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Weekly Market View

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One just has to wonder

Mon, Jul 7 2008, 07:30 GMT
by Tatsuya Kawanishi

FXstreet.com

On July 3rd, the European Central Bank decided to hike the rates by 25bps to 4.25% as might have been widely expected. The ECB's stance was accepted as neutral,or slightly negative that further rate hike would not be considered in the near future. In recent high liquidity markets the EUR/USD immediately reacted by falling sharply over 200 pips. At the same time “the USD vs the low yields” surprised us, especially the USD/CHF that showed a rocket spike. It was almost 300 pips-up, making the weekly hight at 1.0283. The USD has gained against the other majors though, we could be nothing to get smiley about the outcome. The risks for the U.S. economy remain tilted to further weakness. We have seen these in fundamental such as ADP employment (actual -79K vs forecast -20K), the big NFP (actual -62K vs forecast -54K), unemployment rate (actual 5.5% vs forecast 5.4%) and ISM non-manufacturing (actual 48.2 vs forecast 51.3).

We keep on paying close attention to the markets during the week (July 6th to July 11th ), especially the majors and the JPY crosses. It is worth noting that the BoE interest rate decision is scheduled on Thursday July 10. Alright! Let's review them all.

On Sunday (July 6th) we have the following events to watch:

• There is no significant event on Sunday

On Monday (July 7th) we have the following events to watch:

• In Switzerland, Unemployment Rate (Previous 2.5%) is scheduled at 05:45 GMT.
• In the U.K. Industrial Production (Previous 0.2%) and NIESR GDP (Previous 0.2%) are events to monitor.
• In Germany, Industrial Production (Previous -0.8%) is released at 10:00GMT.
• In New Zealand, NZIER Business Confidence (Previous -64) is scheduled at 22:00 GMT

On Tuesday (July 8th) we have the following events to watch:

• In Australia, NAB Business Confidence (Previous -4) is released at 01:30 GMT.
• In the U.S. Pending Home Sales (Previous 6.3%) and Consumer Credit (Previous 8.9B) are events to watch.
• In the U.K. Consumer Confidence (Previous 69) is released at 23:01 GMT.

On Wednesday (July 9th) we have the following events to watch:

• In Australia,WMI Consumer Sentiment (Previous -5.6%) is an event to monitor.
• In Germany, Trade Balance (Previous 18.7B) is a notable event to follow.
• In the U.K. Trade Balance (Previous -7.6B) and BRC Shop Price Index (Previous -1.8%) are notable events to watch.
• In Japan, Current Account (Previous 1.51T) is an event to be taken into account.

On Thursday (July 10th) we have the biggest day of the week with the following events:

• In Australia, Unemployment Rate (Previous 4.3%) is an important event to follow.
• In the U.K. the BoE Interest Rate Decision (Current 5.00%) is to be taken into account. Its release is at 11:00 GMT. Please keep eyes open for how the BoE considers the current value of the GBP and the inflationary pressure in the U.K.

On Friday (July 11th) we have the 2nd biggest day of the week with the following events:

• In Japan, Industrial Production (Previous 2.9%) and Household Confidence ( Previous 34.1) are events to monitor.
• In Canada, Unemployment Rate (Previous 6.1%) and Trade Balance (Previous 5.1B) are important events to follow.
• In the U.S. Trade Balance (Previous -58.2B), Import Price Index (Previous 2.3%), and Michigan Sentiment (Previous 56.4) are remarkable events to watch.

Published on  Mon, Jul 7 2008, 07:30 GMT