The US dollar had a blockbuster week, breaking ground against all currencies apart from from the other safe haven: the yen, as euro-zone issues became more severe. In addition to the ongoing troubles in the euro-zone, US housing data, Japan’s rate decision and US unemployment claims are the major events on out list this week. Here is an outlook on the main market-movers.
Greece is facing new elections in June. Even if a pro-bailout government is elected, the situation there looks bad and talks of a bank run could be a self fulfilling prophecy.
The situation in Greece and in Spain has a huge impact on all the
world. In the US, things remain OK, with jobless claims unchanged at
370,000 claims, although retail sales figures disappointed with a lower
than anticipated increase. Worries about the Chinese economy rise
again. G-8 leaders are meeting in Camp David. Will they announce some
kind of coordinated effort to boost the global economy?
- UK Inflation data: Tuesday, 8:30. UK CPI continues to drift further away from the BoE benchmark target
of 2%, rising to 3.5% in March compared to 3.4% in February. The main
causes for this rise were higher food and energy prices. The recent
increase was in line with predictions. A drop to 3.1% is expected now.
- US Existing Home Sales: Tuesday, 14:00. Existing
home sales disappoint in March with 4.48 million units following 4.60
million in February while economists expected an increase to 4.62
million. The unsteady job market and tight credit conditions could
explain the recent slowdown in the housing industry. An increase to
4.64 million is expected now
- Japanese rate decision: Wednesday. The BOJ board
members decided to extend their asset purchase program by an additional
¥5 trillion ($61.9 billion), in line with expectations and voted to
hold overnight rate at 0-0.1%. The BOJ commented that the EU debt
crisis effect on international markets has subsided and believes
Japanese economy will return to moderate growth once the pace of
recovery in foreign economies picks up. The rate is expected to be
maintained.
- Canadian retail sales: Wednesday, 12:30. An
unexpected drop in car sales during February, led to a disappointing
0.2% drop inCanada’s retail sales following 0.2% gain in the previous
month while economists expected 0.1% gain. Meantime Core sales
excluding the auto sector increased 0.5% compared to a 0.8% fall in
January. Nevertheless, retail sales will contribute to GDP growth. Core
sales is predicted to rise 0.6%, while retail sales is anticipated to
rise 0.4%.
- US New Home Sales: Wednesday, 14:00. Sales of new
homes slowed less than predicted in March, to 328,000 from353,000 in
February. But the overall figures suggest the housing market is on a
modest recovery path with a lower inventory of new homes for sale. A
small rise to 335K is anticipated this time.
- German Ifo Business Climate: Thursday, 8:00.
German business sentiment improved moderately in April, reaching 109.9
after109.8 in the previous month indicating a more optimistic view on
current economic situation. But the fresh ZEW figure was a disappointment.
ZEW President Wolfgang Franz noted that Germany faces downside risks
from its trading partners, from higher prices of crude materials and
the EU debt crisis. Business Climate is predicted to decline to 109.5.
- UK Revised GDP: Thursday,
8:30.The first release of British GDP showed a that the UK is in
recession – a second consecutive quarterly decline. The contraction of
0.2% will likely be confirmed now, adding pressure on sterling after
the dovish words of BOE Governor Mervyn King.
- US Durable Goods Orders: Thursday, 12:30. Durable
orders softened unexpectedly in March dropping 1.1% from a 1.9% gain in
the previous month. This drop was much worse than the 0.6% rise
predicted by analysts. Nonetheless durable orders are notoriously
volatile and cannot indicate a substantial trend. An increase of 1.2%
is predicted now.
- US Unemployment claims: Thursday, 12:30. The number of Americans seeking unemployment benefits remained unchanged last week at 370,000, indicating a rebound in the job market. The decline suggests better hiring in May following a decline in the previous two months. A small rise to 374,000 is predicted now.
*All times are GMT.
Source: Forexcrunch
0 comments:
Post a Comment