FX Preview July 20 - July 25

Jul 19, 2008

Add a Comment

This is a light weak for market data, with the most interesting reports coming out of:
Australia (PPI on Sunday, CPI Tuesday)
Canada (Retail Sales Tuesday and PPI Wednesday)
UK (BOE minutes Wednesday, Retail Sales Thursday, and Q2 GDP Friday)

Be careful getting long AUDUSD as the breakdown in oil and gold could spell trouble for the commodity based Aussie. I would stay long AUDNZD as that play is based on the comparative directions of the 2 economies.

Earnings from several regional banks and a possible diplomatic deal with Iran could be the biggest market movers for the USD.


I will be taking the next week off. Have fun trading!


Sunday July 20
9:30pm Australian PPI (expect 1.6% QoQ, 5.3% YoY)


Monday July 21
3:15am Swiss Producer and Import Prices (expect 0.5% MoM, 4.4% YoY)
time not listed Bank Of America Earnings (expect 0.53 a share)


Tuesday July 22
2:15am Swiss June Trade Balance (expect 1.6 billion)
4am Italy Trade Balance
8:10m US treasurer Hank Paulson Speaks
8:30am Canadian Retail Sales (expect 0.5% MoM)
9:30pm Australian CPI (expect 1.3% QoQ, 4.3% YoY)
time not listed Bank of Florida earnings (expect -0.01 per share)
after market close Etrade earnings (expect -0.14 per share)
after market close Washington Mutual earnings (expect -1.05 a share)


Wednesday July 23
4am Italy Retail Sales (expect 0% MoM, -0.4% YoY)
4:30am Bank of England minutes from last policy meeting
7am Canadian PPI (expect 0.5% MoM, 2.9% YoY)
7am Canadian PPI Core (expect 0.1% MoM, 1.6% YoY)
10:30am US Crude Inventories
5pm Reserve Bank of New Zealand Rate Decision (expect hold at 8.25%)


Thursday July 24
4am German IFO Survey (look for weakness mirroring the ZEW Survey last week)
4am Eurozone Current Account
4:30am UK Retail Sales (expect -2.2% MoM, 4.4% YoY)
10am US Existing Home Sales (expect 4.97 million)
7:30pm Japan CPI July


Friday July 25
4:30am UK Q2 GDP (expect 0.2% QoQ, 1.6% YoY)
8:30am US Durable Orders (expect 0%)
10am US New Home Sales (expect 507k)
10am US Michigan July Consumer Sentiment Finalized (expect 56.3)
time not supplied T Rowe Price earnings (expect 0.60 per share)
BOE, CAD, AUD, upcoming reports, RBNZ, Ifo, Pound

Eurozone Slowing Down

Jul 9, 2008

Add a Comment

Yesterday, German and Belgium finance ministers stressed the need for a balance between inflation and growth. In essences, they were suggesting that a slow down in the Eurozone would naturally reduce inflationary pressures.

Today, those comments were followed up with signs of a European wide slow down.

First, trade balances worsened in Germany and France.

Then, the Eurozone Q1 GDP was finalized at 0.7%, vs expectations for 0.8%. Still a healthy annualized growth rate of 2.2%,

But then the real kicker came in to play. The German IFO and suggested that annualized GDP at 1.6%. And this figure was based on the assumption oil prices stabilize at US $135 and the Euro remains around 1.57

In particular, they noted "the acceleration (in Q1 GDP) clearly overstated the underlying trend. Real GDP growth is forecast to slowdown considerably in the coming quarters, expanding at rates of 0.0% in Q2 and 0.3% in both Q3 and Q4"

The Ifo went on to report "The expansion of investment is likely to moderate considerably in the coming quarters as the demand outlook becomes dimmer, pressures on productive capacity are easing and external financing conditions are deteriorating."

And, most ominously, they warned of housing problems in other European countries. Noting, "the construction component of investment is depressed by the real-estate downturn observed in an increasing number of Euro-zone countries."

Outside of the Eurozone proper, the UK has gone into contraction in service, manufacturing, and construction.

And now Ireland, the Irish tiger, is also warning on a recession. Irish unemployment has climbed to 5.7%, property prices have dropped 10%, and the economy shrank by 1.5% in Q1.

Eventually, slow downs in the UK and Ireland will spillover to the Eurozone.


Forex markets could be facing a rather interesting situation later this year, as the Fed may be raising rates at a time when central banks across Europe are cutting.
Euro, GDP, housing, Ifo