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Weekly Market View

New high for the Euro; the credit crisis still present

Fri, Jul 18 2008, 13:25 GMT
by Guillermo Alcalá

FXstreet.com

We just ended a week with several remarkable happenings and high volatility on the markets. The week began with the Fed and the US Treasury coming to rescue Fanny Mae and Freddie Mac, boosting its credit line with the government sponsiored enterprises, a plan which could ease somewhat concerns about the US finantial and housing sector.

Later on the Euro reached a fresh all time high against the Dollar at 1.6037 before declining for two consecutive days.

Oil reached a new record at 147 Dollars per barrel and slided afterwards for three days so far to levels below 130 Dollars a move that has prompted analysts to talt about a possible peak for cruce prices. Together with the oil price drop, the US Dollar has been appreciating against most majors.

In the macroeconomical agenda the week has given more reasosn for concern, starting with the sharp drop in German economic confidence, as the ZEW index dropped to a record low last Tuesday.  In the US we have seen consumer inflation rising at 5% year on year pace, the fastest seen since 1982. In the positive side, US housing starts bounced up yesterday stronger than expected, and so did construction permits. Could this be the starting point for a recovery in the housing market?

This week we have several important events, let’s go over them.

On Sunday (July 20th) we have the following events to watch:

• The week’s economic agnda will open in the United Kingdom with the Rightmove House Prices Index (Previous: -1.2% MoM)
  
  

On Monday (July 21th) we have the following events to watch:

• InAustralia the event of the day will be Producer´s Prices Index (Prev: 1.9% QoQ/ 4.8% YoY).
• In the American timeframe the Conference Board’s Leading Index will be released (Previous: 0.1%).
• Lastly, in Japan we will see the figures for the All Industries Activity Index (Previous: 0.8%)
  
  

On Tuesday (July 22th) we have the following events to watch:

• In Switzerland, the Trade Balance will open the day (Previous: CHF 1.87B).
• Later on, in Canada the figures for May’s Retail sales will be released (Previous: 0.6%; Ex autos: 1.1%).

On Wednesday (July 23th) we have the following events to watch:

• In Australia, th “nd Quarter’s CPI will open the day n(Previous: 1.3% QoQ/ 4.2% YoY).
• During the European session, the Bank of England will publish the minutes of its latest monetary policy meeting.
• In Canada, the Consumer Prices Index will be the day’s event (Previous: 2.2% YoY) and the Core CPI (Previous: 1.5% YoY).
• In the US, the Federal reserve will publish tthe Beige Book.
• In New Zeland, the Reserve Bank of New Zeland’s Monetary Policy Committee will approve its Official Cash Rate (Actual: 8.25%).
• In Japan, the release of June’s Merchandise trade Balance will seal off the day’s agenda (Previous: 642.3B Adjust./ 365.6B Total)

On Thursday (July 24th) we have the following events to watch:

• In Germany, the event of the day will be the Ifo Busines Climate Index (Previous: 101.3) and the Expectations Index (Previous: 94.7).
• In The Euro Zone, May’s Current Account will be released (Previous: -9.2B n.s.a./  -0.3B s.a.)
• In the UK, the indicator of the day will be June’s retail sales (Previous: 3.5% MoM/ 8.1% YoY).
• In the US, the Commerce Department will release June’s Existing Home Sales (Previous: 4.99M annual rate).
• In Japan, the National CPI (Previous: 1.3% YoY/ Ex Food & Energy: -0.1% YoY) and the Tokio CPI (Previous: 1.5% YoY/ Ex Food & Energy: 0.3% YoY) will close the day’s agenda.
  

On Friday (July 25th) we have the following events to watch:

• In the UK, preliminary figures for the Gross Domestic Product will be released (Previous: 0.3% QoQ/ 2.3% YoY).
• In the US the day will start with the release ogf the Durable Goods Orders (Previous 0%; ex-transportation: -0.9%).
• Later on, also in the US the New Home Sales will be released (Previous: 512K annual rate).
• In the US, The Reuters/ Michigan Consumer Confidence Index will bee the last event of the week (Previous: 56.4).

Published on  Fri, Jul 18 2008, 14:05 GMT

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