A quiet start to the forex trading week with the only significant item of fundamental news being preliminary GDP in Japan which has come in worse than expected at 0.1% against a forecast of 0.6% resulting in China now officially overtaking Japan as the world’s second largest economy. The overnight release has now confirmed that Japan’s economy grew at its slowest rate for three quarters as global demand slowed and recent financial stimulus effects begin to wear off with the Yen strengthening as a result against the US dollars. With no important news either in Europe or the UK the only other item to look out for is in the US with the TIC long term purchases data and forecast at 36.3bn against a previous of 35.4bn. If this figure is exceeded then this could be good news for the US dollar and continue its recent short term bullish reversal.
Tuesday’s forex trading session gets under way in Australia with the release of the recent minutes from the monetary policy meeting followed by later in the trading session by a speech from RBA Governor Glen Stevens who is due to give the Shann Memorial Lecture. This is followed shortly after by the release of CPI data in the UK, forecast at 3.1% against a previous of 3.2% and the equivalent core CPI at 3% versus a previous of 3.1%. The focus of attention then shifts to Europe with an important sentiment indicator from German, the ZEW, which is currently forecasting a decline from last month’s 21.2 to 20.9 this time. This may not come as a great surprise to the forex markets given that we are at mid summer at present.
Later in the morning we have the potential for a BOE inflation letter assuming the CPI data is as forecast and above the 2% plus 1% target which triggers such a letter.
Attention then shifts to the US forex markets with two important releases, namely building permits which are expected to remain flat at 0.58m and the PPI data which is forecast to come in at 0.2% against a previous of -0.5%.
A very quiet day on Wednesday for forex news with only two items due for release: the first is the MPC minutes in the UK with a forecast split of 1-0-8 against a previous of 1-1-7. We then have to wait until late in the Asian forex trading session for the PPI data in New Zealand with no forecast for this number at present.
Thursday’s forex trading session starts in the UK with the release of the retail sales figures which are expected to come in lower than last month’s 0.7% down to 0.4%, further evidencing a slow down in consumer demand as a result. Later in the trading session the US markets will see more unemployment numbers with the weekly unemployment claims expected to show a marginal decline from 484k down to 479k and this is followed later in the US trading session with the Philly Fed manufacturing index expected to show a rise from 5.1 last time to 7.2 this time.
The forex trading week ends very quietly on Friday with only one item of significant news which is the Core CPI data from Canada which is expected to reverse last month’s negative figure of -0.1% and come in at a 0.1%.
Finally over the weekend we have a the parliamentary elections in Australia so expect to see a reaction from the markets on Monday once the results have been announced and any open positions in either the Aussie dollar or Australian stocks strongly protected.
