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Improvement In Labor MarketTitle:
Weekly Economic and Financial Commentary : 16/03/2012
Weekly Economic and Financial Commentary
U.S. Review
“March Happiness” Tempered by Late Week Reports
As March Mayhem arrives in the sports world, investors found much to be happy about with many of this week's economic releases. Retail sales improved for the second straight month thanks to a stronger labor market, rising consumer confidence and unseasonably warm weather across much of the country. Regional manufacturing indices also improved, while import and producer price growth slowed. However, Friday's reports tempered the enthusiasm as industrial production was unchanged, rising gas prices led to the biggest increase in consumer prices in 10 months, and consumer sentiment slipped.
Signs of a Consumer Rebound
Following a weak end to 2011, retail sales have bounced back, rising 0.6 ...
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Greenback rises before U.S. data
The U.S. dollar showed slight advance before the release of industrial production and confidence data which is expected to show the U.S. economy is on the right track towards recovery.
The green currency managed to rebound on Friday trading after its drop yesterday on signs the U.S. economy is strengthening and QE3 is not coming any soon.
The Fed said this week it predicts a “moderate economic growth” gradual decline in joblessness as the labor market strengthens.
Yesterday, data showed that U.S. initial jobless claims retreated to 351,000 in the week ended March 10 from forecasts of 357,000 and a revised of 365,000. Manufacturing indices also showed better-than-expected improvement.
Today, industrial production is predicted to advance 0.4% in February from the prior flat reading, ...
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Jobless claims fall, manufacturing holds up
Economic growth showed signs of becoming more self-sustaining as the number of Americans claiming new jobless benefits fell back to a four-year low last week and manufacturing activity in the Northeast picked up this month.
But the impact of higher oil prices was also starting to be seen in data on Thursday. Producer prices racked up their biggest increase in five months in February, while manufacturers in New York state reported a surge in input costs in March.
The recent gains in oil and gasoline prices have raised concerns the higher costs could start to squeeze businesses and consumers and put a dent in the recovery.
Still, producer prices last month did not rise as much as economists had expected, and underlying inflation pressures were contained.
Thursday's initial claims data ...
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Oil slips below $125 on strong supply, dollar
Brent crude oil fell below $125 on Thursday as the outlook for global oil supply strengthened, offsetting likely increase in demand from a recovery in the United States economy.
The world's biggest economy is bouncing back from a prolonged slowdown, a recovery that will bring increased energy demand, but oil supply in most markets looks ample and worries that a confrontation with Iran could disrupt supplies have eased in recent days.
"Absent of escalation in geo-political tension or military confrontation with Iran, you don't have too many fundamental or financial news that are supportive of the prices rising," said Harry Tchilinguirian, head of Commodity Strategy for BNP Paribas.
"A lot of managed money funds have been taking money off the table," Tchilinguirian added.
ICE Brent crude ...
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Jobless claims back at four-year lows
The number of Americans claiming new jobless benefits fell back to a four-year low last week and manufacturing in the Northeast held up in March, providing more signs the economy was firmly on a self-sustaining growth path.
Initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 351,000, the Labor Department said on Thursday. That took claims back to a four-year low reached in February.
Separately, the New York Federal Reserve said its Empire State general business conditions index rose to 20.21 - highest level since June 2010 - from 19.53 in February.
"This suggests that the recovery is firmly on track," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
The reports were the latest to imply the economy was holding its own, ...
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USD and Risk Rally Continues
Forex News and Events:
Risk rally looks to be full on as commodity and equities continue to surge. Yesterday on the data front, German ZEW was mixed but generally viewed as positive. Economic Sentiment, from +5.4 to +22.3 (highest level since June 2010). These reads aid forecasts that suggests that while Eurozone had slipped back into a recession, Germany has held up surprisingly well. However, the German consumer is still hurting, opting to save verse spend, but they are still not strong enough to lift the rest of the EU out of its economic slump. The US retail sales saw further improvement and should continue to gain traction as the strong labor markets stimulate consumer spending. However some of the optimism should be tempered as 3.3% m/m surge in gasoline station sales, help the ...
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Wall Street to Rise Before FOMC Rate Decision
U.S. Stocks May rebound today as a goverment report will show February retail sales in the U.S. probably climbed by the most since September, while the Federal Reserve will mostly reiterate the pledge to keep the federal funds rate near zero through 2014.
The U.S Department of Commerce through its Census Bureau will announce today the retail sales figure, probably rose 1.1 percent in February, backed by a buoyant demand on automobiles as improvement in labor market looks to be fueling consumer spending.
A rebound in sales of motor vehicle and parts dealers due to higher gasoline prices has likely bolstered the sales last month. Purchases of cars and lights trucks rose to a 15 million annual rate in February by the most in four years, according to figures from Ward's Automobile Group.
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Fed seen biding time, assessing jobs gains
The Federal Reserve on Tuesday is expected to hold a steady course on monetary policy, acknowledging a mildly brighter economic outlook while refraining from any suggestion that further easing is now off the table.
Indeed, the central bank, sifting through conflicting economic signals, is unlikely to offer much of anything in the way of fresh clues on its policy course after its one-day meeting.
"I just don't see them being anywhere near ready and certainly not under any pressure to make any judgment this week about which way things are going to go," said Nigel Gault of IHS Global Insight in Lexington, Massachusetts. "This is really the occasion for them to do absolutely nothing."
Fed officials are expected to nod to the labor market's stronger pulse in a statement due at about 2:15 p.m. ...
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Gold gains ahead of Fed meeting, euro helps
(Reuters) - Gold ticked higher on Tuesday as the euro rebounded although trading was cautious with investors waiting for the outcome of a Federal Reserve meeting, which could offer clues over the direction of interest rates in the world's largest economy.
Easing expectations for the Fed to signal the need for more measures to keep interest rates low could eventually weigh on gold, which has risen around 9 percent so far this year on a near-zero U.S. rate outlook.
Gold added $3.45 to $1,702.50 an ounce by 0707 GMT, with support at the 200-day moving average of around $1,680 an ounce. Bullion rallied to an all-time high around $1,920 an ounce last September.
"I think everybody is staying on the sidelines. On the investment side especially, people still try to keep more cash on hand. They ...
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