Tue, Jul 14 2009, 12:31 GMT
by Tim Salem
FXstreet.com Independent Analyst Team | View company's profile
This Data Point Release tracks Total U.S. Inventories and Business Sales, and is released approximately Six Weeks after the Reporting Month’s End at 14:00 GMT.
Offered by The Census Bureau, the Release gives a comprehensive Indication of Overall Economic Health concerning Current Cycle Conditions and acts as a Barometer of possible Futures Conditions as well.
The Report is comprised of Three Data Sets:
Released Simultaneously with Retail Sales, the Majority of the Business Inventory Data has already been released, and only the Retail Inventory Data that Firms have On-Hand is “new” to the markets for Digestion. A clear sign of Future Business Spending, the Inventory Data is crucial as Companies and Firms are more likely to purchase New Inventory if Supplies-on-Hand are depleted or below measure.
Traders will look to simultaneously-released Retail Sales Data for Cues on working with this Release, considering the Majority of the Components would have been released as a part of that Data Release. Market Reactions on the whole to Business Inventories are “mild” due to the above reasons. Non-Event Days or Days with lower Institutional Volume and High Volatility may still bring Market Reactions immediately after Release.
We still have some Characteristics that can be observed as follows:
CURRENCIES: The “I/S Ratio” is the crucial Component concerning the underlying Currency, as increased Inventory Ratios to Sales Data will be largely Negative for The Currency due to a “Gridlock” of excess Inventory not being moved by the Firms. This type of Sentiment would them raise concerns about Lower Interest Rates and decreasing Outflows to Foreign Investors. If the Sales and Inventory by the Companies and Firms are liquid and moving, this would be Positive for the Currency and it will rise in Appreciation.
BONDS: An Increase in Inventory sales signifies a Robust Economic Environment, which implies stronger GDP Growth leading to Bond Price Devaluation. As Inventories slow and “Gridlock” on the Company Level, this will lead to Price Appreciation and higher Bond Prices.
EQUITIES: The Equity Markets and Indices have little to no Reaction to this Data Point, as the majority of Equity Activity will occur during the Retail sales Data Point Release.
* Download here the Business Inventories Data courtesy of The U.S. Department of Commerce
Published on Tue, Jul 14 2009, 14:27 GMT
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