                       

 09:30    GBP      Manufacturing PMI                                         52.0                        52.1       

The Manufacturing Purchasing Manager’s Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; a reading below 50 indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

A higher than expected reading should be taken as positive/bullish for the EUR or GBP, while a lower than expected reading should be taken as negative/bearish for the EUR or GBP.                           

10:00     EUR       CPI (YoY)           

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation. 

A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

10:00     EUR       Unemployment Rate                                     10.4%                    10.4%     

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month. The data tends to have a muted impact as there are several earlier indicators related to labor conditions in the euro zone.

A higher than expected reading should be taken as negative/bearish for the EUR, while a lower than expected reading should be taken as positive/bullish for the EUR 

13:30     USD      Core PCE Price Index (MoM)                         0.2%                      0.2%

The Core Personal Consumption spending (PCE) Price Index measures the changes in the price of goods and services purchased by consumers for the purpose of consumption, excluding food and energy. Prices are weighted according to total expenditure per item. It measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.                         

 13:30    USD      Personal Spending (MoM)                             0.4%                      0.0%     

Personal Spending measures the change in the inflation-adjusted value of all spending by consumers. Consumer spending accounts for a majority of overall economic activity. However, this report tends to have a mild impact, as government data on retail sales is released about two weeks earlier.         

 13:30    USD       Initial Jobless Claims                                   353K                      351K                     

 13:30    USD      Continuing Jobless Claims                          3400K                    3392K   

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance.       

15:00     USD      ISM Manufacturing Index                              54.6                        54.1

The Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) rates the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

The data is compiled from a survey of approximately 400 purchasing managers in the manufacturing industry.

On the index, a level above 50.0 indicates industry expansion, below indicates contraction.                       

15:00     USD       Fed Chairman Bernanke Testifies

Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to testify on the economic outlook and recent monetary policy actions before the Joint Economic Committee, in Washington DC. The testimony is in two parts; the first is a prepared statement, then the committee conducts a question and answer session. The Q&A portion of the testimony can see heavy market volatility for the duration.

 23:30    JPY        Unemployment Rate                                     4.5%                      4.6%

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month. The data tends to have a muted impact relative to employment data from other countries because the Japanese economy is more reliant on the industrial sector than personal spending.

 23:30    JPY        Tokyo Core CPI (YoY)                                    -0.4%                     -0.4%    

The Tokyo Core Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers in Tokyo, excluding fresh food.

Analysis and Recommendations:

The USD/CHF trading at 0.9036 off the opening of 0.8956 the USD picked up momentum throughout the day on economic data and on comments by Fed Chief. The Swiss KOF leading growth indicator -0.12 in February was In line with median forecast. January’s data revised upward to -0.15 from previous -17.French January consumer spending -0.4% m/m Weaker than Reuter’s median forecast of +0.2%.

The European Central Bank on Wednesday confirmed a larger-than-expected 529.5 billion euro ($713.4 billion) in loans to banks at its second three-year long-term refinancing operation. 

German import price inflation accelerated in January to a one-year high, boosted by all major components, the Federal Statistical Office reported on Wednesday. Also, Unemployment in Germany in February held firm at 2.866 million following January’s 26,000-person fall, while the number of job vacancies fell back, the Federal Labor Office reported on Wednesday. As a result, the jobless rate was unchanged at 6.8%.

Whereas the US dollar turned up against major currencies after comments from Federal Reserve Chairman Ben Bernanke fueled strength in the dollar, and as upbeat U.S. economic data dulled safe-haven demand for the metal. In testimony prepared for the House Financial Services Committee, Bernanke said that recent improvement in employment has put the Fed on alert and that it’s watching incoming data closely. Bernanke stopped short of saying the improvement in the jobless rate meant a better economy ahead.

The Commerce Department said Wednesday that the economy expanded at a 3 percent annual rate in the October-December quarter — the fastest pace since the spring of 2010. It exceeded the previous estimate of 2.8 percent.

 

February 29, 2012 end of the month Economic Releases actual v. forecast

 

NZD

 

 

 

Business Confidence 

28.00

     

16.90

 

 

 

AUD

 

 

 

HIA New Home Sales (MoM) 

-7.3%

     

-4.9%

 

 

 

GBP

 

 

 

GfK Consumer Confidence 

-29

 

-27

 

-29

 

 

 

AUD

 

 

 

Construction Work Done (QoQ) 

-4.6%

 

-0.6%

 

11.7%

   

 

AUD

 

 

 

Retail Sales (MoM) 

0.3%

 

0.3%

 

-0.1%

 

 

 

AUD

 

 

 

Private Sector Credit (MoM) 

0.2%

 

0.3%

 

0.3%

 

 

 

JPY

 

 

 

Housing Starts (YoY) 

-1.1%

 

-3.3%

 

-7.3%

 

 

 

EUR

 

 

 

German Import Price Index (MoM) 

1.3%

 

0.6%

 

0.3%

 

 

 

EUR

 

 

 

French Consumer Spending (MoM) 

-0.4%

 

0.3%

 

-0.2%

   

 

CHF

 

 

 

KOF Leading Indicators 

-0.12

 

-0.11

 

-0.15

   

 

DKK

 

 

 

Danish GDP (QoQ) 

0.2%

 

0.6%

 

-0.5%

 

 

 

SEK

 

 

 

Swedish GDP (QoQ) 

-1.1%

 

-0.7%

 

1.6%

 

 

 

EUR

 

 

 

German Unemployment Rate 

6.8%

 

6.7%

 

6.8%

   

 

EUR

 

 

 

German Unemployment Change 

0K

 

-5K

 

-26K

   

 

GBP

 

 

 

M4 Money Supply (MoM) 

1.6%

 

-0.8%

 

-1.4%

 

 

 

GBP

 

 

 

Mortgage Approvals 

59K

 

54K

 

55K

   

 

GBP

 

 

 

Net Lending to Individuals 

1.8B

 

0.8B

 

0.9B

   

 

EUR

 

 

 

CPI (YoY) 

2.6%

 

2.7%

 

2.7%

 

 

 

EUR

 

 

 

Core CPI (YoY) 

1.5%

 

1.8%

 

1.6%

 

 

 

EUR

 

 

 

German 10-Year Bund Auction 

1.830%

     

1.820%

 

 

 

USD

 

 

 

MBA Mortgage Applications  

-0.3%

     

-4.5%

 

 

 

USD

 

 

 

GDP Price Index (QoQ) 

0.9%

 

0.4%

 

0.4%

 

 

 

USD

 

 

 

GDP (QoQ) 

3.0%

 

2.8%

 

2.8%

 

 

 

Sovereign Bond Auction Schedule

Mar 01  09:30  Spain  Bono auction

Mar 01  09:50  France  OAT auction

Mar 01  10.30  UK  Auctions 4.0% 2022 conventional Gilt

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About: FX Empire Analyst - Barry Norman

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