GBP/USD Fundamental Analysis March 14, 2012, Forecast

Analysis and Recommendations:

The GBP/USD is currently at 1.5729 after the greenback was strong in early trading, pushing the pound down to 1.5642; the GBP seems to be rebounding as investors position themselves for the news from the Fed.

There was very little available news today, Germany reported an above expectations ZEW sentiment and US retail sales came in above forecasts.

Van Rompuy claims that the conclusion of a debt relief program for Greece was the strongest evidence yet that the continent is getting its debt crisis under control.

 A closely-watched gauge of German investor sentiment jumped sharply in March to its highest level since June 2010. The Mannheim-based Center for European Economic Research, or ZEW, said its sentiment indicator rose to 22.3 from 5.4 in February

Spain will implement further budget cuts requested by EU — Spain says EU “largely accepted” its arguments for leniency on targets — Spain could start discussing how to implement further cuts Tuesday.

 US Retail sales climbed to a five-month high in February, as rising gasoline prices weren’t enough to choke off demand for cars, clothing and other goods. The Commerce Department said Tuesday that retail sales rose a seasonally adjusted 1.1%

   

Economic Data March 13, 2012 actual v. forecast

 

JPY

 

 

 

Tertiary Industry Activity Index (MoM) 

-1.7%

 

0.4% 

 

1.8% 

 

 

 

GBP

 

 

 

RICS House Price Balance 

-13%

 

-14% 

 

-16% 

 

 

 

AUD

 

 

 

Home Loans (MoM) 

-1.2%

 

-0.1% 

 

2.1% 

   

 

AUD

 

 

 

NAB Business Confidence 

1

 

 

 

 

 

 

JPY

 

 

 

Interest Rate Decision 

0.10%

 

0.10% 

 

0.10% 

 

 

 

EUR

 

 

 

French CPI (MoM) 

0.4%

 

0.4% 

 

-0.4% 

 

 

 

HUF

 

 

 

Hungarian CPI (YoY) 

5.9%

 

5.8% 

 

5.5% 

 

 

 

CHF

 

 

 

PPI (MoM) 

0.8%

 

0.3% 

 

0.0% 

 

 

 

SEK

 

 

 

Swedish CPI (YoY) 

1.9%

 

1.8% 

 

1.9% 

 

 

 

GBP

 

 

 

Trade Balance 

-7.5B

 

-7.8B 

 

-7.2B 

   

 

EUR

 

 

 

German ZEW Economic Sentiment 

22.3

 

10.5 

 

5.4 

 

 

 

EUR

 

 

 

ZEW Economic Sentiment 

11.0

 

3.8 

 

-8.1 

 

 

 

USD

 

 

 

Core Retail Sales (MoM) 

0.9%

 

0.8% 

 

1.1% 

   

 

USD

 

 

 

Retail Sales (MoM) 

1.1%

 

1.0% 

 

0.6% 

   

 

Economic Calendar March 14, 2012

10:30     GBP      Average Earnings Index +Bonus                                1.9%                      2.0%       

10:30     GBP       Claimant Count Change                                               6.0K                       6.9K

The Average Earnings Index measures change in the price businesses and the government pay for labor, including bonuses.  Claimant Count Change measures the change in the number of unemployed people in the U.K. during the reported month. A rising trend indicates weakness in the labor market, which has a trickle-down effect on consumer spending and economic growth.              

 11:00    EUR       CPI (YoY)                                                                      2.7%                      2.7%                     

 11:00    EUR        Industrial Production (MoM)                                        0.7%                      -1.1%                    

 11:00    EUR       Core CPI (YoY)                                                              1.6%                      1.5%       

This is a triple report covering all of the eurozone. The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.         

13:30     USD       Current Account                                      -114.0B                                 -110.0B

The Current Account index measures the difference in value between exported and imported goods, services and interest payments during the reported month. The goods portion is the same as the monthly Trade Balance figure. Because foreigners must buy the domestic currency to pay for the nation’s exports the data can have a sizable affect on the USD.

13:30     USD      Import Price Index (MoM)                                                0.6%                      0.3%

The Import Price Index measures the change in the price of imported goods and services purchased domestically.

15:00     USD      Fed Chairman Bernanke Speaks

Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to speak. As head of the Fed, which controls short term interest rates, he has more influence over the U.S. dollar’s value than any other person. Traders closely watch his speeches as they are often used to drop hints regarding future monetary policy       

               

Government Bond Auction Schedule     (this week)

Mar 14  10:10  Italy   BTP/CCTeu auction

Mar 14  10:10  Sweden  Auctions T-bills

Mar 14  10:30  Swiss  Bond auction

Mar 14  15:30  Sweden  Details nominal bond exchange auction on Mar 21

Mar 14  18:00  US  Auctions 30Y Bonds

Mar 15  09:30  Spain  Obligacion auction

Mar 15  09:50  France  BTAN auction

Mar 15  10.30  UK  Auctions 4.5% 2042 conventional Gilt

Mar 15  10:50  France  OATi auction

Mar 15  16:00  US  Announces auction of 10Y TIPS on Mar 22

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