EUR/JPY Fundamental Analysis December 11, 2012, Forecast

Analysis and Recommendations:

The EUR/JPY continue to decline to trade at 106.41 as the euro remains weak after political upheavals in Italy weight on the currency. Data out of Japan this morning showed that the economy is now officially in recession with GDP falling again this month. Also most of the data dump was disappointing. The weak yen was still able to gain ground against the downward spiraling euro.

The euro has been tumbling steadily since Mr. Draghi and the ECB issued a downward revision to growth estimates through 2014, followed by the Germany and preceded by the UK. Over the weekend a surprise announcement from Italy’s Mario Monti, that he would resign, now that Silvio Berlusconi had decided to return to the political arena and his party was withdrawing support for Monti. The Italy bond market stabilized based on the reputation of Mr. Monti and is expected to lose international support with the possibility of the “Italian Clown” returned to lead the country.

Monti will try to push his coalition, which includes the People of Liberty Party, for a vote to pass budget legislation before handing in his “irrevocable resignation,” national President Giorgio Napolitano’s office said in an e-mailed statement on Dec. 8. Monti will quit immediately if his allies won’t comply, the premier’s spokeswoman said in a telephone interview.

Italian 10-year bond yields rose 10 basis points, or 0.1 percentage point, in three days to 4.53 percent on Dec. 7. The yield is still almost 2.5 percentage points below its closing level of 7 percent on Nov. 16, 2011, when Monti was named prime minister.

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

Economic Data December 9- 10, 2012 actual v. forecast

 

Upcoming Economic Events that affect the AUD, NZD, JPY and USD

Government Bond Auction

Date Time Country 

Dec 11 09:30 Spain 

Dec 11 10:10 Greece 

Dec 11 10:15 Austria 

Dec 11 10:30 Belgium 

Dec 11 10:30 UK 

Dec 11 18:00 US 

Dec 12 10:10 Italy  

Dec 12 10:10 Sweden 

Dec 12 10:30 Swiss 

Dec 12 16:30 US 

Dec 13 01:30 Japan 

Dec 13 09:30 Spain 

Dec 13 10:10 Italy  

Dec 13 10:30 UK 

Dec 13 16:00 US 

Dec 13 18:00 US 

Dec 14 11:00 Belgium 

Dec 14 15:30 UK