ForexLive » Economy

Pending home sales rise 5.2%; Factory orders rise 0.1%

Jamie Coleman — Thu, 02 Sep 2010 14:00:38 +0000

June factory orders revised higher, to -0.6%.

Yields are rising further and equities are firming as the data is okay, not dreadful.

US 10-year notes are up to 2.63%

Claims 472,000 from 478,000

Jamie Coleman — Thu, 02 Sep 2010 12:30:57 +0000

Also of note, non-farm productivity fell 1.8%. Perhaps business will have to start hiring again before long.

ForexLive European Wrap: Not much going on. GBP has poor morning, CHF good one

Gerry Davies — Thu, 02 Sep 2010 11:24:39 +0000

Sweden’s Riksbank raises key repo rate to 0.75% from 0.5%
French Q2 ILO jobless rate falls to 9.7%, better than median forecast of 10%
Japan’s Ozawa: FX intervention just by Japan may not have much effect, but should be prepared to act
Swiss Q2 real GDP +0.9% q/q, +3.4% y/y, better than median forecasts +0.8%, +2.7% respectively
Nationwide UK August house prices -0.9% m/m, +3.9% y/y. Much weaker than median forecasts of -0.3%, +4.9% respectively
UK construction PMI 52.1 in August, down from 54.1 in July. Much weaker than median forecast of 53.2
Euro zone Q2 GDP confirmed at +1.0% q/q. Revised up to 1.9% y/y from previous 1.7%
Swiss retail sales +4.8% y/y in July, better than median forecast of +2.3%
Spanish/German 10 year government bond yield spread fall to 169 bps . Lowest since August 20

Not too much going on. Sterling has had a poor morning, underminned by poor house price, construction PMI data. Swissy on the flip side has had good morning, underpinned by good Q2 GDP, retail sales data.

EUR/USD firmer on day, up at 1.2825 from early 1.2790. The pairing did suffer a bit of a swoon posting a session low 1.2777, but ready buyers emerged. The sell-off seemed to coincide with announcement of Swedish rate hike, which saw heavy selling of the EUR/SEK cross.

Asian central bank and hedge funds notable buyers below 1.2800 this morning. On the topside sell orders noted at 1.2830/50 and they’ve helped cap rally attempts at 1.2838 so far.

Cable down at 1.5400 from early 1.5445. Poor UK house price/construction PMI data have weighed on sterling. Real money buyer seen around 1.5375 low helping lend much-needed support.

EUR/GBP up at .8325 from early .8280, but sell orders noted at .8330/50 have capped topside at .8338 so far.

EUR/CHF down at 1.2980 from early 1.3015 having been as low as 1.2945 at one stage. Swissy supported by strong GDP/retail sales data. UK clearer notable seller in very early trade.

USD/JPY unchanged at 84.18. Got as low as 84.01 before decent buying from a Dutch bank lent much-needed support. The Danish bank, who has been notable buyer of late, was also said to have been in buying again.

Spanish/German 10-year government bond yield spread falls to 169 bps

Gerry Davies — Thu, 02 Sep 2010 09:38:23 +0000

Lowest since August 20. Hooray!!!

UK construction PMI 52.1 in August

Gerry Davies — Thu, 02 Sep 2010 08:35:32 +0000

Versus 54.1 in July. Much worse than median forecast of 53.2.

It’s all coming apart at the seams (that’s better) I tell ya!!! I packing my bags and moving to ……..Sweden!!!

“You can dance, you can jive having the time of your life

See that girl, watch that scene, diggin’ the dancing queen”

No decision yet on Anglo Irish bank – Government source

Gerry Davies — Thu, 02 Sep 2010 08:04:41 +0000

Govt still discussing either gradual wind-down or good bank/bad bank split with EC

China won’t launch new stimulus but will be wary of exiting from current one – Govt researcher

Gerry Davies — Thu, 02 Sep 2010 07:55:56 +0000

China has no need for big economic initiatives, credit growth ample

Swedish central bank raises key repo rate to 0.75% from 0.50%

Gerry Davies — Thu, 02 Sep 2010 07:35:15 +0000

As expected.

Swedish crown rises vs euro in wake of move. Guess selling of EUR/SEK will be weighing on EUR/USD which is down at 1.2785. EUR/SEK cross down around 9.3100 from 9.3321 just prior to rate increase announcement.

Swiss retail sales +4.8% y/y in July

Gerry Davies — Thu, 02 Sep 2010 07:19:51 +0000

Stronger than median forecast of 2.3% y/y.

Spain’s August jobless rate rises 61,083

Gerry Davies — Thu, 02 Sep 2010 07:02:11 +0000

To 3.97 mln.

UK August house prices -0.9% m/m, +3.9% y/y – Nationwide

Gerry Davies — Thu, 02 Sep 2010 06:02:49 +0000

Much weaker than expected, median forecasts having called for -0.3%, +4.9% respectively

Biggest monthly fall since February. Smallest annual rise since November 2009.

Swiss Q2 real GDP +0.9% q/q, +3.4% y/y

Gerry Davies — Thu, 02 Sep 2010 05:53:48 +0000

Stronger than median forecasts of +0.8%, +2.7% respectively

Japan’s Ozawa: FX intervention just by Japan may not have much effect, but should be prepared to act

Gerry Davies — Thu, 02 Sep 2010 05:40:03 +0000

Must stop rapid rises in yen
There are also other steps than yen-selling intervention to stem yen rise
Yen rises over long term not bad
Fine to debate tax reform, including sales tax
To keep promise not to raise sales tax before next general election

French Q2 ILO jobless rate falls to 9.7%

Gerry Davies — Thu, 02 Sep 2010 05:38:20 +0000

From unrevised 9.9% in Q1. Better than expected 10%

Jobless rate in mainland France falls to 9.3% from unrevised 9.5% in Q1. Better than expected 9.6%

Hungary’s economy stable, financing is secure, there is no need for talks about new IMF loan – PM spokesman

Gerry Davies — Thu, 02 Sep 2010 05:24:33 +0000

Hungary will meet its obligation to achieve 3.8%/GDP 2010 budget deficit target

EUR/USD touch easier in quiet Asian trade

Gerry Davies — Thu, 02 Sep 2010 05:22:18 +0000

EUR/USD down slightly at 1.2790 from North American close Wednesday around 1.2810, with price action confined to conservative 1.2786-1.2813 range.

Euro zone data today:

05:30 GMT: French ILO mainland unemployment Q2 9.6%, unemployment rate 10.0%

08;00 GMT: Italian PPI for July expected +0.4% m/m, +4.3%

09:00 GMT: Euro zone Q2 GDP (prov) expectewd +1.0% q/q, +1.7% y/y

09:00 GMT: Euro zone PPI July expected +0.3% m/m, +4.0% y/y

11:45 GMT: ECB rate decision. Senn steady at 1.0%

12:30 GMT: ECB press conference

White House still bearish on growth

Jamie Coleman — Wed, 01 Sep 2010 17:06:11 +0000

Outgoing Council of Economic Advisers head Christina Romer says the US faces a substantial shortfall of aggregate demand and that growth is still about 6 percentage points below the trend level. That is the main cause of unemployment, she says. The US must take quick action to boost demand and bring down unemployment. The best way to do that is in the short run is for the government to spend more and tax less, she says.

It is interesting to hear an unvarnished assessment from the esteemed economist, not the usual happy talk, as she backs her bags to return to academia.

ADP employment report: -10,000

Jamie Coleman — Wed, 01 Sep 2010 12:15:15 +0000

Might dampen risk sentiment. Economists expected 19,000 new private sector jobs.

1.2780 is first support; more at 1.2745.

ForexLive European Wrap: Risk sentiment in good shape

Gerry Davies — Wed, 01 Sep 2010 11:16:39 +0000

China’s passenger car sales rose 59.3% y/y in August, marked improvement from the 15.4% y/y rise seen in July
Departing White House economist Romer: US budget deficit cannot be excuse for leaving unemployed to suffer. US has tools that would bring unemployment rate down, must find will to use them
Currency trading growth slowed amid crisis, BIS says
German July retail sales -0.3% m/m, +0.8% y/y, weaker than median forecasts of +0.5%, +1.4% respectively
Swiss PMI for August 61.4, demonstrably weaker than median forecast of 66.0
Euro zone final manufacturing PMI for August 55.1, fractionally up from flash 55.0, but down from 56.7 in July and lowest read since February
UK manufacturing PMI for August 54.3, demonstrably weaker than median forecast of 57.0. Lowest read since last November
Spanish/German 10 year govt bond spread narrows to 177 bps from 186 bps at Tuesday settlement. Italian/German 10 year govt bond spread narrows to 158 bps from 165 bps at Tuesday settlement
German FinMin: Sees little sign of higher interest rates in foreseeable future. Greece deserves respect for its efforts on budget consolidation

EUR/USD started around 1.2700 and made an orderly ascent in early trade. The overnight release of good Australian Q2 GDP and Chinese August PMI data had set the tone. The momentum increased as European stocks extended their gains, and stops through 1.2750 and 1.2780 were triggered on way to session high 1.2812.

Middle Eastern selling, probably including sovereign interest, has been noted above 1.2800.

Cable at 1.5380 effectively unchanged on the day. Early rally floundered after running into well noted sell orders up at 1.5415/25. The release of demonstrably weaker UK manufacturing PMI has served to inhibit cable gains, despite the generally better risk sentiment which would usually lift the pairing.

EUR/GBP UP AT .8316 from early .8255, with major Swiss commercial bank notable buyer of the cross after the weak PMI data.

EUR/CHF up at 1.2972 from early 1.2900, underpinned by the better risk sentiment, swissy losing a little of it’s safe haven premium.

USD/JPY down at 84.00 from early 84.35, garnering absolutely no support from the better risk environment. A touch worrying. Well not if you’re short I guess.

AUD/USD up at .9055 from early .8975, underpinned by better risk sentiment. Stops tripped through .9040 on way to .9061 session high. More stops noted through .9080.

German FinMin: Sees little sign of higher interest rates in foreseeable future

Gerry Davies — Wed, 01 Sep 2010 10:23:55 +0000

Greece deserves respect for its efforts on budget consolidation