Eur/usd - page 133
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Number Of French Jobless Rises To New Record
With "recoveries" like these who needs staged, false flag conflicts and wars covering over 10% of the globe? Well, socialist France for one which moments ago announced that total jobless rose from 3.389 million to 3.398 million, a new record high. Surprisingly, while the year-over-year unemployment change for people under 25 declined by 3.1%, it was workers 25-49 which saw a material 3.3% increase in joblessness, but it was workers aged 50 and older that saw a veritable surge in unemployment, rising by 11.5% from a year ago. Surely, just like in the US, this is due to young people retiring in droves.
Reuters reports:
German Weltschmerz Hammers Markets
It appears that the famously cheerful Germans aren’t feeling quite so optimistic lately.The euro is holding near an eight-month low and global markets are limping into the weekend after the Ifo German business confidence survey fell for a third month running. The closely watched benchmark fell to 108, crushing market expectations around the 109.50 mark – and illustrating the toll that the conflict in Ukraine is taking on the European Union’s growth engine.
The dollar continues to gain altitude, leaping upward after demand for durable goods in the U.S. increased more than forecast in June, supporting the almost universal belief that the world’s largest economy is beginning to accelerate forward.
Orders jumped by 0.7% in June for goods that are meant to last for more than three years, beating consensus estimates closer to 0.5%. Non-military, non-aircraft orders surged 1.4%, putting more weight behind a dollar rally that seems almost unstoppable at this juncture. The yield landscape has tilted heavily toward the greenback over the past two weeks, particularly on the heels of Janet Yellen’s suggestion that rates could rise sooner than markets expect “if the labor market continues to improve more quickly than anticipated”.
Crude oil prices are steady, with West Texas Intermediate tea trading on the $102 handle while Brent remains rangebound around the $107 mark. Geopolitical concerns continue to keep the complex supported, but well-supplied markets seem to be following the old dictum – “keep calm, and carry on”.
The Canadian dollar is sitting smack in the middle of its recent trading range, coming under upward pressure as the country’s largest export market improves, but pulled downward by ongoing concerns over the state of the domestic economy. As we’ve suggested repeatedly over the past six months, the country’s debt-fuelled consumption binge has distorted economic incentives, meaning that the loonie remains extremely vulnerable to a downward correction in the coming months.
A busy week beckons, with a series of critical data releases and announcements in the docket from Wednesday through Friday. With the Federal Reserve making an announcement, GDP reports dropping in the United States and Canada, Chinese manufacturing numbers, and the non-farm payrolls report looming, the ingredients for market instability are all in place. Implied volatility levels are already on the rise, and could rise further in the coming days. Forewarned is forearmed.
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EUR/USD Forecast July 28, 2014
The EUR/USD pair fell again during the session on Friday, breaking the bottom of the candle from the Thursday session, showing us that the market should continue to go lower. The 1.33 level below should be supportive though, and as a result we think that’s what the market is going to target. Ultimately, the market will probably bounce from there, binds it certainly is in a negative attitude at the moment. Any rally should continue to be a selling opportunity, unless of course we get back above the 1.3550 level, which would show a significant break of resistance.
German Business Confidence Drops To 9-month Low Hurt By Geopolitical Tensions
German business confidence eased for the third successive month to its lowest level since October, amid rising concerns over the impact of the worsening conflicts in Ukraine and the Middle East on the largest Eurozone economy.
The Business Climate Index for industry and trade fell to 108.0 points in July from 109.7 in June, the results of a survey by the Munich-based Ifo Institute showed Friday. The fall was worse than the expected decline to 109.4.
The score was the lowest since October last year, when the reading was 107.5. "Geopolitical tensions are taking their toll on the German economy," the think tank said.
The current situation index of the survey fell to a six-month low of 112.9 from 114.8. Economists had forecast a modest fall to 114.5.
The expectations measure dropped to 103.4 from 104.8 in the previous month. Economists had expected a score of 104.4. The July reading was the lowest since July last year.
Commerzbank expects the Ifo index to keep falling in the coming months. "The German economy is obviously no longer running quite as smoothly as at the start of the year," Commerzbank economist Ralph Solveen said.
"The Ifo thus argues against overly optimistic expectations for economic growth in the second half of 2014."
Earlier today, a survey by the market research firm GfK showed that German consumer confidence is set to improve further in August to the strongest level since December 2006 despite escalating geopolitical tensions in Israel and Ukraine.
The German private sector expanded at a stronger pace in July led by increased services activity, the purchasing managers' survey from Markit Economics showed yesterday. That said, new business growth eased to a four-month low.
The Bundesbank expects the economy to stall in the second quarter as geopolitical tensions across the world act as a drag on the German manufacturing.
The Ifo survey showed that the confidence index for manufacturing declined sharply for a third month in July. The export outlook eased to the weakest level in over a year, though companies remain positive.
The Federal Statistical Office is set to publish second quarter GDP data on August 14. The economy grew 0.8 percent sequentially in the first quarter.
"We still expect the German recovery to continue at a modest pace rather than accelerating," Capital Economics Senior European Economist Jennifer McKeown said.
"Fears that monetary policy is already too loose for Germany are overdone and, with many parts of the euro-zone still struggling to get out of recession, the ECB will remain under pressure to provide more support."
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EUR/USD Forecast Jul 28-Aug 1
EUR/USD lost ground for another week and reached levels last seen in November 2013. Will it continue lower? Inflation numbers stand out among the wide list of releases due. Here is an outlook on the highlights of this week and an updated technical analysis for EUR/USD.
Eurozone PMIs improved in June and the unemployment rate in Spain dropped below 25% for the first time in almost two years. However, German business confidence dropped and triggered worries. In the US, worries came from weak sales of new homes, but the drop of jobless claims to an 8 year low had the upper hand and certainly supported the greenback.
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Moody's raises rating on Portugal's government bond
Moody's Investor Service raised Portugal's government bond rating on Friday to "Ba1" from "Ba2", citing the expectation that the country's fiscal consolidation remains on track.
Portugal's highest court in May struck down several budget measures, including some public sector salary cuts, creating a fiscal gap of about 700 million euros this year.
"The first driver behind the upgrade is Moody's view of the government's strong commitment to fiscal consolidation, despite repeated set-backs stemming from the adverse rulings of the country's Constitutional Court," Moody's said on Friday. (bit.ly/1phcEXF)
Portugal has undertaken several austerity and reform measures since the European debt crisis that rocked global markets.
The ratings agency assigned a stable outlook to the government bonds but said that the country's high external debt was a key credit weakness.
EUR/USD weekly outlook: July 28 - August 1
The euro fell to eight month lows against the stronger dollar on Friday and was close to multi-month lows against the yen and the pound as concerns over the divergence in monetary policy between the European Central Bank and other central banks pressured the single currency lower.
EUR/USD was down 0.25% to 1.3429 at the close, reaching the lowest level since November. For the week, the pair lost 0.74%.
The pair is likely to find support at around 1.3400 and resistance at 1.3475.
The drop in the euro came after a report showed that Germany’s Ifo business climate index dropped to 108.0 in July, missing estimates for a reading of 109.4. It was the third consecutive monthly decline.
The data added concerns over the outlook for the euro zone’s largest economy. The euro has come under pressure since the ECB cut rates to record lows on June 5, in a bid to stave off the risk of deflation and shore up growth in the region.
Sentiment on the single currency was also hit by concerns that tougher sanctions on Russia would have a negative impact on the outlook for growth in the currency bloc, which has close trade ties with Moscow.
The greenback was boosted as better than expected data on durable goods orders for June added to signs that the U.S. economy is improving.
The Commerce Department reported a rise of 0.7% in orders of long lasting goods such as machinery and electronic products, compared to forecasts of 0.5%. Durable goods orders fell by 1.0% in May.
Demand for the dollar has been underpinned since Federal Reserve Chair Janet Yellen indicated earlier this month that U.S. interest rates could rise sooner if the recovery in the labor market continues.
Elsewhere Friday, EUR/JPY was down 0.23% to 136.75 late Friday, not far from the five month lows of 136.35 reached in the previous session.
EUR/GBP slid 0.18% to 0.7910, not far from Wednesday’s 22-month low of 0.7873.
In the week ahead investors will be focusing on U.S. data on second-quarter gross domestic product and an interest rate decision by the Federal Reserve on Wednesday, while Friday’s nonfarm payrolls report for July will also be closely watched.
The euro zone is to release preliminary data on consumer prices on Thursday.
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ECB’s aggressive easing measures should address too-low inflation problem
ECB Vice President Vitor Constancio said in Bangkok over the weekend that the aggressive easing measures taken by the European Central Bank last month should address the problem to too-low inflation in the euro zone, and signalled that that additional measures are unlikely in the near term.
“We have to wait and see what will be the use of these measures. We won’t introduce new measures until we assess [whether] these measures will be as effective as we expected”
Said the most recent measures from the ECB have alreadys started to show some effects:
“In the interbank rate, we see that the overnight rate went down. It has been very low, as it was to be expected. We also see more activities in the interbank market, as expected”
He added that the impact from the targeted loans, which are at maturities of four years, is still to come
i wish everyone a great week
Euro at 8-month lows against stronger dollar
The euro was hovering at eight month lows against the broadly stronger dollar on Monday after weak German economic data on Friday underlined concerns over the divergence in monetary policy between the European Central Bank and its major peers.
EUR/USD was little changed at 1.3432, close to the lowest level since November.
The pair was likely to find support at around the 1.3400 level and resistance at 1.3475.
The euro fell on Friday after a report showed that Germany’s Ifo business climate index dropped to 108.0 in July, the third consecutive monthly decline.
The data added concerns over the outlook for the euro zone’s largest economy. The euro has come under pressure since the ECB cut rates to record lows on June 5, in a bid to stave off the risk of deflation and shore up growth in the region.
Sentiment on the single currency was also hit by concerns that tougher sanctions on Russia would have a negative impact on the outlook for growth in the currency bloc, which has close trade ties with Moscow.
Demand for the dollar continued to be underpinned ahead of the latest U.S. employment report later in the week and the upcoming Federal Reserve statement on Wednesday. Investors were also awaiting final data on U.S. second-quarter growth on Wednesday.
Earlier this month Fed Chair Janet Yellen said that rates could rise sooner if the recovery in the labor market continued.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was close to six month highs at 81.12.
EUR/JPY edged up 0.06% to 136.82, not far from the five month lows of 136.35 reached last Thursday.
Elsewhere Monday, the dollar was close to three week highs against the yen, with USD/JPY easing up 0.03% to 101.86.
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