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GBP/USD Weekly Fundamental Analysis November 19 – 23, 2012, Forecast
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Weekly Analysis and Recommendation: The GBP/USD traded all week in a tight range between 1.5829 and 1.5916. The UK had a difficult week. Retail Sales
Weekly Analysis and Recommendation:
The GBP/USD traded all week in a tight range between 1.5829 and 1.5916. The UK had a difficult week. Retail Sales plunged, Inflation grew and the BoE Governor was very negative.
The Inflation Report was not a game-changer. The Governor tried to hammer home that the door is not closed to further QE. It is a tool that has worked and that they still have faith in, but have just chosen to pause. The Funding for Lending Scheme (FLS) is very much in its infancy and so we should not expect miracles to be achieved overnight.
There is considerable policy accommodation in the system and it is still working through. The base case is that a fairly severe recession is underway, so that should not necessarily provoke renewed action from the BoE.
|
Date |
Last |
Open |
High |
Low |
Change % |
|
Nov 16, 2012 |
1.5883 |
1.5865 |
1.5901 |
1.5836 |
0.12% |
|
Nov 15, 2012 |
1.5864 |
1.5840 |
1.5879 |
1.5829 |
0.15% |
|
Nov 14, 2012 |
1.5840 |
1.5875 |
1.5901 |
1.5839 |
-0.22% |
|
Nov 13, 2012 |
1.5875 |
1.5875 |
1.5916 |
1.5858 |
0.01% |
|
Nov 12, 2012 |
1.5874 |
1.5893 |
1.5915 |
1.5864 |
-0.12% |
However, if financial market tensions flare up in a big way, then the Bank might be forced to react. We don’t believe that a Bank Rate cut makes any sense. We wouldn’t rule out more QE (even though it isn’t our base case forecast). Rather, we continue to believe that the FLS should be tweaked to help existing borrowers rather than new borrowers. However, with the FLS in its infancy, any change is at least 6 months away.
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 November 12 –16, 2012 actual v. forecast for Euro, GPB, the Franc, and USD
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Nov. 13 |
GBP |
RICS House Price Balance |
-7% |
-15% |
-14% |
|
|
EUR |
French Non-Farm Payrolls (QoQ) |
-0.3% |
-0.2% |
-0.1% |
|
|
GBP |
Core CPI (YoY) |
2.6% |
2.2% |
2.1% |
|
|
GBP |
CPI (YoY) |
2.7% |
2.3% |
2.2% |
|
|
GBP |
PPI Input (MoM) |
0.4% |
-0.1% |
-0.1% |
|
|
GBP |
CPI (MoM) |
0.5% |
0.2% |
0.4% |
|
|
GBP |
PPI Input (YoY) |
0.1% |
-0.5% |
-1.0% |
|
|
EUR |
German ZEW Economic Sentiment |
-15.7 |
-9.8 |
-11.5 |
|
|
EUR |
ZEW Economic Sentiment |
-2.6 |
0.2 |
-1.4 |
|
|
USD |
Federal Budget Balance |
-120.0B |
-114.0B |
75.0B |
|
Nov. 14 |
EUR |
French CPI (MoM) |
0.1% |
0.2% |
-0.3% |
|
|
GBP |
Average Earnings Index +Bonus |
1.8% |
1.9% |
1.7% |
|
|
GBP |
Claimant Count Change |
10.1K |
-5.1K |
0.8K |
|
|
EUR |
Industrial Production (MoM) |
-2.5% |
-1.9% |
0.9% |
|
|
USD |
Core PPI (MoM) |
-0.2% |
0.1% |
0.0% |
|
|
USD |
Core Retail Sales (MoM) |
0.0% |
0.2% |
1.2% |
|
|
USD |
PPI (MoM) |
-0.2% |
0.2% |
1.1% |
|
|
USD |
Retail Sales (MoM) |
-0.3% |
-0.2% |
1.3% |
|
|
USD |
PPI (YoY) |
2.3% |
2.6% |
2.1% |
|
|
USD |
Core PPI (YoY) |
2.1% |
2.5% |
2.3% |
|
Nov. 15 |
EUR |
French GDP (QoQ) |
0.2% |
0.0% |
-0.1% |
|
|
EUR |
German GDP (QoQ) |
0.2% |
0.2% |
0.3% |
|
|
EUR |
German GDP (YoY) |
0.4% |
0.8% |
0.5% |
|
|
GBP |
Retail Sales (MoM) |
-0.8% |
-0.1% |
0.5% |
|
|
GBP |
Retail Sales (YoY) |
0.6% |
1.7% |
2.4% |
|
|
EUR |
CPI (YoY) |
2.5% |
2.5% |
2.5% |
|
|
EUR |
GDP (QoQ) |
-0.1% |
-0.2% |
-0.2% |
|
|
EUR |
Core CPI (YoY) |
1.5% |
1.5% |
1.5% |
|
|
USD |
Core CPI (MoM) |
0.2% |
0.1% |
0.1% |
|
|
USD |
CPI (MoM) |
0.1% |
0.1% |
0.6% |
|
|
USD |
Initial Jobless Claims |
439K |
375K |
361K |
|
|
USD |
NY Empire State Manufacturing Index |
-5.2 |
-6.7 |
-6.2 |
|
|
USD |
Continuing Jobless Claims |
3334K |
3210K |
3163K |
|
|
USD |
CPI (YoY) |
2.2% |
2.1% |
2.0% |
|
|
USD |
Core CPI (YoY) |
2.0% |
2.0% |
2.0% |
|
|
USD |
Philadelphia Fed Manufacturing Index |
-10.7 |
2.0 |
5.7 |
|
Nov. 16 |
USD |
TIC Net Long-Term Transactions |
3.3B |
75.0B |
90.3B |
|
|
USD |
Industrial Production (MoM) |
-0.4% |
0.2% |
0.2% |
Historical: From 2010 to Present
Highest: 1.6747 USD on April 28, 2011.
Average: 1.5751 USD over this period
Lowest: 1.4229 USD on May 20, 2010.
Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD
|
Date |
Time |
Currency |
Event |
Forecast |
Previous |
|
Nov. 19 |
15:00 |
USD |
4.75M |
4.75M |
|
|
Nov. 20 |
13:30 |
USD |
0.865M |
0.890M |
|
|
13:30 |
USD |
0.840M |
0.872M |
||
|
Nov. 21 |
13:30 |
USD |
400K |
439K |
|
|
13:30 |
USD |
3338K |
3334K |
||
|
14:55 |
USD |
84.5 |
84.9 |
||
|
Nov. 22 |
01:45 |
CNY |
49.50 |
||
|
07:58 |
EUR |
43.7 |
|||
|
08:28 |
EUR |
46.0 |
|||
|
11:00 |
GBP |
-19 |
-23 |
||
|
Nov. 23 |
07:00 |
EUR |
0.2% |
||
|
07:00 |
EUR |
0.4% |
|||
|
09:00 |
EUR |
99.5 |
100.0 |
||
|
09:00 |
EUR |
106.3 |
107.3 |
||
|
09:00 |
EUR |
93.2 |
93.2 |
Government Bond Auction
Date Time Country
Nov 19 10:10 Norway
Nov 20 09:30 Spain
Nov 20 10:10 Greece
Nov 20 10:30 UK
Nov 21 10:30 Germany
Nov 21 15:10 Sweden
Nov 21 16:00 US
Nov 21 18:00 US
Nov 22 09:30 Spain
Nov 22 10:10 Sweden
Nov 23 16:30 Italy
About the Author
Barry Normanauthor
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