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Europe Data EyedTitle:
Spotlight on the Sterling
Forex News and Events:
Yesterday’s European session was a breather for the Euro area as German GDP came in much better than expected at 0.5% q-o-q. The strength of Germany’s numbers pulled EU’s GDP higher to 0.0% against a forecast -0.2%, avoiding a technical recession after last quarter’s -0.3% GDP. Nevertheless, both German and Euro zone economic sentiments were lower, underscoring a fading institutional optimism over economic health. GDP for the biggest European economies after Germany were worrisome, with France generating no growth in the first quarter of 2012 while Italy and Spain’s economies contracted by 0.8% and 0.3% respectively over the same period. The situation in Greece is still moving towards a new round of elections with Independent Greeks party leader Kammemos announcing ...
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YouTradeFX Weekly Market Analysis : 14/05/2012
Consumer sentiment in the U.S. rose to 77.8 in May from the final April reading of 76.4, according to a report released by Reuters and the University of Michigan on Friday. While, the Labor Department said on Friday that its producer price index fell by 0.2 percent in April. According to Bloomberg news, Sales at U.S. retailers probably slowed in April as the weather turned more seasonable and consumers took a breather following a pre-Easter holiday buying spree, economists said before a report this week. The projected 0.2 percent gain in purchases would follow a 0.8 percent advance in March, according to the median forecast of 68 economists surveyed by Bloomberg News ahead of Commerce Department figures on May 15. Events in the U.S, likely to affect the markets this week are: Monday; a ...
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Dukascopy Morning Forex Overview : 10/05/2012
Fundamental Analysis
EUR
"The real concern isn’t about Greece, it’s about the euro and whether it breaks up -- that is key."
- Mark Tinker, a fund manager at AXA Framlington Investment EUR Management
European stocks declined on Wednesday as investors awaited resolution of Greek coalition talks and yields on Spanish 10-year bonds rose above 6 per cent.
USD
"Certainly as a result of the elections in Greece, the odds of a default and an exit from the euro have increased."
- James Dunigan, chief investment officer for PNC Wealth Management
U.S. wholesale inventories rose in March at a slowest pace since November, Commerce Department data showed on Wednesday.
GBP
"Consumers, struggling to balance their household budgets, remain reluctant to spend..."
- Stephen Robertson, BRC director ...
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Gold rises as jobs data renews Fed easing hopes
(Reuters) - Gold rose on Friday as investors selling crude oil and equities bought the metal after a weak U.S. nonfarm payroll report boosted bullion's investment appeal on talk that a weaker economy might prompt further monetary easing by the Federal Reserve.
Bullion still finished down 0.6 percent for the week. Gold has dropped $150 from a peak in late February after a strong run of U.S. data cast serious doubts over whether the Federal Reserve would launch a third round of government bond purchases, or quantitative easing, also known as QE3.
Fed Chairman Ben Bernanke "had said QE3 is going to be dependent on the incoming data. Next time when he speaks he's going to reemphasize that the Fed is willing to do more," said Axel Merk, chief investment officer of Merk Funds with about $650 ...
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Focus on ECB’s Press Conference
FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)
WORLD
Expectations are building that today’s ECB press conference could see the central bank turn significantly more dovish., with euro negative consequences. Wednesday’s series of worrisome Eurozone data prints would certainly seem to warrant a rhetorical shift. It has also not gone unnoticed that President Draghi endorsed the concept of a “growth compact” in parliamentary testimony last week for the first time. Investors have also remarked on the meeting’s location – in Barcelona for a change – in the expectation that this will somehow concentrate minds on the gravity of the situation facing the periphery, thus provoking a more dovish outcome.
These observations are not without merit, but market speculation of a possible rate cut – either to ...
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Dukascopy Morning Forex Overview : 02/05/2012
Fundamental Analysis
EUR
"The likelihood of inflation falling below 2 percent in the short run remains low, putting the ECB in a difficult situation."
- Peter Vanden Houte, an economist at ING
Inflation in the euro zone rose by more than expected in April, mounting pressure on the European Central Bank to take action against price pressures.
USD
"Manufacturing is still in pretty good shape."
- Scott Brown, chief economist at Raymond James & Associates Inc.
Manufacturing in the U.S. expanded in April at the fastest pace in 10 months, showed Institute for Supply Management data on Tuesday.
GBP
"The good news is that manufacturing clocked up a fifth straight rise, whilst cost pressures have eased a little and some firms are still recruiting."
- Lee Hopley, chief economist at EEF
U.K. ...
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Safety dominates investor outlook
(Reuters) - Caught in a vice between sluggish global growth and worldwide debt deleveraging, investors face another week of potentially gloomy economic news with no relief in sight from the growing concerns about euro zone debt.
The focus will be mainly on the European Central Bank's monthly policy meeting, the U.S. non-farm payrolls report and data on the outlook for the world's manufacturing sector, which still represents 20 percent of the global economy.
But these events are not expected to offer much diversion from the steadily worsening crisis in the euro zone, which is driving demand for safe haven assets.
"It's about capital preservation from an investor point of view," said Richard Batty, global investment strategist at Standard Life Investments, which has $240.7 billion of ...
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ECB and Fed on the Sidelines
Forex News and Events:
Without the strong guiding hand of the Fed and ECB, EURUSD momentum will remain indecisive. FX traders are now conditioned to expect the heavy hand of the central banks and to be without that intervention, the pair and risky assets will be range-bound. Wednesday's FOMC meeting suggested that the majority of Fed officials are on hold, willing to simply monitor the US recovery. The statement reaffirmed the FOMC’s conditional commitment to leave policy at near-zero until at least late 2014. In addition, there seems to be little desire for extending Operation Twist or replacing it with any alternative stimulus. Given the choppy nature of incoming data we suspect that the Fed will be in a wait and see mode. But the guessing game will continue. Today’s GDP will provide ...
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Risk Appetite Reverses
Forex News and Events:
What started out as a risk positive day has slowly reversed itself. The catalysis looks to have been the weak EC business and consumers surveys that suggested Europe remains in a gloomy economic state. The EC Economic Sentiment Indicator dropped from 94.5 to 92.8 showing a decline for the second consecutive month. The countries underlying studies showed a sharp drop in the Italian read while Germany also registered a lower read to 103.03 from 104.3. These numbers suggest that the recent pullback in economic data, including PMI reads, were not just a one off rather indications of a broader trend. The divergence between countries remains wide with the peripheral economies facing deep recessions. We all know that the key to this European crisis is growth and without it, ...
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