Weekly Analysis and Recommendation:
The EUR/USD tumbled to trade at 1.2834. This week the pair reacted toHurricane Sandy caused widespread damage along the US East Coast. The damages from Sandy are estimated to amount to 0.1% of US GDP.US manufacturing ISM increased fo a second month in a row and new orders improved as well. Details suggest that primarily domestic demand is picking up.The euro area bank lending survey showed that credit tightening continues at a slightly increased pace.China’s official NBS manufacturing PMI improved moderately to 50.2 in October from 49.8 in September, indicating that growth has bottomed.The Bank of Japan (BoJ) expanded the target for its asset purchase program further by JPY11trn to JPY66trn.And last but not least was a decision by the Greek constitutional court that the budget cuts and reform to the pension system were unconstitutional, throwing a big wrench in budgets and austerity measures for Greece, making it close to impossible for additional funding for Greece.By the end of the week the US dollar had mounted a strong campaign backed up by positive eco data showing the US economy was in full recovery mode. As traders waited for a final piece of data on Friday the dollar climbed. By late morning the NFP was released showing the US had created more jobs than expected and also revisions upwards of prior months. The euro collapsed.
Date
|
Last
|
Open
|
High
|
Low
|
Change %
|
Nov 02, 2012
|
1.2834
|
1.2947
|
1.2947
|
1.2821
|
-0.87%
|
Nov 01, 2012
|
1.2947
|
1.2965
|
1.2982
|
1.2925
|
-0.14%
|
Oct 31, 2012
|
1.2965
|
1.2961
|
1.3020
|
1.2947
|
0.03%
|
Oct 30, 2012
|
1.2961
|
1.2907
|
1.2983
|
1.2887
|
0.42%
|
Oct 29, 2012
|
1.2907
|
1.2922
|
1.2936
|
1.2886
|
-0.12%
|
US markets indeed global markets will be overwhelmingly focused upon the outcome of Tuesdays Presidential election and the market aftermath. As far as market risks go, my base case assumption is that President Obama wins, but the House and Senate are still split between the GOP and Democrats respectively. If that happens, then equities might sell off and Treasuries could be bid since this would lower the odds of favorable tax treatment of capital gains and investment income. Also, gridlock will continue unchanged, and the fiscal cliff will likely go right to the last second before any agreement gets put into play. This scenario could favor a risk off bias into Treasuries and the USD.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide dailyupdates and outlooks.
Major Economic Events for the past week actual v. forecast for Euro, GPB, the Franc, and USD
Date
|
Currency
|
Event
|
Actual
|
Forecast
|
Previous
|
Oct. 29
|
USD
|
Core PCE Price Index (MoM)
|
0.1%
|
0.1%
|
0.1%
|
USD
|
Personal Spending (MoM)
|
0.8%
|
0.6%
|
0.5%
| |
EUR
|
German CPI (MoM)
|
0.0%
|
0.0%
|
0.0%
| |
EUR
|
German CPI (YoY)
|
2.0%
|
2.0%
|
2.0%
| |
Oct. 30
|
EUR
|
German Unemployment Change
|
20K
|
10K
|
12K
|
EUR
|
Italian 10-Year BTP Auction
|
4.92%
|
5.24%
| ||
GBP
|
CBI Distributive Trades Survey
|
30
|
7
|
6
| |
Oct. 31
|
EUR
|
French Consumer Spending (MoM)
|
0.1%
|
0.2%
|
-0.8%
|
EUR
|
CPI (YoY)
|
2.5%
|
2.5%
|
2.6%
| |
USD
|
Employment Cost Index (QoQ)
|
0.4%
|
0.5%
|
0.5%
| |
USD
|
Chicago PMI
|
49.9
|
51.0
|
49.7
| |
Nov. 01
|
CNY
|
Chinese Manufacturing PMI
|
50.20
|
50.30
|
49.80
|
CNY
|
Chinese HSBC Manufacturing PMI
|
49.50
|
49.10
|
49.10
| |
GBP
|
Nationwide HPI (MoM)
|
0.6%
|
0.2%
|
-0.4%
| |
CHF
|
Retail Sales (YoY)
|
5.4%
|
4.2%
|
6.0%
| |
CHF
|
SVME PMI
|
46.1
|
44.5
|
43.6
| |
GBP
|
Manufacturing PMI
|
47.5
|
48.1
|
48.1
| |
USD
|
ADP Nonfarm Employment Change
|
158K
|
135K
|
114K
| |
USD
|
Nonfarm Productivity (QoQ)
|
1.9%
|
1.6%
|
1.9%
| |
USD
|
Initial Jobless Claims
|
363K
|
370K
|
372K
| |
USD
|
Unit Labor Costs (QoQ)
|
-0.1%
|
1.0%
|
1.7%
| |
USD
|
Continuing Jobless Claims
|
3263K
|
3250K
|
3259K
| |
USD
|
CB Consumer Confidence
|
72.2
|
72.5
|
68.4
| |
USD
|
ISM Manufacturing Index
|
51.7
|
51.2
|
51.5
| |
Nov. 02
|
EUR
|
Italian Manufacturing PMI
|
45.50
|
45.90
|
45.70
|
EUR
|
French Manufacturing PMI
|
43.7
|
43.5
|
43.5
| |
EUR
|
German Manufacturing PMI
|
46.0
|
45.7
|
45.7
| |
EUR
|
Manufacturing PMI
|
45.4
|
45.3
|
45.3
| |
USD
|
Average Hourly Earnings (MoM)
|
0.0%
|
0.2%
|
0.3%
| |
USD
|
Nonfarm Payrolls
|
171K
|
125K
|
148K
| |
USD
|
Average Weekly Hours
|
34.4
|
34.5
|
34.4
| |
USD
|
Private Nonfarm Payrolls
|
184K
|
125K
|
128K
|
Historical: From 2010 to Present
Highest:1.4940 USD on May 04, 2011.
Average:1.3434 USD over this period.
Lowest:1.1877 USD on Jun 07, 2010.
Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD
Date
|
Time
|
Currency
|
Event
|
Forecast
|
Previous
|
Nov. 05
|
15:00
|
USD
|
54.5
|
55.1
| |
Nov. 06
|
06:45
|
CHF
|
-22
|
-17
| |
09:30
|
GBP
|
-0.6%
|
-0.5%
| ||
09:30
|
GBP
|
0.3%
|
-1.1%
| ||
09:30
|
GBP
|
-1.6%
|
-1.2%
| ||
11:00
|
EUR
|
-0.5%
|
-1.3%
| ||
Nov. 07
|
08:15
|
CHF
|
0.3%
|
0.3%
| |
10:00
|
EUR
|
-0.1%
|
0.1%
| ||
11:00
|
EUR
|
-0.5%
|
-0.5%
| ||
Nov. 08
|
12:00
|
GBP
|
0.50%
|
0.50%
| |
12:00
|
GBP
|
375B
|
375B
| ||
12:45
|
EUR
|
0.75%
|
0.75%
| ||
Nov. 09
|
01:30
|
CNY
|
1.9%
|
1.9%
| |
01:30
|
CNY
|
-2.7%
|
-3.6%
| ||
01:30
|
CNY
|
0.1%
|
0.3%
| ||
05:30
|
CNY
|
20.6%
|
20.5%
| ||
05:30
|
CNY
|
9.4%
|
9.2%
| ||
05:30
|
CNY
|
14.1%
|
14.2%
| ||
07:00
|
EUR
| ||||
07:00
|
EUR
|
2.0%
|
2.0%
| ||
09:30
|
GBP
|
-8.9B
|
-9.8B
|
Government Bond Auction
Date Time Country
Nov 05 10:10 Norway
Nov 06 10:10 Greece
Nov 06 10:15 Austria
Nov 06 10:30 Belgium
Nov 06 10:30 UK
Nov 06 15:30 UK
Nov 06 18:00 US
Nov 07 10:30 Germany
Nov 07 15:30 Sweden
Nov 07 18:00 US
Nov 08 9:30 Spain
Nov 08 10:10 Sweden
Nov 08 16:30 Italy
Nov 08 18:00 US
Nov 09 11:00 Belgium
Nov 09 16:30 Italy
Click here for updated EUR/USD News.
Originally posted here
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