jobs report Posts on Forex Blog
Forex Preview August 3 - August 8
Aug 3, 2008
The core theme of the week will be rate decisions from 4 central banks and attached commentary.
Australia and US bank rates are declared on Tuesday.
On Thursday, banks in Great Britain and the Eurozone announce rate decisions.
All 4 banks are expected to remain on hold. The real market movement will come from associated statements
- The Reserve Bank of Australia (RBA) is apt to remain confident in economic growth and focus on inflationary concerns.
- the US FOMC is likely to focus on a struggling economy with inflation a secondary concern that can be dealt with later
- The Bank of England will presumably highlight a faltering economy, indicating rate cuts may be needed sooner rather than later. If their is one bank that surprises with rate movement this week, the BOE will be it with a rate cut.
- The ECB can be a wild card. Inflation remains double their mandate target. Yet, signs of a Eurozone slowdown are spreading like wildfire. With oil pulling back, their is reason to believe Trichet is going to stress a wait and see approach. However, hawkish comments on inflationary concerns remain a possibility.
Aside from the central bank action, markets are also likely to move on unemployment reports out of New Zealand on Wednesday, and Switzerland, Canada on Friday. The New Zealand report is the only significant data coming out on Wednesday, and as such may gain unusual attention.
Three other events to watch for are:
- the US PCE on Monday (I think their is potential for upside surprise).
- Eurozone Retail Sales and US ISM Services ahead of the FOMC rate decision on Tuesday
Sunday August 3
9:30pm Australia House Price Index (expect -1.3% QoQ, 8% YoY)
11pm New Zealand Commodity Price Index
Monday August 4
5am Eurozone PPI (expect 0.8% MoM, 7.9% YoY)
8:30am United States Personal Consumption Expenditure (expect 0.4% MoM, 2.2% YoY)
Tuesday August 5
12:30am Reserve Bank of Australia Rate Decision (expect hold at 7.25%)
4:30am Great Britain Industrial Production (expect 01% MoM, -1.2% YoY)
5am Eurozone Retail Sales (expect -0.6% MoM, -1.3% YoY)
10am ISM Services (expect 51.0 from 48.2, signaling growth)
2:15pm United States Fed Rate Decision (expect hold at 2%)
7pm Great Britain Consumer Confidence
Wednesday August 6
10:35am United States Crude Inventories
6:45pm New Zealand Employment Report (expect 0.2% QoQ, -0.6% YoY)
6:45pm New Zealand Unemployment Rate (expect 3.8%)
Thursday August 7
2am German Trade Balance (expect €15.5 billion)
2:45am French Trade Balance (expect €-4.6 billion)
7am Great Britain Rate Decision (expect hold at 5%)
7:45am European Central Bank Rate Decision
8:30am ECB President Trichet Press Conference
10am US Pending Home Sales (expect -1.3%)
Friday August 8
1:45am Switzerland Unemployment Rate (expect 2.3%)
4am Italy GDP (expect 0.0% QoQ, 0.3% YoY)
7am Canada Unemployment Rate (expect 6.2%)
Bank of England, ECB, European Central Bank, BOE, jobs report, RBA, upcoming reports, Fed, FOMC
Euro, US Numbers In Line
Jul 31, 2008
Key economic indicators out of Europe and the US this morning fell within range of expectations.
At 5am, Eurozone CPI registered 4.1% as expected. While that is 2% better than the ECB mandate of 2% CPI, chances for an ECB rate hike next month appear slim. Deteriorating economic conditions across much of Europe has led the bank to conclude demand will naturally fall off and thus curb price pressures.
This view was further bolstered by a slight up tick in Eurozone unemployment (7.3% vs expected 7.2%) and German employment losses (down 20k jobs).
In the US, Q@ GDP came in an initial reading of 1.9%. However, the big news was a downward revision in 2007 Q4 from 0.6% to -0.2%. Q1 2008 GDP was also revised lower from 1.0% to 0.9%.
The combined events initially sent the EURUSD above 1.56. However, the pair has declined below 1.56 ahead of the Non farm Payroll Report.
Euro, GDP, CPI, jobs report, USD
EURUSD Preview
Jul 30, 2008
The EURUSSD pair could see significant action the next 2 days.
To recap, the pair remains in a 5 month range of 1.53 - 1.60. In early July, as the Indy Mac collapse and fears over Fannie Mae and Freddie Mac swept through markets, the pair briefly went above 1.60.
In the last 2 weeks, as various levels of the US government moved to shore up banking, and oil has decline some 15%, the greenback has recovered.
Today, despite a 3% rise in crude oil futures, US stocks and the Dollar remained strong. The Dollar came within 66 pips of the the very important 1.55 support. Since April, every trend that has passed through 1.55 has been sustained for no less than 2 weeks.
As the week ends, the EURUSD pair can move on 3 key events.
Thursday
At 5am eastern Eurozone CPI and unemployment will be released.
On CPI, the number is likely to come in as expected (4.1%), as German CPI came in as expected Tuesday. Given recent drops in consumer confidence and growing signs of a slowdown spreading across Europe, the CPI would have to come in sharply higher to justify any speculation of a further ECB rate hike.
The monthly decline in French employment may signal some weakness in the unemployment. Though, any miss is likely to be very narrow at this stage.
At 8:30 am, US Q2 Annualized GDP will be released
Expectations are all over the map on this one. I have seen calls from 1.0% to 4%. Given the impact of stimulus checks and a jobs number that has stubbornly held below 5.8%, annualized 2% or better seems likely.
Tomorrow seems to hold 3 scenarios (Note: I have listed them in the order I think most likely to occur)
- If numbers come in as expected, look for the pair to hover around 1.55 as traders wait for the Non Farm payroll report Friday.
- If US GDP comes in over 2% and Eurozone CPI reads 4.1% or lower, look for the US Dollar to break the 1.55 support.
- Should Eurozone CPI come in extremely hot (4.3% or more) and the US GDP disappoint, look for the Euro to push up to 1.57 resistance.
Friday
At 8:30am US Nonfarm payrolls and Unemployment Rate will be released
While the ADP report can be widely inaccurate, last month, the number was foretelling (coming in at -79k vs -74k in the NFP). Today, the ADP came in at +9k, suggesting the NFP will beat expectations. With initial claims dipping below 400k, and the 4 week average declining, their is definitely room for optimism. Right now, markets expect a reading of -75k.
Should the NFP beat expectations, it will definitely be dollar bullish and expectations for a Fed hike in late 2008 are likely to increase.
At this point, I do think the EURUSD is likely to close below 1.55 this week.
Euro, GDP, CPI, jobs report, EUR, USD
Forex Preview July 27 - Aug 1
Jul 27, 2008
Save for a whirlwind of activity on Tuesday, this week is largely devoid of major macroeconomic reports.
The key macroeconomic themes will once again be
a) European CPI (Germany, Italy, the Eurozone, and Switzerland)
b) US Nonfarm payrolls Friday
With oil falling 15% over the last 3 weeks, European CPI and may come in as expected. A slight stunner considering the recent series of higher than expected readings.
Monday July 28
7:30pm Japan Household Spending
7:50pm Japan Retail Sales and Trade
Tuesday July 29
Germany CPI (expect 0.5% MoM, 3.2% YoY)
2:40am France Consumer Confidence (expect -47)
2:45am France PPI (expect 0.8% MoM, 7.3% YoY)
4am UBS Switzerland Consumption Indicator
8am Germany IFO Business Climate Survey
9am US Case Shiller Home Price Index
10am US Consumer Confidence (expect 50)
7:50pm Japan Industrial Production
11pm German Retail Sales
Wednesday July 30
4am Italy PPI (expect 0.9% MoM, 8.2% YoY)
5am Eurozone Consumer Confidence (expect -18)
9:30pm Australia Trade Balance (expect a drastic shrinking from -965 million to -100 million)
9:30pm Australia Retail Sales
Thursday July 31
1:45am Swiss CPI (expect -0.4% MoM, 4.0% YoY)
5am Italy CPI (expect 0.4% MoM, 4.0% YoY)
5am Eurozone CPI Estimate (expect 4.1%)
5am Eurozone Unemployment (expect 7.2%)
8:30am US Q2 GDP (expect annualized 2.0%)
8:30am Personal Consumption (expect 1.4%, core 2.0%)
Friday August 1
2:30 am Australia RBA Commodity Index
8:30am US Nonfarm Payrolls (expect -75k)
8:30am US Unemployment Rate (expect 5.6%)
10am US ISM (expect 49.2 Manufacturing)
1pm Italy Government Budget
CPI, jobs report, AUD, EUR
Vol a til i ty
Jul 2, 2008
Volatility - tending to fluctuate sharply and regularly.
And that is just what we can expect tomorrow around 5:30am. To make things more exciting, several events throughout the day could could cause reversal.
5:30am est - Europe
European Central Bank President Trichet will likely hold his monthly press conference shortly before or after 5:30am. Markets have already priced in a 25bps hike from the ECB. This event is likely to go 1 of 3 ways
1. ECB raises 25bps, Trichet leaves door open for hikes at the end of the year
2. ECB raises 25bps, Trichet hints at another hike soon, but discounts the notion of a series of hikes
3. ECB raises rates 50bps on expectations of an energy / fx market intervention at the G8 summit July 7 - 9
A host of pressures are certainly on Trichet's shoulders - German unemployment is at a 14 year low, Italian wages are growing, and Slovakian integration on the horizon - the pressure is on..
5:30am est - US
US releases 7 reports - chiefly Non Farm Payrolls (NFP), the unemployment rate, change in manufacturing payrolls, and hourly earnings.
Non Farm payroll Report
ADP, the largest US payroll processor, released a sharply lower number of -79k today. This was vs estimates of -20k. And, they revised May numbers down to +25k from +40k.
While the ADP can be grossly inaccurate, the numbers are backed up the drop in ISM manufacturing released yesterday. According to the ISM, the manufacturing employment reading came in at 43.7. That is the lowest level since May 2003, when the reading came in at 42.4.
With this series of bad numbers, it is unlikely that the NFP comes in near market expectations of -55k. I am now looking for a reading closer to -90k.
Last month, the NFP came beat expectations, but the unemployment rate jumped to 5.5%, sending the Greenback down. It is hard to tell where this number will come in, but I again expect it to be to the downside at 5.7%.
10am - US
The ISM will release their service sector report. While this won't save the Dollar if it has been slammed all morning, it will offer traders to rationalize some consolidation if the EURUSD has skyrocketed.
11am - US
Markets close for holiday.
The best pair to trade tomorrow will likely be the EURJPY.
The muddle of US and ECB data can prove to be too confusing. And while the USDJPY is poised for some upside potential technically, a negative jobs report will undo any of the short term momentum.
The EURJPY on the other hand, while likely be focused strictly on the ECB rate hike.
ECB, jobs report, EUR, Trichet, rate hike, USD
Forex Events for June 29 - July 5
Jun 29, 2008
This could be the week the Euro breaks 1.60. A score of data out of Europe, the Thursday's rate decision, and US Non Farm Payrolls could give it the final push.
A list of the forex events likely to move markets this week.
All times listed in eastern standard time.
MoM = month over month
YoY = Year over Year
Monday June 30
4am Eurozone May PPI (expect 0.9% MoM, 6.8% YoY)
4:30am Great Britain May Mortgage Approvals (expect 51k)
5am June Eurozone CPI (expect 3.9% YoY)
5am Italy CPI
Tuesday July 1
12:30am RBA Rate Decision (expect hold w/hawkish statement)
10am US June ISM (expect 49.0)
Wednesday July 2
9:30pm Australian Trade Balance (expect -950 million)
Thursday July 3
1:45am Swiss CPI (expect 0.3% MoM, 3.1% YoY)
7am Bank of England Rates Decision (expect hold)
7:45am ECB Rates Decision (expect 25bps hike, watch commentary)
8:30am US June Non Farm Payrolls (expect -55k)
Friday
US markets closed for holiday
ECB, Euro, interest rates, trade balance, jobs report, RBA, rate hike, upcoming reports
FX News Under the Radar
Jun 21, 2008
Some FX news you might have missed Friday.
1. IMF upgrades US growth to 2% for 2009.
The International Monetary Fund (IMF) increased forecasts for US 2009 GDP growth to 2%. According to the IMF, The US downturn has been mitigated by well-timed fiscal stimulus, strong export growth, and healthy corporate balance sheets. However, the IMF warned of downside risks from "strains on household and bank finances, and now also by higher commodity prices."
Read the full release at the IMF
2. California Unemployment Hits 6.8%
California, hard hit by the housing crisis, hit a 2008 low in unemployment. Joblessness rose 0.6% month-over-month and was a full 1.5% higher than May 2007. The total number of unemployed came in at 1.26 million, up 300k year over year.
With the state facing a $15.2 billion deficit, things are bound to get worse. Among other proposals for a deficit fix has been an increase in already high state income taxes. Califonria's rate of 9.3% comes in 2nd only to Vermont. Higher state taxes could impose a major drag on a key component of the US economy.
3. India inflation hits 11%
India's wholesale inflation rose to 11% Year over Year. This is far higher than last week's reading of 8.75%. Unlike many other countries, India tracks inflation by tracking the wholesale price of 435 goods.
India is facing a very difficult period, as they have had to cut fuel subsidies by 10% and and just last week the central bank increased short-term borrowing rates from 7.75% to 8%.
The Sensex exchange is down 30% this year since peaking at 21,206.80 in January. The index closed at 14,571.29 Friday.
IMF, India, inflation, GDP, jobs report
Aussie Dollar Falls on Unemployment Rpt
Jun 11, 2008
The June labor force report from the Australian Bureau of Statistics (ABS) showed an unexpected increase in unemployment. April was revised higher to 4.3%, while May held steady at 4.3%. Specifically, the total number of people employed fell 19,700.
Expectations had been for a drop in unemployment to 4.2% with an increase in jobs by 13,500. Subtracting the real drop vs expected growth reveals a 33,200 swing in jobs. This is the first decrease in employment since October 2006. The loss was evenly split between full-time (- 53% 10,400) and part-time (-47% 9,300).
10.69 million people remain in employment.
Combined with yesterday's fall in Australian consumer confidence (-5.7%), the chances for a rate hike seem remote. Some economists now see rate cuts starting in 2009.
In early hours of the Asian session, the Aussie has fallen against most of the majors. The AUDUSD fell to a new multi week low as the currency traded from A$0.9406 down to A$0.93920.
Other forex trades: AUDCAD A$0.95810 (-0.13%), AUDJPY A$100.66 (-0.09%), EURAUD €1.6485 (+0.04%).
jobs report, AUD, Aussie
Whoa - Unemployment Jumps to 5.5%
Jun 6, 2008
US Job Cuts came in at -49k, well below expectations for a 60k loss. However, traders are reacting to a headline reading of a 0.4% jump in unemployment. June is typically a difficult month - as college and high school age employees try to enter the work force.
In detail, construction lost 34k, manufacturing lost 26k, and services lost 39k, health and education gained 54k.
Hourly wages rose to 3.5%, beating expectations.
The greenback is weaker against the majors. EURUSD up 0.57% to 1.5669, GBPUSD up 0.15% to 1.9613, and USDJPY down 0.30% to 105.800.
jobs report, USD
US Non Farm Payroll Preview
Jun 5, 2008
Markets are expecting a loss of 60k jobs in tomorrow's Non Farm Payroll (NFP) report.
The DailyFX has a nice preview of the report. In general, they take a fairly negative view and hint that a 100k drop is not out of the question. Specifically, they highlight that each of the previous 3 recessions has seen jobs drop for 10 months or more. Further, previous recessions have seen monthly job losses spike above 300k. They reveal 10 indicators they are using to predict a number above expectations.
While I agree with their overall thesis, I do think they are jumping the gun.
1. Fed Comments - The Fed has made a number of comments indicating the economy may avoid a severe slowdown. It started last week with comments from Dallas Fed President Fisher and Fed Governor Mishkin's resignation. It continued this week with back-to-back days of comments from Chairman Ben Bernanke.
And today, in comments that may have flown a little under the radar with the RNBZ and ECB statements over the last 24 hours, Richmond Fed President Lacker reiterated that the US may avoid a severe slowdown and that inflation is becoming the main concern.
2. Macro reports this week - The ISM Non manufacturing, ADP, and Initial Jobless Claims all improved. Individually, each of those measures may be unreliable, but taken as a trio they can not be easily dismissed.
I believe economists may be missing a crucial factor in this slowdown - illegal immigration. Job losses are highest in construction and manufacturing. Those are 2 industries that have extensively tapped into the illegal immigrant labor pool. As jobs dry up, they will likely return to their native countries and never show up on job loss reports.
3. Foreclosures are becoming confined to 6 states. The six can broken into 2 groups - those with over development and risky loans (California, Florida, Arizona, and Nevada) and those suffering from job losses (Michigan and Ohio). Beyond those states, housing markets have begun to stabilize. While those states are big enough to remain a concern for the overall health of the US economy, it is important to realize that 44 other states are getting better.
I recommend you read the DailyFX NFP preview
This has been an eventful week in the forex markets - comments from central banks and jobs reports have seen sharp moves in the GBPUSD (200 point swing Monday), the EURUSD (2 big point swings this week - one uip, one down), and the Kiwi (down big against many currencies yesterday).
If you've ever felt you could be better at trading forex around economic news releases, this Elliot Wave Report is a must-read.
jobs report, housing, Fed, USD
Signs of USD Rebound Over the Next Few Months Continue to Mount
Jun 5, 2008
Fed comments, improvements in services, ADP Jobs, and more Asian Oil subsidies may signal a fundamental rally in the greenback.
For the second day in a row, Fed head Ben Bernake took a hawkish stance on inflation. He indicated that long term indicators of inflation were of "significant concern" This is the 3rd time in a week (President Fisher last week) that a Fed member has made comments focusing on inflation. With Mishkin on the outs in August, the chance of a US rate hike this fall looks positive.
In addition, the US economy continues to skirt inflation. The service sector accounts for around 80% of American jobs. Well, today the ISM non-manufacturing reported a reading of 51.7, 0.7 higher than forecast. It represented a minor dip from the April reading of 52. A number above 50 represents growth.
Also, ADP numbers for private employment showed 40k new jobs, 70k over expectations. However, that ADP number needs to be taken with a grain of salt. The number has been wrong by an average of 104k since November. Q1 productivity also beat expectations slightly, with a 2.6% reading vs a forecast 2.5%. By comparison, 2007 Q1 productivity was up 1.8%.
Meanwhile, numbers in the UK and Europe continue to sour. Eurozone retail sales fell -0.6 vs an expected gain of 0.2%. And services seemed to contract for both the UK and the Europeans. The UK slipped into contraction with a PMI service reading of 49.8 vs a forecast of 50.5. The Eurozone PMI service number came in at 50.6 vs an expected flat reading of 51.1.
As expected by many traders, Asian countries have begun cutting subsidies. Indeed, Malaysia announced a whopping 40% raise in gas prices, and 67% rise in diesel prices! Malaysian consumers of gas will now pay $3.30 a gallon of gas (vs $2.32) and $3.04 for a gallon of diesel (vs $1.22). Malaysia - a net exporter of oil - becomes the 5th major Asian country to cut subsidies. Indonesia (raised prices 28.7% in late May), Taiwan (ended all price controls effective June 1), India (raised prices 11% this week), and Sri Lanka (raised prices 25%) have already acted on the skyrocketing cost of oil. It should also be noted that Egypt, the most populous Arab country, raised prices 40%.
As an aside, Chuck thinks many governments and traders underestimated the impact of Cyclone Nargis and the China earthquake. The two mega-disasters created a sudden need for diesel fuel to power generators. Economic historians will eventually recognize that disasters and ambitious speculation was the reason oil reached $135. July futures fell to $122.30 today.
The EURUSD traded in a 50 point range over 1.5425. The greenback is up 4% vs the Euro since the all time high of $1.6019 in late April.
Greenback, jobs report, Bernanke, oil, Fed
FX Calendar: June 2 - June 6
Jun 1, 2008
After a couple weeks of see-saw data from the Eurozone and US, the FX market is looking for a definitive direction this week. US Reports will likely dominate Forex headlines. US Employment numbers on Wednesday (ADP) and Friday (Non Farm payrolls) have the potential to be major movers.
The European Central bank and Bank of England announce rates Thursday. Both are expected to remain flat.
Monday June 2
4:30am est - UK Mortgage Approvals (expect 65k, +1k)
10:00am est - US ISM Manufacturing (expect 48.5, -0.1)
Tuesday June 3
5:00am est - Eurozone MoM PPI (expect 6.1%, +0.4%)
7:01pm est - UK Consumer Confidence (expect 67, -3)
7:15pm est - Japan Capital Spending (expect -9.8%, -2.1)
Wednesday June 4
4:00am est - Eurozone Composite PMI (expect flat at 51.1)
5:00am est - Eurozone Retail Sales (expect 0.2%, +0.6%)
6:00am est - UK PMI Services (expect 50.5%, +0.1%)
8:15am est - US ADP Employment Change (expect -30k, -40k)
10:00am est - ISM Non-Manufacturing Composite (expect 51, -1)
Thursday June 5
7:00am est - BOE Rates (expect unchanged at 5%)
7:45am est - ECB Rates (expect unchanged at 4%)
Friday June 6
8:30am est - Non Farm payroll (expect -51k, -71k)
8:30am est - Unemployment Rate (expect 5.1%, -0.1%)
Bank of England, ECB, PPI, interest rates, jobs report, ISM, housing, upcoming reports, consumer confidence
EUR Slips to $1.5547 on German Unemployment, US GDP
May 29, 2008
Perhaps the table has turned..
Last week it was the Euro looking like it had a bright future on expectations for a ECB rate hike.
The last 2 days,.a string of positives has put the greenback on a positive footing.
In the latest headlines, German unemployment rose by an unexpected 4k applicants. Expectations had been for a 25k drop. Adding to that, Eurozone consumer confidence fell to a 32 month low of -15. Expectations had been for a stable reading of -12. However, it would be a mistake to miss why the ez confidence number fell. It appears the main driver was a rise in consumer prices across the Euorzone, which rose 3.3%. This is consistent with the inflation rate of 3% reported by Germany yesterday.
On a more positive note, Eurozone Retail PMI rose to 53.1 from a reading of 41.8 in April. This is the largest year-over-year increase in 13 months. Sales rose in Germany and France, but fell in Italy.
Back here in the States, US Q1 GDP was revised up from 0.6% to 0.9%. The revision was largely driven by exports, as the annualized trade deficit fell to $480.2 billion. That is the smallest since 2002. In addition, Dallas Fed President Fisher and Minneapolis President Gary Stern came out with warnings on inflation. You can, and should, read their comments at CNBC.
In other news, Japanese retail sales fell to 0.1%, far below expectations for an 0.6% reading.
The EURUSD has fallen to $1.5533 in early hours on the West Coast. It may test the $1.550 resistance depending on comments later today from Fed Chairman Bernanke (2:30 est) and Vice Chairman Kohn (7pm est). The greenback has climbed to ¥105.164 yen, well above the 10 day moving average.
Greenback, Euro, GDP, jobs report, EUR, USD
A Bundle of US Data This Week May Move Dollar Trades
May 27, 2008
The US will see a number of potentially trade driving reports in this holiday shortened week.
On Tuesday May 27
The S&P Case-Shiller Index at 9am est.
At 10am, New Home Sales and consumer confidence will be reported.
Wednesday May 28
Durable goods will be reported at 8:30am est, before equity markets open.
Thursday May 29
Revised Q1 GDP and weekly jobless claims are reported at 8:30am est.
Also, Fed Chief Ben Bernanke speaks at 2:30pm in Basel Switzerland. And Fed Vice Chairman Kohn talks at 7pm.
On Friday May 30
Consumer sentiment will be reported at 10am est
Other notable forex movers will be the German Unemployment numbers May 29 and Canada's Q1 GDP.
In light volume May 26, the EURUSD held above the $1.5750 support. Given the upbeat comments from the Germans last week, and the negative mood from the US Fed, this week's data has the potential for sending the EURUSD above the $1.58 resistance - we shall see.
GDP, jobs report, housing, Bernanke, upcoming reports, consumer confidence, Fed
Dollar bounces back on Oil, Jobs, and Bill Gross.
May 22, 2008
The dollar was up against most world currencies today as signs of recovery keep peaking out from the trough of bad news. After hitting $135 in overnight trading, oil slipped to $130.81. Phil Flynn, the famous energy trader, has an excellent article at OnTheBid suggesting the oil bull run may be over. In addition, jobless claims dropped to the lowest in 4 weeks.
Further fueling beliefs that the Fed may now battle inflation, PIMCO Chief Investment Officer Bill Gross came out with strong arguments for battling inflation. He asked others to join him "in lobbying for change in US leadership...and the market's assumption of low relative US inflation in comparison to our global competitors." PIMCO runs the world's largest bond fund.
Now the bad news. The oil spikes of 73, 79, and 90 all led to quarterly contractions. Crude prices have risen 35% since April! Yeah, thats a spike. While the Us has so far avoided outright contraction, the bull run in crude is sure to be felt. In addition, according to OFHEO, house prices fell 3.1% in Q1 2008 YoY, and 1.7% since Q4 2007
The National Association of Realtors will release April existing home sales at 10:00am est tomorrow. The expected number is 4.85 million, the lowest since the number started tracking in 1999. (I wonder how times the existing home sales figure was cited by realtors during the run up? 'Existing home sales are at an all time high! Get in ow or forever be priced out!' Blah). President Bush will speak a short time later at 10:35 est, so don't run away from your TV after the NAR report.
jobs report, housing, oil, USD
Euro, Swiss Franc, and Pound Move on Latest News
May 21, 2008
The latest round of news from Europe was generally positive for their major currencies.
First, on the heels of the ZEW President Franz's prediction of an ECB rate hike, the IFO business confidence survey was up in 3 categories - business climate, expectations, and current assessment. With that extra kick of good news, the Euro crossed the 1.570 mark, and is at 1.5768 in late trading. Having broken the $1.53 - $1.56 range, the Euro is almost defintely going to test the $1.60 level.
The Swiss also posted their share of good news, with a drop in unemployment. FX traders frequently turn to the Swiss franc when exiting carry trades, the continued global stock sell off may have been a more important macro driver today.
The minutes from the Bank of England showed that only one of nine members voted for a 25 bp rate cut on may 8. With March inflation at 0.8% and annual numbers hovering around 3%, the BOE seems to be handcuffed to a policy of rate cut aversion. However, it should be noted, that Ernst and Young Item Club member Peter Spencer has warned that inflation targeting may cripple consumers. Mr. Spencer suggests that the BOE switch to a core number that excludes energy and food (similar to the US). The Pound is at $1.9707 and may soon $2.00 again.
Bank of England, BOE, jobs report, Franc, EUR, minutes, rate hike
Weak Manufacturing Data, Jobs Sends US Dollar Down Against Commodity Currencies.
May 15, 2008
US Manufacturin data continue to show signs of contraction on Thursday. The Empire Manufacturing index and the Philly Fed showed signs of contraction for a 6th month. The Empire Manufacturing reading came in at -3.2, down from 0.6. The Philly Fed did show some signs of life, rising to -15.6 from -24.9 Overall, Industrial production was down to -0.7%, after the biggest decline since Hurricane Katrina. In addition, jobless claims rose by 6,000 to 371k.
Depsite the bevy of bad news, the dollar was little moved agasinst non commodity currencies. (Perhaps these are lagging indicators?? Hmmmm). The greenback was up against the Swiss Franc and Euro.
Tomorrow could be a bigger day - with Housing Starts and the University of Michigan Confidence Index. reporting.
Read more at Yahoo
Greenback, Euro, jobs report, Franc, USD
Job Reports, Inflation Drive Australian dollar Up, New Zealand dollar Down
May 8, 2008
New Zealand reported the largest decline in employment in 19 years yesterday. The deterioration of New Zealand's economy in recent months has shown that the Central banks efforts to cool the economy have largely worked. Many forex traders now believe the central bank will begin to cut rates from the record 8.25%. Rates may fall as much as 1% in the ne3xt year according to a Credit Suisse Index.
In Australia, jobs grew for a record 18th month, and the central bank raised inflation forecasts. Australia's dollar was trading at NZ$1.2187 (+1.2%).
read more at Bloomberg
jobs report, AUD, Aussie
US Jobs Report Better Than Expected
May 2, 2008
April job losses came in at -20,000 according to the US Labor Department. This was significantly below the expected -80,000.
The unemployment rate actually fell -0.1% from 5.1% to 5%.
Construction and manufacturing continued to cut jobs. However, technical and health services posted strong gains.
Read more at CNBC
jobs report, USD
