GBP/USD Fundamental Analysis June 4, 2012, Forecast

 Analysis and Recommendations:

The GBP/USD started the Queens Jubilee weekend breaking below the 1.54 level to close at 1.5372

European manufacturing PMI was released today, with most countries hitting or exceeded forecast, except for Switzerland and the UK which reported below forecast, with the largest dip coming in the UK.

The economy of the UK has been suspect for several weeks and has kept the pound depressed. 

News flows from Spain, Italy and Greece were to the minimum and attention for most of the later part of the day was turned to the US where investors were expecting some big numbers, only to get major disappointments. 

The rapid deterioration in risk appetite is concerning and suggest there is more turmoil ahead; however periods of risk aversion tend to be short and violent, accordingly we are more likely to see a resolution before the end of June. Yesterday, there was some relief for euro when rumors of the IMF providing Spain with funds circled; however since then news has been concerning particularly as it highlights that the current crisis is not just about Europe but instead is a global growth problem. In this environment the USD is strong. Today, the USD remained strong but there was a shift to gold predicting a move by the Feds.

To sum up the US for the past two days, there is just one thing to say, “Spring stall” most of the indicators from the US have been negative or lackluster.

Employment data is terrible, Unemployment data is just as bad, Housing data is negative overall. Durable goods and retail sales, consumer confidence and manufacturing have all turned negative.

If it wasn’t for the mess in Europe, investors would be fleeing the US. Today, the Nonfarm data showed that the US only added 69,000 jobs, when it needs to average 200,000 additions per month. Unemployment has climbed back to 8.2%. GBP was revised downward this week and ISM manufacturing reported below forecast.

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 up to the data analysis and information in our weekly reports.

Economic Data for June 1, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jun. 01

 

KRW

 

 

South Korean CPI (YoY) 

2.5%

 

2.5% 

 

2.5% 

 

 

 

 

JPY

 

 

Capital Spending 

3.30%

 

1.30% 

 

7.60% 

 

 

 

 

CNY

 

 

Chinese Manufacturing PMI 

50.40

 

52.20 

 

53.30 

 

 

 

 

CNY

 

 

Chinese HSBC Man PMI 

48.40

 

 

 

48.70 

 

 

 

 

CHF

 

 

Retail Sales (YoY) 

0.1%

 

2.0% 

 

4.7% 

   

 

 

CHF

 

 

SVME PMI 

45.4

 

46.4 

 

46.9 

 

 

 

 

EUR

 

 

French Manufacturing PMI 

44.7

 

44.4 

 

44.4 

 

 

 

 

EUR

 

 

German Manufacturing PMI 

45.2

 

45.0 

 

45.0 

 

 

 

 

EUR

 

 

Manufacturing PMI 

45.1

 

45.0 

 

45.0 

 

 

 

 

GBP

 

 

Manufacturing PMI 

45.9

 

49.7 

 

50.2 

   

 

 

EUR

 

 

Unemployment Rate 

11.0%

 

11.0% 

 

11.0% 

   

 

 

USD

 

 

Average Hourly Earnings

0.1%

 

0.2% 

 

0.1% 

   

 

 

USD

 

 

Core PCE Price Index (MoM) 

0.1%

 

0.2% 

 

0.2% 

 

 

 

 

CAD

 

 

GDP (MoM) 

0.1%

 

0.3% 

 

-0.2% 

 

 

 

 

USD

 

 

Nonfarm Payrolls 

69K

 

150K 

 

77K 

   

 

 

USD

 

 

Personal Spending (MoM) 

0.3%

 

0.3% 

 

0.2% 

   

 

 

USD

 

 

Unemployment Rate 

8.2%

 

8.1% 

 

8.1% 

 

 

 

 

USD

 

 

Average Weekly Hours 

34.4

 

34.5 

 

34.5 

 

 

 

 

USD

 

 

Private Nonfarm Payrolls 

82K

 

160K 

 

87K 

   

 

 

USD

 

 

ISM Manufacturing Index 

53.5

 

53.9 

 

54.8 

 

 

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

 

Forecast

Previous

 

Jun 5

9:00

EUR

Retail Sales m/m

 

0.3%

10:00

EUR

German Factory Orders m/m

 

2.2%

14:00

USD

ISM Non-Manufacturing PMI

 

53.5

 

Jun 6

6th-8th

GBP

Halifax HPI m/m

   

8:30

GBP

Construction PMI

 

55.8

10:00

EUR

German Industrial Production m/m

 

2.8%

12:30

EUR

ECB Press Conference

   

12:30

USD

Revised Nonfarm Productivity q/q

 

-0.5%

14:30

USD

Crude Oil Inventories

   

18:00

USD

Beige Book

   

23:01

GBP

BRC Retail Sales Monitor y/y

 

-3.3%

 

Jun 7

7:00

CHF

Foreign Currency Reserves

 

235.6B

7:15

CHF

CPI m/m

 

0.1%

8:30

GBP

Services PMI

 

53.3

11:00

GBP

Asset Purchase Facility

 

325B

11:00

GBP

Official Bank Rate

0.50%

0.50%

TBD

GBP

MPC Rate Statement

   

12:30

USD

Unemployment Claims

 

383K

14:00

USD

Fed Chairman Bernanke Testifies

   

 

Jun 8

8:30

GBP

PPI Input m/m

 

-1.5%

8:30

GBP

Consumer Inflation Expectations

 

3.5%

12:30

USD

Trade Balance

 

-51.8B

14:00

USD

Fed Chairman Bernanke Testifies

   

Government Bond Auctions

Date  Time  Country 

May 31  14:30  Sweden 

Jun 04  10:00  Norway 

Jun 05  00:30  Japan 

Jun 05  09:30  Belgium

Jun 05 14:30  Sweden 

Jun 06  09:30  Germany 

Jun 06  09:30  Portugal 

Jun 06 14:30  UK 

Jun 07  00:30  Japan 

Jun 07  08:30  Spain 

Jun 07  08:50  France 

Jun 07  09:10  Sweden 

Jun 07  15:00  US 

Jun 08  10:00  Belgium 

Jun 08  15:30  Italy 

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