USD/CHF Weekly Fundamental Analysis April 2-6, 2012, Forecast

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Introduction: The pair tends to break to an all-time low, and then range back to the previous low. The ranges are very distinct. A break to the upside will likely meet another previous low. Pair is reliable.

  • Global stability and global recovery will send USD/CHF higher
  • USD/CHF rallies on geopolitical instability

 

Analysis and Recommendations:

The USD/CHF ended Friday’s session at 0.9023 after a slight drop as the USD fell against most of its trading partners.

On Friday EU Finance Ministers reached an agreement to up the EFSF and ESM to close to 1 trillion euros, giving the G20 nations the firewall they were demanding. This gave the euro a lot of strength and pushed the USD downwards.

Although the Franc had very little in the way of support.

In the USD over the week, several positive reports were released some under forecast, but all still positive and supportive of the overall US recovery. Jobs and GDP came in at the end of the week within acceptable ranges.

On Friday, it seems that investors ventured off looking for a bit more risk, after a week of listening to Fed Chairman Bernanke and the submission of the Spanish budget and the final conclusion to the EU firewall.

It was the end of a very bumpy month.

Historical

Highest: 1.1664 CHF on 07 Jun 2010.

Average: 0.9699 CHF over this period.

Lowest: 0.7224 CHF on 09 Aug 2011.

Economic Reports March 25-30, 2012 that affect the Eurozone actual v. forecast

 EUR

 

German Business Expectations

102.7

102.6

102.4

 

 EUR

 

German Current Assessment

117.4

117.0

117.4

 

 EUR

 

German Ifo Business Climate Index

109.8

109.7

109.7

 

 EUR

 

ECB President Draghi Speaks 

 

 

 

 

 EUR

 

GfK German Consumer Climate

5.9

6.2

6.0

 

 GBP

 

CBI Distributive Trades Survey

0

-4

-2

 

 GBP

 

BoE Gov King Speaks 

 

 

 

 

 EUR

 

French GDP (QoQ)

0.2%

0.2%

0.2%

 

 GBP

 

GDP (QoQ)

-0.3%

-0.2%

-0.2%

 

 GBP

 

Current Account

-8.5B

-8.4B

-10.5B

 

 GBP

 

Business Investment (QoQ)

-3.3%

-5.4%

-5.6%

 

 EUR

 

German CPI (MoM) 

0.3%

0.3%

0.7%

 

 GBP

 

Nationwide HPI (MoM)

-1.0%

0.2%

0.4%

 

 EUR

 

German Unemployment Change

-18K

-10K

-3K

 

 EUR

 

German Unemployment Rate

6.7%

6.8%

6.8%

 

 EUR

 

Italian 10-Year BTP Auction

5.24%

 

5.50%

 

 EUR

 

French Consumer Spending (MoM)

3.0%

0.2%

-0.4%

 

 CHF

 

KOF Leading Indicators

0.08

0.08

-0.11

 

 EUR

 

CPI (YoY) 

2.6%

2.5%

2.7

 

 

Last week’s market highlights

The Good Stuff

  • Eurozone Finance Ministers finalizes the temporary combination of the EFSF and ESM. Italy and Spain get to contribute to their own bailout fund if needed
  • German unemployment falls more than expected and rate falls to lowest since reunification
  • German IFO business confidence up slightly to the highest since July
  • Italian business confidence up slightly from lowest since Dec ’09 and consumer confidence rises to 8 month high
  • Consumer confidence rises a touch to best since Feb ’11
  • Personal Spending in Feb rises .8% m/o/m, above estimates of up .6%
  • UK said purchase apps rose 3.3% to a 10 week high.
  • Crude finally drops but not enough

 

The Disappointing

  • Inflation expectations in both the Michigan (3.9%) and Conference Board (6.3%)confidence figures rise to the highest since May,
  • Chicago, Richmond, Dallas and KC manufacturing survey’s all fall more than expected in Mar from Feb
  • Real income falls in Feb by .1%, savings rate drops to 3.7%, the lowest since Aug ’09
  • Initial Jobless Claims 4 week avg 365k after benchmark revisions vs 355k prior
  • Feb Durable Goods orders grow less than expected after Jan’s weakness
  • UK said refinances fell 4.6% to lowest since early Dec
  • Home price index falls to cheapest since Jan ’03
  • Pending Home Sales in Feb unexpectedly falls .5% but from most since Apr ’10
  • German retail sales in Feb fall for 4th month in past 5
  • Shanghai index closes down for the 3rd straight week due to continued concerns with economic growth
  • Bernanke Feds will do more, possible monetary easing
  • Gasoline prices rise another .035 on the week to $3.93.

 

Economic Highlights of the coming week that affect the Euro, the USD and the Franc. 

Apr. 02

08:15

 

CHF

 

 

 

Retail Sales (YoY) 

 

 

 

 

-14.8B 

 

 

 

08:30

 

CHF

 

 

 

SVME PMI 

 

 

 

 

 

 

 

 

08:50

 

EUR

 

 

 

French Manufacturing PMI 

 

 

 

 

 

 

 

 

08:55

 

EUR

 

 

 

German Manufacturing PMI 

 

 

 

 

 

 

 

 

09:00

 

EUR

 

 

 

Manufacturing PMI 

 

 

 

 

 

 

 

 

10:00

 

EUR

 

 

 

Unemployment Rate 

 

 

 

 

 

 

 

 

15:00

 

USD

 

 

 

ISM Manufacturing Index 

 

 

 

 

 

 

 

Apr. 03

10:00

 

EUR

 

 

 

GDP (QoQ) 

 

 

 

 

 

 

 

 

19:00

 

USD

 

 

 

FOMC Meeting Minutes 

 

 

 

 

 

 

 

Apr. 04

10:00

 

EUR

 

 

 

Retail Sales (MoM) 

 

 

 

 

 

 

 

 

11:00

 

EUR

 

 

 

German Factory Orders (MoM) 

 

 

 

 

 

 

 

 

12:45

 

EUR

 

 

 

Interest Rate Decision 

 

 

 

 

 

 

 

 

13:15

 

USD

 

 

 

ADP Nonfarm Employment Change 

 

 

 

 

 

 

 

 

13:30

 

EUR

 

 

 

ECB Press Conference 

 

 

 

 

 

 

 

 

15:00

 

USD

 

 

 

ISM Non-Manufacturing Index 

 

 

 

 

 

 

 

Apr. 05

08:15

 

CHF

 

 

 

CPI (MoM) 

 

 

 

 

 

 

 

 

13:30

 

USD

 

 

 

Initial Jobless Claims 

 

 

 

 

 

 

 

 

13:30

 

USD

 

 

 

Continuing Jobless Claims 

 

 

 

 

 

 

 

Apr. 06

13:30

 

USD

 

 

 

Average Hourly Earnings (MoM) 

 

 

 

 

 

 

 

 

13:30

 

USD

 

 

 

Nonfarm Payrolls 

 

 

 

 

 

 

 

 

13:30

 

USD

 

 

 

Unemployment Rate 

 

 

 

 

 

 

 

 

13:30

 

USD

 

 

 

Private Nonfarm Payrolls 

 

 

 

 

 

 

 

 

Summary of this week’s highlights for the European and US Markets

In the United Kingdom, the March purchasing manager index for manufacturing is on tap.

The same release is due in Europe for the European Monetary Union.

EU unemployment rate data for February will also be released.

PMI construction data for March is awaited in the UK, along with the BRC shop price index for the month.

EU producer price index data is also due.

In the UK, the March purchasing manager index for services is expected to be released.

The European Central Bank will wrap up a busy day with a meeting to decide on the current level of interest rates in the currency bloc.

Industrial production data for February is due in the UK, along with manufacturing production data for the period.

NIESR will release its quarterly gross domestic product estimate for March.

Elsewhere, the Bank of England will meet to discuss the level of interest rates for March.

This week in the USA

Monday sees the release of the ISM manufacturing index for March in the US. The index is expected to have risen 1.1 points during the month to 53.5.

February construction spending data is also due.

Tuesday brings US car sales data for March, along with factory orders figures for February.

On Wednesday, the ADP employment report for March will be published in the US, alongside the ISM non-manufacturing index for the month.

The weekly Energy Information Administration petroleum status report will also be announced

In the US on Thursday, jobless claims data is awaited.

The March employment situation report is due in the US, along with consumer credit change data for February.

Economists expect the jobs data to show a 230,000 lift in private sector jobs for the month, with total non-farm payrolls lifting by 225,000, leaving the jobless rate unchanged at 8.3 per cent.

On Friday, most western markets will be closed for the Good Friday public holiday.

Government Bond Auctions this week

Apr 03  09:30  Belgium  Auctions 3 & 6M T-bills

Apr 03  09:30  UK  Conventional Gilt Auction

Apr 04  08:30  Spain  Bono auction

Apr 04  14:30  Sweden  Details T-bill auction on Apr 11

Apr 05  08:50  France  OAT auction

Apr 05  15:00  US Announces auctions 

Apr 05  15:30  Italy   Details BOT on Apr 11 & BTP/CCTeu on Apr 12

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About:FX Empire Analyst - Barry Norman

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