Sunday, July 29, 2012

This week's Economic data in FX

Great Britain: this week we will see important economic data to be released throughout the week.  Heading the statistics will be the Bank of England’s Interest rate decision on Thursday morning and it is widely expected to remain unchanged at 0.50%.  Perhaps of more importance, we will also see the Bank’s Asset Purchase Target, which is expected to be 375 Billion Pounds. 

Earlier in the week, we will see on Monday figures for Mortgage Approvals in June and the market expects a significant decline to 48,000 – down from 51,100 in May.  M4 Money Supply is also out on Monday morning and market participants expect to see an increase in M4 of 0.30% in June, up from a decline of 0.10% in May.  A declining monetary base creates deflationary tendencies.

Later on Monday figures will be released for British CBI Reported Sales in July and a figure of 20 is expected versus the prior report of 42.  GfK Consumer Sentiment is also out and expect an unchanged reading of -29.  Tuesday evening BRC Price Shop Index will be reported on a year-over-year basis, with the prior period showing a gain of 1.10%.  Wednesday morning the PMI Manufacturing figures for July are out and a nearly unchanged number is expected by the market at 48.6.  After Thursday’s big news from the BofE, we have on Friday PMI Services numbers for July and a modest increase is expected to 51.9 from June’s 51.3.

Japan: this week features a wide variety of Japanese economic data.  Starting on Sunday evening, we have Japanese Industrial Production figures on a month-over-month basis for June.  The preliminary figure is expected to show a gain of 1.50% versus the prior reporting period of a decline of 3.4%.   Monday evening features the Nomura/JMMA Manufacturing PMI outlook for July with the prior reading of 49.9.  More on Monday: The Japanese Unemployment rate for June will be out and market participants expect an unchanged 4.40% reading.  Also figures for Household Spending will be announced and a decline is widely expected – albeit to a lower positive level.  Finally on Wednesday of this week we will see the Monetary base reading on a year-over-year basis.  July’s Monetary base is expected to have grown by 6.20% from June’s figure of 5.90%.

Australia: A relatively light week is in store for Australian economic data.  On Tuesday this week we expect to see figures for Australian Building Approvals announced in the morning.  On a month-over-month basis we expect a 15% decline versus May’s high reading of 27.3%.  Wednesday morning features the Australian House price index for the second quarter.  On a quarter-over-quarter basis markets are expecting a decline of 0.50%, about half the prior quarter’s decline of 1.10%.

Thursday morning features Australian Trade Balance figures for June and a deficit of 375 million Aussie Dollars is forecast, as compared to May’s deficit of 285 million.  Also out on Thursday morning will be Retail Sales for June.  Market participants expect, on a month-over-month basis, an increase of 0.60%, comparing favorably to the May increase of 0.50%.

Swiss: In spite of a plethora of Euro-zone economic data released this week, the Swiss currency will be little affected by economic data this week.

Tuesday features Swiss readings from UBS and the UBS Consumption Indicator for June.  Expect a reading of 1.05.  Thursday we get the SVME-PMI Index for July and markets are expecting a 47 reading, down from 48.1 in June.  That’s all for the Swiss economic data during the week, again a relatively light week of data.

Euro-zone: In the Euro-zone this week we feature a plethora of economic data.  On Monday evening we will see figures for EU Consumer and Economic Confidence in July and readings similar to June’s are expected.  Also on Monday we get Euro-zone readings on Industrial and Services Confidence – both readings are expected to weaken versus the June reporting.
Tuesday features German economic data in the morning with German Retail Sales being released first.  Retail Sales on a month-over-month basis are expected to have picked up 0.50% from June’s decline of 0.30%.  German Unemployment Change is widely expected to remain unchanged at 7.000 in July and the Unemployment Rate is expected to remain unchanged at 6.80%.  In the Euro-Zone on Tuesday morning we will see figures in Italy for Unemployment for June and the preliminary reading should rival the prior period of 10.1%.  Also on Tuesday, the Euro-zone CPI estimate for July is expected to be unchanged on a yearly basis.  The Euro-zone Unemployment Rate for June is expected to show a slight increase to 11.2% from May’s 11.1%.

Wednesday is a relatively light day with Euro-zone PMI Manufacturing out for July.  This preliminary reading is expected by the market to remain unchanged at 44.1

Thursday features the ECB interest rate decision and market participants see the rate being left unchanged at 0.75%.  Following this interest rate decision, we will have a ECB Press Conference where market participants may glean additional financial and economic details.  Earlier on Thursday we will also have data, this time in the form of Euro-zone PPI.  Markets are expecting slight declines in the monthly and yearly figures to be released.

Friday features Euro-zone PMI for the Service Sector and market participants expect unchanged readings in the range of 47.6.  Also out will be Euro-zone Retail Sales, which are expected to be flat in June versus May’s increase of 0.60%. 

Canada: In Canada this week we feature another quiet week of economic data being released.  Nonetheless, on Tuesday we will receive an important piece of economic data with the Canadian GDP for May being released.  On a month-over-month basis, Canadian GDP is expected to have increased by 0.2% in May, versus April’s 0.3% rise.  Annualizing these figures, we approach Australia’s 3.5% GDP growth figures – so the Canadian economy can show its colors with their GDP this week.  Also on Tuesday we have the Raw Materials Price Index.  Here, markets expect an increase in raw material prices for June of 1.70% versus May’s decline of 1.0%.

Most eyes will be on the US economic data, gold and oil as traders will be pricing in future expectations of the relative strength of the Canadian economy versus their southern trading partner.

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