Daily Forex market overviews by MasterForex

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Overview of the main economical events of the current day - 09/08/2013

China’s import rocketed in July

The US dollar was traded downwards on Thursday against all major currencies and fell to 7-week low according to the dollar index amid Unemployment Claims which according to the US Labor Department rose by 5 thousand last week from 328 thousand to 333 thousand. Last week data were revised for the worse by 2 thousand. Meanwhile FOMC member Richard Fisher said again on Thursday in the interview to German newspaper Handelsblatt that he considered reducing of assets purchase in September possible if the situation in the economy worsened significantly.

The euro continued rising and approached to the level of 1.34 Vs dollar. According to the Federal Statistics Office of Germany trade surplus grew significantly in June up to €15.7 bln Vs revised upwards May reading €14.6 bln, consensus €15.2 bln. German Current Account Surplus also turned out higher in June than forecasted. It grew from €11.2 bln in May to €17.3 bln having exceeded the forecast of €16 bln.

The yen rose at first after 2-day meeting of the Bank of Japan that finished on Thursday where its policy was kept unchanged in expectation of new economic growth data which will be published next week. However, then the yen lost all its growth amid stock indexes strengthening. Bank of Japan Governor Kuroda introduced a more positive economy estimate on Thursday and called upon increasing sales-tax.

The Australian dollar had grown by the end of the day having almost no reaction on bad non-farm payrolls. Employment rate in Australia decreased by 10.2 thousand in July while a growth by 6 thousand was expected. However, unemployment rate didn’t change and maintained the same 5.7% Vs growth to 5.8% consensus. The AUD was also supported by other commodity currencies – Chinese trade balance for July. Though Trade Surplus dropped from $27.1bln prior month to $17.8 bln – China’s import grew by 10.9% and the export from Australia to China increased by 25%.

The Canadian dollar rose significantly in anticipation of Canadian non-farm payrolls having shown the most considerable one day growth almost within a month. Extra 10, 000 jobs are expected to have been added in the Canadian economy in July and unemployment rate have remained at the same 7.1%. The released New Housing Price Index grew in June a little more than expected by 0.2% Vs growth by 0.1% Consensus.

 

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Overview of the main economical events of the current day - 12/08/2013

The Main Events of the Week

The US dollar was traded downwards on Friday Vs the yen and commodity currencies and slightly upwards Vs major European currencies. The Canadian dollar had ignored the employment report for July by the end of the day which turned out worse than expected. Employment rate in Canada fell unexpectedly by 39.4 thousand (expected growth by 10 thousand) and unemployment rate increased by 0.1% up to 7.2%.

Chinese statistics data supported commodity currencies which showed industrial output growth and moderate inflation. Industrial output grew by 9.7% in July at an annual rate (Vs Consensus 8.9%) and fixed-asset investment rose by 20.1%. The euro was traded downwards after having reached 7-week high against the dollar. Some pressure was put by French industrial output which shrank by 1.4% m/m while a growth by 0.3% was expected.

By the end of the week the dollar had lost 1% according to the dollar index still being under pressure after the publication of key Non-Farm Payrolls report that turned out disappointing. The largest growth Vs US dollar was shown by the Australian dollar (+3.28%), Japanese yen (+2.81%), New Zealand dollar (+2.73%) and British pound (+1.44%). This week there will be a release of GDP, inflation, industrial output and retail sales data.

The main event of the week may become Wednesday release of preliminary GDP for the second quarter of major countries and the whole euro-zone. Euro-zone GDP is expected to grow for the first time in 6-quarter recession. German and Euro-Zone ZEW Economic Sentiment and euro-zone industrial output will be released on Tuesday – indicators’ growth is expected. It is a day off on Thursday in France and Italy and on Friday there will be a release of euro-zone inflation, trade balance and current account data.

On Wednesday in Great Britain there will be a release of Bank of England Meeting Minutes and non-farm payrolls report. MPC Official Bank Rate Votes and Asset Purchase Facility Votes will attract attention. The Meeting minutes are expected to show a unanimous vote to keep everything unchanged. Unemployment rate will also draw attention as the Bank of England tied its monetary policy to this indicator and promised to toughen the policy until unemployment fell to 7%. Producer and Consumer Price Indexes will be released on Tuesday and retail sales – on Thursday.

In New Zealand also a quarter retail sales report will be published on Wednesday and Business NZ Manufacturing Index – on Thursday. In Australia NAB Business Confidence Index will be released on Tuesday and Westpac Consumer Confidence Index – on Wednesday. Japanese Flash GDP for the second quarter will be released on Monday.

There are rather a lot of US data. On Tuesday – retail sales. Producer Price Index will be released on Wednesday and Consumer Price Index – on Thursday. On Thursday capital inflow, industrial output and Philadelphia Fed Manufacturing Index will be published. On Friday House Price Balance (Building Permits and Housing Starts) and also Prelim U. of Michigan Consumer Sentiment will be published.

 

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Overview of the main economical events of the current day - 13/08/2013

Japanese GDP Growth Rate Slowed Down in the Second Quarter

The US dollar was traded upwards on Monday having continued its Friday corrective growth amid a poor news background in anticipation of the release of various US macrostatistics data planned for this week which can support the expectations concerning Fed incentive measures reduce. In particular, US retail sales data will be published on Tuesday.

On Monday there were almost no significant statistics data except Japanese Preliminary GDP for the second quarter. According to the preliminary estimate Japanese GDP for the second quarter rose only by 0.6% while a growth by 0.9% was expected. Prelim GDP Annualized accounted for 2.6% (Consensus growth by 3.6%) Vs 3.8% in the first quarter.

Comparison of quarterly GDP growth rates in Japan and the U.S.

Prelim Nominal GDP has risen by 0.7% at a quarterly rate which turned out lower than forecasted growth by +1.0%. Consumer Spending increased by 0.8%, which exceeded the expectations but Business Spending decreased by 0.1% against the expected growth by 0.6%. However economic growth of Japan for the first six months has been the best for the past three years.

Japanese revised Industrial Production for June decreased by 3.1% at a monthly rate, which coincided with the expectations. At an annual rate Industrial Production in June dropped by 4.6%. At the same time Domestic Corporate Goods Price Index (DCGPI) (analogue of the PPI) grew by 0.5% m/m in July, which exceeded forecasted growth by 0.2%.

The euro continued its correction downwards and tested the level of 1.33 Vs dollar. Preliminary GDP of Greece for the second quarter showed economic growth rate decrease by 4.6% at an annual rate although turned out better than forecasted -4.8%. Meanwhile former ECB president Jean-Claude Trichet declared on Monday that Europe had made progress and the risk of the euro-zone collapse had probably disappeared but the reforms must be continued further.

The Australian dollar reached 2-week high on Monday’s Assian session but then slightly dropped after the dollar’s growth. Some support at the beginning of the day was provided by good Chinese economy statistics published last week which dispelled the fears concerning Chinese economic growth slowdown. New Zealand dollar was also traded downwards. According to Real Estate Institute of New Zealand (REINZ) report housing prices fell in July for the first time for the past 6 months. REINZ Housing Price Index dropped by 0.5% compared with June.

 

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Overview of the main economical events of the current day - 14/08/2013

US Retail Sales Have Been Rising for 4 Months in a Row

The US dollar was traded upwards on Tuesday against most major currencies amid the release of a positive retail sales report and increasing US treasury bonds yields. Retail sales grew by 0.2% in July compared with the prior month, which almost coincided with the expectations of 0.2-0.3%. However, prior month sales were raised: June growth accounted for 0.6%, not 0.4%.

US Retail Sales m/m

Retail Sales ex Auto, which show consumer spending trends better, rose by 0.5%, Consensus 0.4%. Its growth in July has been the best since early 2013. Employment growth and consumers welfare improvement due to house price and stock quotes growth have a positive effect on consumer spending growth, which may offset the negative impact of government spending cuts on the U.S. economy.

The euro dropped on Tuesday despite German Economic Sentiment growth. According to the Centre for European Economic Research ZEW, German ZEW Economic Sentiment grew up to 42 in august compared with 36.3 in July anticipating the forecasted growth to 39.9. Euro-zone Economic Sentiment has also rocketed to its high since 2010. According to Dr. Michael Schröder - Head of the Research Department of ZEW – the worst part of the recession in the euro-zone has already been passed. At the same time, euro-zone industrial output rose only by 0.7% in June, which turned out lower than forecasted +0.9%.

The pound had almost no reaction on inflation data for July which turned out close to the expectations. Consumer Price Index dropped to 2.8% from 2.9% in June. Core inflation that excludes energy and food prices slowed down more than forecasted to 2% from 2.3% prior month. But the pound was traded better than the euro – housing market data provided support. RICS House Price Balance grew to 36 in July against 21 in June having reached the highest level since November, 2006. ONS House Price Index was rising at the fastest rate in June since December, 2012 – by 3.1% at an annual rate.

The yen continued weakening on Tuesday for the second day amid Japanese stock market growth which increased by 2.6% according to Nikkei. Some support was provided by both statistics data and Nikkei newspaper message that the government of Japan considered a possibility of corporate income taxes reduce to mitigate the effect of the planned sales tax increase. Core Machinery Orders dropped only by 2.7% in June while a fall by 7% was expected. Besides, the Bank of Japan published BoJ Monetary Policy Meeting Minutes on Tuesday where the estimate of state of the economy has been raised to a "moderate recovery".

The Australian dollar was traded downwards on Tuesday amid the Business Confidence decrease. NAB Business Confidence dropped below zero in July to -3 (the lowest in 6 months) Vs 0 in June.

 

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Overview of the main economical events of the current day - 15/08/2013

Euro-Zone Economy Comes Out of Recession

According to the official statistics agency ЕС Eurostat data released on Wednesday the euro-zone economy is coming out of the longest post-war recession. The euro-zone GDP growth recovered in the second quarter of this year after its decline within 6 quarters. Total GDP of 17 euro-zone countries grew by 0.3% in comparison with the first quarter, which exceeded the expected growth by 0.2%. Almost all the statistics data released recently in the region indicated euro-zone economic recovery.

Quarterly GDP growth of the Euro-zone and the USA

Euro-zone economy has risen mainly due to good German and French indicators. Two largest euro-zone economies showed a more significant rise last quarter than expected. German GDP grew by 0.7% Vs consensus +0.6%. French economy increased by 0.5%, which has exceeded expected growth by 0.2% even more. The euro had almost no reaction towards positive statistics and it was traded in a narrow range all day.

The pound grew considerably on Wednesday after the release of positive labor market report and BoE Meeting Minutes. Claimant Count Change dropped by 29.2 thousand in July while a decrease only by 15 thousand was expected. Prior month data were also revised fore the better. Unemployment rate had been falling for nine months in a row last month, in June and July it had been especially significant since March, 2010, which has become another proof of a strengthened British economic recovery.

Claimant Count Rate last month dropped by 0.1% to its low 4.3% since February, 2009 while no changes were expected. According to the end of the second quarter ILO Unemployment Rate maintained at 7.8%, which coincided with the expectations. Bank of England Meeting Minutes showed a unanimous vote on the rate and the QE size but one of the MPC members Martin Weale opposed the policy of providing Forward Guidance concerning the monetary policy outlook as he had a hard-line attitude towards inflation.

The dollar turned out under pressure on Wednesday due to unexpected drop of Producer Price Index which didn’t meet the forecast. Producer Price Index published on Wednesday didn’t change last month although its growth by 0.3% m/m was expected. Core Producer Price Index which excludes volatile components (energy and food) also has risen only by 0.1% m/m Vs 0.2% growth Consensus.

FOMC Member Bullard making speech on Wednesday evening referred to low inflation and said that FOMC outlook seemed to be too optimistic. Fed needs to analyze a lot of information before taking a decision concerning asset purchase tapering off. Besides, according to him, key factors concerning QE issue will be inflation data, GDP, employment and FED balance. All this seems to put off the terms of possible QE reduction from September to October as far as the Fed will have too little reliable information about the third quarter.

New Zealand dollar rose on Wednesday after the release of a positive retail sales report for the second quarter which showed sales growth by 1.7% at a quarterly rate, which exceeded the expected growth by 1.4%. The Australian dollar also strengthened amid consumer sentiment increase. Westpac Consumer Sentiment rose by 3.5% in August to 105.7 Vs 102.1 prior month.

 

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Overview of the main economical events of the current day - 16/08/2013

UK Retail Sales Exceeded Expectations

The pound reached 8-week high on Thursday Vs dollar and 6-week high Vs euro after the release of UK retail sales report which considerably exceeded the expectations. Retail sales in July rose by 1.1% compared with the prior month while an increase by 0.7% was expected. Retail sales in July grew for the third month in a row, which was recorded for the first time in 3 years. Retail sales grew by 3% at an annual rate (Consensus +2.4%) – it is the fastest growth rate since January, 2011.

Retail sales change in the UK and the USA (m/m)

The US dollar dropped on Thursday against most major currencies amid the release of macrostatistics data which mostly were negative although the dollar made attempts of growth at first after the release of strong unemployment claims data. Unemployment Claims in the USA fell more than expected last week – by 15 thousand to 320 thousand – the lowest level for more than 5 years since early 2008.

But all the other data on the capital inflow, industrial output and manufacturing PMI turned out worse than expected. Thus, foreign investors sold a net $81.6 billion in US long-term treasury bonds and bills in June, which turned out almost twice more than the last record level documented in May. Industrial output didn’t change in July compared with the prior month while its growth by 0.3% was expected. June growth was revised downwards to 0.2% from 0.3%.

Empire State Manufacturing Index dropped to 8.24 in August compared with 9.46 in July Vs expected growth to 10. A more important Philadelphia Fed Manufacturing Index also dropped more than expected – it fell to 9.3 in August against 19.8 in July while a drop only to 15 was expected. Consumer Price Index turned out as forecasted; and only NAHB Housing Market Index has risen significantly. FOMC member James Bullard who made a speech on Thursday repeated again as he did on Wednesday that the Fed needed more data to examine before taking a decision concerning bond purchase decrease.

Stock market fall, 10-Year Treasury Note Yield growth to 2-year high and a sharp rise of the gold also influenced dollar’s weakening. The yen grew significantly on Thursday amid a sharp decline of stock markets and Nikkei future. Stock index DJIA closed at a maximum fall since June, 20 by 1.47%.

New Zealand dollar reached 3-week high on Thursday on the back of manufacturing PMI increase to its high since June, 2004. Business NZ Manufacturing Index grew to 59.5 in July compared with 55.2 in June. Consumer confidence also grew - ANZ Consumer Confidence Index rose by 2.7% in August to 123Vs its decline by 3.3% prior month.

 

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Overview of the main economical events of the current day - 19/08/2013

The Main Events of the Week

he dollar was traded slightly upwards on Friday against most major currencies despite consumer confidence decline in the USA. Building Permits and Housing Starts also grew in July a little less than forecasted. Prelim U. of Michigan Consumer Sentiment fell unexpectedly to 80 p. in August from the highest reading 85.1 p. prior month since July, 2007. Mortgage rate rise can bring down the momentum of the real estate market growth which contributes to economic development.

By the end of the week the dollar had grown slightly by 0.2% according to the dollar index that shows its attitude towards the basket of six major currencies. The dollar showed the largest growth Vs yen (+1.38), Swiss franc (+0.44%) and Canadian dollar (+0.44%); it almost didn’t change against the Australian dollar (+0.10%) and the euro (+0.08%) and dropped against the pound (-0.77%) and New Zealand dollar (-0.77%).

Meanwhile according to the Bloomberg poll, 65% of the experts expect the Fed to announce tapering off of bond purchase program at the nearest Fed meeting in September and probably the first step will be a decrease by $10 billion. Important events for the dollar are expected in September: Fed meeting on September 18, the federal elections in Germany on September 22, continuation of US discussions on the next fiscal year budget.

The coming third week of the month is poor for significant data. The main event in the euro-zone will be Thursday release of French, German and the whole euro-zone Flash Manufacturing PMI and Flash Services PMI. German Producer Price Index will be released on Tuesday and German Final GDP for the second quarter – on Friday.

The UK Second Estimate GDP for the second quarter will be released on Friday. On Wednesday Public Sector Net Borrowing and CBI Industrial Order Expectations will be released on Wednesday and BBA Mortgage Approvals – on Friday. In Canada retail sales data will be released on Thursday and Consumer Price Index – on Friday. Trade balance of Japan will be released on Monday. HSBC Flash Manufacturing PMI will be released on Thursday.

In Australia on Tuesday there will be a release of the last meeting minutes of Australian Reserve Bank. Westpac and Conference Board Leading Indexes will be released on Wednesday and Thursday respectively. In New Zealand there will be a release of quarterly reports: Producer Price Index – on Monday and expected inflation in two years – on Tuesday.

FOMC Meeting Minutes will be released on Wednesday. Existing Home Sales will be released on Wednesday and New Home Sales – on Friday. Chicago Fed National Activity Index will be published on Tuesday and House Price Index – on Thursday. Annual Economic Symposium will be held in Jackson Hole, Wyoming from on August, 22-24. As expected, the Fed governor Ben Bernanke will not take part in it, which may lower the significance of this event for the markets.

 

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Overview of the main economical events of the current day - 20/08/2013

Australian dollar may drop to $0.80

US dollar was traded slightly downwards on Monday against the euro and the pound but almost didn’t change against the yen and rose Vs commodity currencies amid a poor news background - no US data were released on the first day of the week. FOMC member Jeffrey Lacker said that the first six months data proved that asset purchase hadn’t helped economic growth. 10-Year Treasury Bonds Yield continued to grow and reached its high since July, 2011. Dallas Fed president Richard Fisher believes that a sharp US Treasuries price fall is linked to the expectations of soon QE tapering off.

The euro grew after the publication of Bundesbank Monthly Report but then it lost all its growth. According to the report German economic growth in the second half of the year must stabilize after the second strong quarter. Central Bank of Germany also declared that ECB promises to keep low rates within a long period of time didn’t exclude the possibilities of rates increase in case of inflation pressure strengthening. Meanwhile, according to the Reuters Bad Loans Data in Spanish banks in June reached its historical high 11.6% Vs 11.2% in May.

The pound was traded upwards and updated its monthly height amid the increase of British economic growth outlook. Confederation of British Industry (CBI) raised its outlook for 2013 from 1% to 1.2% and for 2014 from 2% to 2.3%. The expectations for the current year turned out twice better than the budgeted level. “The economy has started to gain momentum for growth, the confidence recovers but all this is in the early stages”, - said director-general of the CBI John Cridland. Meanwhile according to the Rightmove House Prices dropped by 1.8% m/m in August – the first time this year amid a traditional fall in summer.

The yen dropped after the publication of Japanese Merchandise Trade Balance but then it recovered amid stock markets decrease. Trade deficit in July increased to 1.02 trillion yens (the third largest in history). The deficit has been fixed for 13 months in a row. Both exports and imports growth rates turned out the highest since 2010. The exports rose by 12.2% at an annual rate although it turned out weaker than expected. The imports exceeded the outlook and rose by 19.6%. Japanese exports recovery has continued in July for the fifth month in a row due to yen weakening.

The Australian dollar reached its high within three weeks at the Asian session on Monday but then it traded downwards before the publication of Australian Reserve Bank Meeting Minutes. New Motor Vehicle Sales in Australia fell by 3.5% in July compared with the prior month. Extra pressure was put by the statements of one of the PIMCO’s board members Scott A. Mather who said that AUD might fall to $0.80 during the next year as RBA would be forced to lower the key interest rate to 2% to stimulate economic growth and put a downward pressure on the national currency.

 

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Overview of the main economical events of the current day - 21/08/2013

The Dollar Fell Before FOMC Meeting Minutes Publication

The dollar dropped on Tuesday against almost all major currencies (except commodity ones) before the publication of FOMC Meeting Minutes on Wednesday. FOMC Meeting Minutes will clarify the placement of forces in the Federal Reserve about reducing the QE3 incentive program and whether it should be expected in September already. If the FOMC Meeting Minutes don’t say anything about QE tapering off and the state of economy is not considered good enough for this, it can have a negative impact on the dollar.

Extra pressure on the dollar was put by the decrease of the US National Activity Index. Chicago Fed National Activity Index (CFNAI) grew in July less than expected (-0.10) to -0.15 from -0.23 in June. Prior month reading was revised for the worse from -0.13 to -0.23. The index has been below zero for five months in a row since March – which indicates National Activity Index growth being below the trend.

The euro overcame the level of 1.34 Vs the dollar and closed higher than it for the first time since the middle of February. Construction Output in the euro-zone in June grew by 0.7% compared with the prior month, May data were revised from -0.3% to +0.5%. The reading has been growing for three month in a row making a significant contribution to overcoming the recession, which was shown by the euro-zone preliminary GDP released last week (GDP growth by +0.3% q/q after 6-quarter decrease). Belgium NBB Consumer Confidence Index had been growing for the fifth month in a row in August to its high for the last 15 months (to -12 from -16 in July).

The pound was traded upwards and updated the August maximum. According to the Council of Mortgage Lenders (CML), UK mortgage lending reached its high in July for almost 5 years amid incentive programs of the government: 16.6 bln pounds against 14.8 bln prior month. The yen has grown amid Japanese stock market decrease which according to Nikkei 225 lost 2.6% on Tuesday.

The Canadian dollar dropped Vs US dollar to its low for almost two weeks on the back of Wholesale Sales report in Canada which showed the highest decrease rates for more than 4 years. According to the Canadian Office for National Statistics, Wholesale Sales dropped by 2.8% in June against the expected decrease by 0.5%.

The Australian dollar fell after the publication of Australian Reserve Bank Meeting Minutes on August 6, which resulted in the decrease of the key interest rate to the record low 2.5%. The RBA declared in its meeting minutes that it didn’t exclude the possibility of further interest rate decrease in future although it hadn’t plans of mandatory rates decrease and it would continue to monitor the economic indicators. According to the minutes, AUD maintains overvalued in historical standards and it probably will continue falling.

New Zealand dollar weakened to a week low against the US dollar after the RBNZ Governor Graeme Wheeler speech. He called NZD rate overvalued, not just high, speaking of high credit risks. At the last meeting RBNZ used a mild formulation, which probably was a mistake. Also Wheeler announced on Tuesday that mortgage lending restrictions to borrowers with small deposits will be introduced since October 1, which put an extra pressure on the NZD.

 

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Overview of the main economical events of the current day - 22/08/2013

US Existing Home Sales Reached Its High for Almost 4 Years

The US dollar was traded upwards on Wednesday against most major currencies before the publication of the FOMC Meeting Minutes and it grew after the publication. In spite of the fact that the opinions of Fed leaders on the terms of bond purchase reduce divided, most Fed leaders’ wide support of the Fed governor Ben Bernanke’s plan on tapering off of incentives became evident although the minutes didn’t contain any apparent hints on the terms of QE reduce start.

It can be said that the text of the meeting minutes turned out without surprises. There are almost no changes in the Fed leader’s estimates of the state of the economy. Almost all FOMC members agreed that there was no need to make changes in the asset purchase program yet. The outlook of finishing QE program still depends on the data. Asset purchases will have been over by 2014 if the economic situation develops according to the expectations. In the whole the minutes raised the expectations that the Fed would start tapering off the economy incentive program within the next several months.

The dollar was supported on Wednesday by strong housing market data. Existing home sales grew by 6.5% in July compared with the prior month to 5.39 million houses at an annual rate, which turned out the highest reading for almost four years. A growth to 5.15 million houses was forecasted. Sales growth is likely to reflect consumers activity jump who want to close transactions before mortgage rates rise higher. Mortgage rate growth in the nearest weeks threatens to slow down the recovery rates of the housing market which is the US economic growth engine this year.

The pound was traded upwards on Wednesday and updated August maximum again but had lost all the growth by the end of the day. Some support was provided by the CBI’s report. CBI Industrial Order Expectations anticipating industrial indicator reached zero level in August against -12 in July and improvement expectations to -8 points, which turned out the highest reading in 2 years. Industrial production grew to 25 in August – the highest reading since March, 2011 against 15 in July. Such growth indicates that economic recovery which has started this year is gathering pace.

The Australian dollar hit 2-week low on Wednesday Vs the US dollar amid the fall of Asian developing countries’ currencies and the leak at NPP Fukushima that was declared the accident of the third level of danger according to the International Nuclear Event Scale. The Canadian dollar fell to 6-year low Vs the US dollar amid commodity assets price decrease.

 

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Overview of the main economical events of the current day - 23/08/2013

Chinese and Euro-Zone PMI Is Growing

The US dollar had grown by the end of Thursday Vs most major currencies after the publication of July FOMC Meeting Minutes that showed that almost all Fed leaders were ready to start tapering off QE already in 2013 although the start terms were not clarified. Most of all the dollar rose against the yen, dropped against the Australian dollar and almost didn’t change against the euro amid the release of positive macrostatistics from China and euro-zone. Thursday US statistics data were also mainly positive despite some worsening of labour market data.

Unemployment Claims rose by 13 thousand last week up to 336 thousand while a smaller growth to 330 thousand was expected. Last week data were also revised for the worse by 3 thousand. However, an average number of claims for the past 4 weeks – the reading that smoothes volatility – dropped by 2.25 thousand to 330.5 thousand, the lowest reading since November, 2007.

The US Manufacturing PMI rose in August to its high for five months as employment and new orders growth accelerated. Flash Manufacturing PMI rose to 53.9 in August against the final July reading 53.7. Kansas City Fed Manufacturing PMI also grew as companies’ demand for labour is increasing for the first time in six months.

Kansas City Fed Manufacturing Activity Index rose in August to 8 from 6 in July – the highest reading since February, 2012. CB Leading Index rose by 0.6% in July having exceeded the forecast after zero changes prior month. FHFA House Price Index grew by 0.6% in June also having exceeded the forecast. FOMC Member Richard Fisher making speech on Thursday repeated that reducing bond purchasing should be started in September.

The euro was traded downwards but by the end of the day it almost hadn’t changed. Some support was provided by the euro-zone PMI which not just rose but also turned out much better than expected signaling that European economic recovery was gathering pace. Euro-zone Flash Composite PMI rose in August to 26-month high of 51.7 Vs 50.5 in July having exceeded the expectations of 50.9. Flash Manufacturing PMI of Germany reached 25-month high. Only French indicators turned out worse.

Euro-Zone Flash Composite PMI

The Australian dollar rose after the release of positive Chinese macrostatistics. HSBC Flash Manufacturing PMI, a key indicator of manufacturing PMI, grew to 50.1in August from 47.7 in July having exceeded the level of 50 points and having turned out significantly better than expected. The activity turned out the highest for the past four months after July fall to the lowest reading in 11 months, which indicates that the second world’s economy could maintain after 2-quarter decrease.

HSBC Flash Manufacturing PMI

The yen decreased significantly amid the stock indexes growth after the release of Chinese and euro-zone positive statistics. DJIA has grown for the first time after 6-day fall. The Canadian dollar weakened considerably on the back of a weak report on retail sales which dropped by 0.6% m/m in June having exceeded the expectations. Core Retail Sales fell by 0.8% compared with the prior month while no changes were expected.

 

[MasterForex Broker]

Overview of the main economical events of the current day - 26/08/2013

The Main Events of the Week

he US dollar lost on Friday all its weekly slight growth and fell after a weak New Home Sales report. In contrast to Existing Home Sales that showed the highest reading for almost 4 years – New Home Sales slumped unexpectedly in July by 13.7% in comparison with the prior month to 394 thousand houses at an annual rate. The sales have turned out the lowest since this January and showed the sharpest decline since May, 2010. The June reading was also considerably revised for the worse – from 497 to 455 thousand houses. FOMC member Bullard said on Friday that the Fed had no necessity to hurry with the reduction of the incentive program.

US New Home Sales

Sales decline in July amid mortgage interest rate rise may signal a pause in housing market recovery. An average rate on 30-year mortgage loan grew up to 4.58% per annum last week compared with the lowest level of 3.31% recorded in November, 2012. Meanwhile, consumer confidence in the euro-zone grew to the highest level in August for more than two years - up to -15.6 from -17.4 in July.

By the end of the week the dollar had grown a little less than 0.1% according the dollar index that shows its attitude towards the basket of six major currencies. The dollar has grown Vs most major currencies except the euro (-0.40%) and Swiss franc (-0.55%). The largest dollar’s growth was Vs New Zealand dollar (+3.46%), Australian dollar (+1.62%), Canadian dollar (+1.57%) and Japanese yen (+1.18%). The pound showed the smallest decline (-0.28%).

This week there will be a release of retail sales data, labor market and inflation data, confidence and sentiment indexes. Most data will be published on two last days of the week. In the euro-zone unemployment, inflation data and European Commission confidence indexes will be released on Friday. In Germany IFO Business Climate report will be released on Tuesday and GfK Consumer Climate – on Wednesday, labor market and inflation reports – on Thursday and retail sales – on Friday. In Italy retail sales will be released on Wednesday and unemployment and inflation reports – on Friday. Confidence and sentiment indexes are expected to grow which will become another sign that economic recovery in the second quarter is going on.

In the UK it is a day off on Monday and there won’t be a lot of data this week. The main event may become the Bank of England governor Mark Carney’s speech where he is expected to discuss a new strategy of the Bank of England on providing monetary policy Forward Guidance. On Wednesday CBI Realized Sales will be released, on Thursday - GfK Consumer Confidence and on Friday - Mortgage Approvals.

In Japan retail sales report will be published on Thursday and on Friday a large statistics block of the end of the month will be released: inflation, unemployment, industrial production. In New Zealand ANZ Business Confidence will be released on Thursday and Building Permits – on Friday. In Australia Private Capital Expenditure report will be released on Thursday and Private Sector Credit – on Friday. In Canada quarterly Current Account report will be released on Thursday and the GDP for June and for the second quarter – on Friday.

In the USA on Monday there will be a release of Durable Goods Orders data. On Tuesday - CB Consumer Confidence and S&P/Case-Shiller HPI. On Wednesday Pending Home Sales will be released. On Thursday – revised GDP for the second quarter. On Friday Personal Income and Spending report, Chicago PMI and Revised U. of Michigan Consumer Sentiment.

 

[MasterForex Broker]

Overview of the main economical events of the current day - 27/08/2013

US Durable Goods Orders Fell Unexpectedly

Trading at Forex on Monday was calm amid almost empty calendar and lack of any significant events on most major currencies. The dollar fell a little after the release of a weak Durable Goods Orders report but then recovered its losses. Durable Goods Orders in the USA slumped unexpectedly in July by 7.3% compared with the prior month to $226.6 bln while a drop only by 3.6% was expected.

US Durable Goods Orders

The decrease was mainly due to the fall of aircraft orders. Durable Goods Orders Ex Transportation dropped by 0.6% against the expected growth by 0.5%. Capital Goods Orders Non-Defense Ex Aircrafts – a key indicator of business investment – decreased by 3.3% in July compared with the prior month after previous 5-month growth. At the same time a less significant Dallas Fed Manufacturing Activity Index grew up to 5.0 in August against 4.4 in July while its drop was expected.

Jackson Hole Economic Symposium ended past weekend. This time it didn’t attract much attention as no governors of major central banks joined it. According to many experts at the summit, the desire of Fed leaders who were present at the meeting to finish asset purchasing the sooner the better was felt. The Fed seems to be still intended to reduce QE in September. Although September decrease is likely to be less than expected before – not $20 bln from current $85 bln a month but $10 bln.

The euro and the pound were traded at a narrow range and closed almost unchanged. There were no any statistics in Europe and it was a day-off in the UK. ECB board member and German Bundesbank President Jens Weidmann said on Monday that the ECB, in his opinion, wouldn’t keep interest rates at low for several years.

Weidmann again opposed buying bonds of problem euro-zone countries by the ECB having called it redistribution of risks of unsound budgetary policy to all euro-zone states. ECB President Mario Draghi announced a year ago that the ECB was prepared to buy unlimited quantities of government bonds of such countries on the secondary market – and it turned out enough to calm down financial markets.

New Zealand dollar had almost no reaction towards bad trade balance data and closed the day with a slight growth after 5-day decrease in a row. For the first time in six months trade balance has dropped below zero and has amounted to 774 million NZD. The exports grew by 4.8% at an annual rate while the imports rose by 17% - mainly due to aircraft and oil products imports increase. Standard & Poor's Ratings Services affirmed its AA long-term foreign currency rating on the country and said the rating outlook was stable.

 

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Overview of the main economical events of the current day - 28/08/2013

Escalating conflict around Syria led to the growth of defensive assets

Escalating conflict around Syria led to the growth of defensive assets such as the yen, franc and gold; and to escaping from risky currencies such as AUD, NZD and also currencies of developing countries. Daily decrease of the euro Vs the yen on Tuesday turned out the lowest for past eight weeks. The dollar also lost about 1.5% Vs yen having reached the lowest level against Japanese currency for seven days. Swiss franc took the second honorable place in Tuesday leaders rating.

U.S. Secretary of State, John Kerry said on Monday that there was an incontestable evidence of using chemical weapon by Syrian authorities against the rebels, which may serve a motive for military intervention into the country. According to some reports a military operation against Syria may start on Thursday already. The Pentagon has announced its readiness to the military operation in Syria.

The dollar fell on Tuesday against most major currencies except AUD and NZD having no reaction towards US Consumer Confidence growth while it was expected to drop. US Consumer Confidence rose up to 81.5 p. in August Vs 79 p. Consensus. Prior month reading was revised upwards from 80.3 p. to 81 p.

Richmond Fed Manufacturing Index also maintained to +14 in August Vs July reading -11, which has become the best result since April, 2012.

CB Consumer Confidence in the USA

The euro also ignored at first good business confidence statistics in Germany and decreased but then recovered that loss. IFO Business Climate grew to its high for 16 months – 107.5 p. while a growth to 107 p. was expected. The index has been growing for four months in a row. Current Assessment has risen to 112 p. from 110.1 p. in July. IFO Expectations also exceeded the forecast having grown to 103.3 p. against 102.4 p. prior month.

IFO Business Climate

 

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Overview of the main economical events of the current day - 29/08/2013

US Dollar Rose on Wednesday

The US dollar was traded upwards on Wednesday against most major currencies despite some decrease of housing market data. The dollar was in demand as a defensive asset amid rising geopolitical tensions in the Middle East and fears of military actions against Syria. According to some data the attacks on selected targets in Syria with cruise missiles can be made on the night of Thursday to Friday. U.S. Defense Secretary said earlier that the U.S. military is ready to act and waits for the president’s order. Meanwhile, the officials of Syria provided UN inspectors with the evidence of non-use of chemical weapons.

Pending Home Sales Index, a leading indicator at the real estate market, dropped in July for the second month in a row. According to the National Association of Realtors (NAR) - Pending Existing Home Sales Index fell by 1.3% compared with the prior month to 109.5 in July while a slight growth was expected. Continuing growth of rates on mortgage loans has a negative impact on housing market recovery. High prices and a low housing supply in some parts of the country also put pressure.

The euro was traded downwards amid some decrease of consumer sentiment in Germany. According to the GfK report a key Consumer Climate dropped to 6.9 p. in September Vs 7.0 p. in August. It was the first decrease in eight months after reaching more than 6-year high in August as households expect economic recovery to be slow in the nearest months. Retail sales in Italy also turned out a little worse than expected and dropped by 0.2% m/m in June against the expected growth by +0.1%.

The pound recovered almost all its losses of the day after the speech of the Bank of England governor Mark Carney which seemed to the market participants less inclined to soft monetary policy than it was expected. Carney said that there were signs of optimism on the back of a large-scale British economic recovery. He promised further measures on stimulating of the economy should be done if rising interest rates threaten its still weak recovery.

The Bank of England will soften requirements concerning the liquidity for banks. Besides, Carney marked that reaching 7% unemployment didn’t guarantee an automatic increase of interest rates – the Bank of England would also consider other factors. Retail sales growth data also supported the pound. CBI Realized Sales in August reached its high since November, 2012 at +27 Vs +17 in July having significantly exceeded the forecast of +20.

The Australian dollar updated more than 3-week low on Wednesday against the US dollar amid other Asian currencies decrease because of growing fears of soon attack on Syria. Besides, Construction Work Done in Australia fell by 0.3% in the second quarter against the expected growth by 1%.

 

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Overview of the main economical events of the current day - 30/08/2013

US GDP Growth Accelerated in the Second Quarter

The US dollar showed a significant growth on Thursday, the highest for almost 4 weeks according to the dollar index after the publication of strong US GDP data for the second quarter and weak German data. US Unemployment Claims decreased by 6 thousand last week to 331 thousand, which almost coincided with the expectations (332 thousand). It signals improvement at the US labor market.

According to the US Department of Commerce GDP Second Release for the second quarter was raised up to 2.5% at an annual rate against the initial release of 1.7%. The reading was expected to rise only to 2.2%. Growth rates acceleration was caused mainly by the upwards revision of exports and capital investments. Consumer spending was remained unchanged and public spending decreased more than estimated at first and remained the main source of pressure on economic growth.

The USA and Euro-Zone quarterly GDP growth rates

FOMC Member Jeffrey Lacker said on Thursday that the Fed jeopardized its independence using its balance to support certain industries. Labour market has improved significantly since the beginning of the last bond purchase round and it is a good argument to start reducing the purchase, he said.

The euro reached 2-week low on Thursday Vs the dollar amid a weak report on German labour market, which leveled the reports that showed improvement of French Business Confidence and Italian Consumer Confidence. Unemployment Change in Germany grew by 7 thousand in August against the expected decrease by 5 thousand. German annual inflation dropped for the first time in four months and accounted for 1.5% in August Vs 1.9% in July, which turned out lower than forecasted 1.7%.

The pound also weakened moderately but it was traded a little better than the euro. The Bank of England chairman Mark Carney said on Thursday that devaluation of the currency was not a way to prosperity. He added a fledgling recovery in the U.K. economy appears to have "some life".

The yen fell amid a weak retail sales report. Retail sales in Japan dropped by 1.8% in July compared with June, which exceeded the expected decrease by 1.3%. Also the yen decrease was influenced by some weakening of tensions around the situation in Syria after the US president Barack Obama had said that he hadn’t made a decision on Syria military attack yet and had no desire to involve the country into long-term conflict. The probability of the operation against Syria has slightly fallen recently as the UK and France expressed their desire to wait for the results of the UN expert examination. The experts’ opinion about using chemical weapon in Syria is expected to become known on Friday.

New Zealand dollar was traded downwards on Thursday despite Business Confidence data. ANZ Business Confidence fell slightly in August from July’s 14-year high but remained rather high as New Zealand economy continued showing strengthening signs. Australian dollar also dropped. HIA New Home Sales decreased for the first time in five months according to HIA data. Canadian dollar fell amid Canada’s current account deficit growth that widened in the second quarter to 14.6 billion Canadian dollars against 13.4 billion in the first quarter.

 

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Overview of the main economical events of the current day - 02/09/2013

The Main Events of the Week

The US dollar was traded slightly upwards on Friday against most major currencies amid mixed macrostatistics. Consumer Confidence data turned out better than expected, PMI coincided with the forecasts but Personal Income and Spending report turned out worse. Revised U. of Michigan Consumer Sentiment for August was reconsidered upwards up to 82.1 against preliminary estimates of 80 and the forecast of 80.5. However the index fell significantly in comparison with the revised July reading 85.1 which was the highest for 6 years.

Chicago PMI for August met the expectations and amounted to 53 compared with 52.3 in July. Personal Income growth rate in July slowed down more than expected from 0.3% to 0.1% (Consensus 0.2%); Personal Spending also increased only by 0.1% although a growth by 0.3% was expected. The situation with Syria is delayed and becomes more uncertain. President Obama said on Saturday that would ask the Congress to approve a military attack against Syria and that such operation could be held any time. The Congress is due to reconvene only in a week, 9 September.

By the end of the week the dollar had shown the highest growth for past 8 weeks, it had risen by 0.90% according to the dollar index. The dollar grew Vs all major currencies except the yen (-0.54%). The highest growth was shown against the Australian dollar (+1.37%), the euro (+1.22%), Swiss franc (+0.94%) and New Zealand dollar (+0.90%); less growth was shown Vs British pound (+0.47%) and Canadian dollar (+0.43%). By the end of the month the dollar’s growth had turned out less significant than even for the last week – it grew only by 0.47% according to the dollar index and showed growth against all major currencies except the pound.

This week as the first week of the month will be saturated with important events. There will be meetings of five major central banks of the world (Reserve Bank of Australia – on Tuesday, Bank of Canada – on Wednesday, Bank of Japan , Bank of England and ECB – on Thursday), there will be a release of PMI, GDP data, industrial output, retail sales, trade balance and labour market data. No changes of monetary policy from any central bank are expected but as always any surprises can be expected from the Central Bank of Australia. Besides, ECB Press Conference on Thursday will not be left without attention. The ECB is expected to reveal the details of its plans concerning easing of credit terms for small and medium-sized companies and also of a possible publication of ECB meeting minutes.

In the euro-zone there will be a release of manufacturing PMI on Monday and Service PMI – on Wednesday. Also the second estimate of the GDP growth (no changes are expected) and retail sales will be released on Wednesday. In Germany Factory Orders will be released on Thursday and industrial output and trade balance – on Friday. A decrease of both Factory Orders and industrial output is expected after a significant growth previous month which distorted the results a little.

In the UK during the first three days of the week Manufacturing, Construction and Service PMI will be published. A slight growth except service sector is expected. On Friday industrial output and trade balance data will be released. In Switzerland GDP for the second quarter will be released on Tuesday and inflation and industrial output data – on Friday. In Australia retail sales and current account will be released on Tuesday; GDP for the second quarter – on Wednesday and trade balance – on Thursday. In Canada trade balance will be released on Wednesday and labour market report – on Friday.

In the USA (and Canada) it is a Bank Holiday on Monday and some data (ADP, Crude Oil Inventories) will be released a day later. On Tuesday and Thursday respectively the most important ISM Manufacturing PMI and Non-Manufacturing PMI will be released. A decrease of indexes is expected after reaching many-month highs. On Tuesday Construction Spending will be published and on Wednesday – trade balance and Beige Book, on Thursday - ADP Employment Change and factory orders. And traditionally the first week of the month will be finished by the US Non-Farm Payrolls – it will be one of the last important reports which will be published before the Fed meeting 17-18 September and which will be used by the Fed for taking its decisions.

 

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Overview of the main economical events of the current day - 03/09/2013

UK Manufacturing PMI Has Grown

The pound grew on Monday after the release of manufacturing PMI. Manufacturing PMI in the UK rose in August up to 57.2 p. from 54.8 p. in July – to the highest reading for almost 2.5 years. A growth only to 55 p. was expected. Manufacturing PMI has been growing for seven months in a row in the UK. PMI growth can justify GDP growth rate acceleration in the third quarter.

It was a Bank Holiday on Monday in the USA and Canada. The dollar was traded differently – it weakened against the pound, AUD and NZD and partially rose against other major currencies having shown the highest growth against the yen. The yen weakened significantly amid the decrease of risks connected with Syria and stock indexes growth. US military action against Syria seems to be delayed. Past weekend Barack Obama said that he would ask the Congress to approve military actions against Damask. The uncertainty about the attack on Syria lowers the demand on defensive assets such as the yen and franc.

Swiss franc also followed the yen. The pressure was also put by the manufacturing PMI decrease. Manufacturing PMI in Switzerland dropped in August more than expected to 54.6 p. compared with 57.4 p. in July and against the forecast of 55.2 p. Besides, the head of the Swiss National Bank (SNB) Thomas Jordan said on Monday in the interview to Berner Zeitung that the Swiss franc was still overestimated and SNB would keep its limit for EURCHF as long as it would be necessary.

The euro had almost no reaction on manufacturing PMI growth in the euro-zone which exceeded the expectations and was traded slightly downwards. Euro-zone manufacturing PMI was revised up to 51.4 p. in August from the preliminary reading of 51.3 p. while no changes were expected. In July the index was 50.3 p. The index has been recording an increase for four months in a row and has reached the highest level since June, 2011. National indexes PMI grew in all euro-zone countries except France and Greece.

Australian dollar rose amid Chinese manufacturing PMI growth. Official manufacturing PMI in China released on Sunday grew to 51 p. against 50.3 p. in July having exceeded the forecasts. It may indicate that China’s economic growth rate in the third quarter can be a little higher than expected. HSBC Final Manufacturing PMI rocketed to 50.1 p. in August – the highest reading in 4 months. Besides, Building Approvals in Australia grew by 10.8% in July having exceeded the expectations 2.5 times.

 

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Overview of the main economical events of the current day - 04/09/2013

The Australian Dollar Grew After the Decision on Rate

The Australian dollar grew after the decision of the Reserve Bank of Australia to keep the rate unchanged at 2.50% despite weak retail sales and current account data. RBA rate statement was less mild than expected, which lowered the expectations that the central bank would continue further interest rate decrease. The central bank took a waiting attitude after eight decreases of the rate since 2011. RBA will continue estimating the outlook and correcting the policy necessary for a stable demand and inflation growth, - said RBA governor Glenn Stevens.

Retails sales in Australia grew only by 0.1% in July while its growth by 0.4% was expected. Current Account deficit rose by 7% in the second quarter up to 9.4 billion dollars, which exceeded the forecasted growth to -8.5 billion. Besides, prior quarter data were revised for the worse.

The US dollar was traded slightly upwards on Tuesday amid a positive report on US manufacturing PMI growth to its high since June, 2011. ISM Manufacturing PMI rose up to 55.7 p. in August from 55.4 p. prior month while its decrease to 54.0 p. was expected. New orders, inventories and prices grew while production and employment dropped. Another report of the US Department of Commerce showed that construction costs growth increased by 0.6% in July for a month having exceeded the expected growth by 0.4%.

ISM Manufacturing PMI and Euro-Zone Business Climate

The euro was traded slightly downwards on Tuesday continuing the decrease of prior days. Euro-zone producer price index has shown its moderate acceleration for two months in a row. Producer price index in the euro-zone rose by 0.3% in July Vs June against the forecasted growth by 0.1%. At the same time Spanish labour market data turned out a little worse than expected – unemployment rate didn’t change last month while its drop by 5.2 thousand was expected.

The pound grew after UK construction PMI report that showed its growth to the highest readings for almost six years but then it lost all the growth. Construction PMI rose to 59.1 p. in August from 57 p. in July while no changes were expected. Construction PMI growth is another sign that UK economic recovery accelerated in the third quarter.

The yen dropped to a month low Vs the dollar amid strong US data and Japanese stock market growth which rose on Tuesday according to Nikkei 225 by 3%. However, the yen was rising shortly on Tuesday after the incident that reminded that the military operation against Syria was just delayed. Some mass media reported on Israel's ballistic missile tests in the Mediterranean. Meanwhile, both parties leaders in the US Congress supported on Tuesday a military attack on Syria. Earlier the president was supported by John Boehner, Speaker of the US House of Representatives.

 

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Overview of the main economical events of the current day - 05/09/2013

UK Services PMI Reached Almost 7-Year High

The US dollar was traded downwards on Wednesday against most major currencies (except the yen) after 5-day growth in a row according to the dollar index amid weak statistic on trade balance and manufacturing PMI in the region of New York. Most of all commodity currencies grew against the dollar. According to the US Department of Commerce US trade balance deficit grew by 13.3% in July – to $39.1 billion having exceeded the expectations. Deficit growth in July was the most significant since January 2011.

Trade Balance of the USA and Canada

The exports dropped in July by 0.6%, while the imports rose by 1.6% mainly due to the oil and automobile imports increase. ISM New York Index dropped to 60.5 in August against 67.8 prior month. IBD/TIPP Economic Optimism grew to 46 in September from 45.1 in August, which met the forecasts. FOMC Member John Williams making speech on Wednesday said that despite bond purchase tapering off, the policy would be still very mild.

The Australian dollar showed the highest growth Vs the dollar among all currencies after the GDP data for the second quarter that turned out a little better than expected. Australian GDP in the second quarter rose by 0.6% compared with the prior quarter, which exceeded the expected growth by 0.5%. At an annual rate the economy has risen by 2.6% Vs Consensus 2.5%. Consumer spending grew by 0.4% last quarter, saving rate increased to 10.8% from 10.5%. The AUD was also supported by Chinese Services PMI growth - HSBC Services PMI reached 5-month high in August and rose to 52.8 against 51.3 in July.

Quarterly GDP growth of Australia and the USA

The Canadian dollar rose amid the Bank of Canada meeting finished on Wednesday where the key interest rate was left unchanged and it was repeated that the current monetary policy was still appropriate as there were no any expected changes of demand from the exports and investment yet. GDP growth met the forecast of the Bank of Canada, inflation was still moderate and the exports and investment should grow. The CAD ignored trade balance deficit growth data of Canada in July that rose to 0.93 billion Canadian dollars against 0.46 billion prior month.

The pound reached almost 2-week high Vs the dollar after the release of Services PMI which grew to the highest readings since December, 2006. Services PMI rose to 60.5 in August from 60.2 while it was expected to fall. Service sector accounts for 75% of all the UK economy. The index has been growing for eight months in a row. August growth was mainly due to new orders increase. The data justifies the strengthening of British economic recovery rates in the third quarter.

The euro rose after the publication of revised GDP for the second quarter despite Services PMI and retail sales data that fell short of expectations. Euro-Zone Revised GDP coincided with the preliminary estimate +0.3% - but an annual rate GDP fell slightly less that the initial estimates: by 0.5% not 0.7%. Retail sales rose only by 0.1% m/m in July against the forecast of +0.4%. The Final Services PMI in the euro-zone was lowered to 50.7 against the preliminary estimate of 51 – however, the index is still at 2-year high.