Aug 14


  • BY: admin
  • August, 14th, 2013 8:15 +00:00

Yesterday, European and US data revealed some sign of optimism as the ZEW indices all came out better than expected, the E-Z Industrial Production came out in positive, although a tad lower than expectations.  US Retail Sales showed a similar picture with positive figures- and a stronger core than expected. US Import Price increased showing a tendency towards a pick-up in inflation, but the core figures remained on the soft side, so no worrying signs there.  The Greenback rallied on the news and EUR/USD extended the bearish tone while the S&P also managed to print positive returns. Fed tapering was once again mentioned to commence in September by Lockhart.


Today, the Euro zone and the UK will take center stage and the US is to follow. European GDP will be released today at 9:00 GMT and market consensus points towards a quarterly increase of 0.2% compared to -0.1% in Q1. If the figure is positive, which everything indicates (especially after a very positive German GDP at +0.7%), then it will be the first positive quarter in eight for the common economy. However, there are still many challenges and we don't consider the crisis to be over.


From the UK. the BoE will present the minutes from the last meeting, and key Unemployment Data will be released at the same time. We expect unchanged stance from the MPC with regards to the interest rate as well as level of QE. However, as the MPC last week, while presenting their forward rate guidance, linked employment to inflation and hence the level of interest rates, the release of the ILO Unemployment rate and claims will receive extra attention this time. Keep in mind, that the MPC mentioned that rates would remain low until unemployment reached 7.0% (against 7.8% currently). GBP pairs will get another boost if the data comes out better than expected and we could see Cable produce a re-test of the 200-day SMA, currently at 1.5517.

From the US, Producer Prices for July are on the menu and markets are expecting a monthly increase of 0.2% in the Core figures, while the Headline is expected to rise 0.3%. Also, St. Louis Fed President Bullard will be on the wires later from Kentucky, which could cause some stir.

Have nice day!