Daily Forex Fundamentals | Written by CMS Forex | Jul 10 08 20:44 GMT |
JPN Corporate Goods Price Index Up 5.6% on the Year
In Japan, the Corporate Goods Price Index, a measure of producer prices, rose 5.6% in June compared to a year ago. It's the fastest annual rate in 27 years. On the month, prices were up 0.8%, as they are being pushed up by record oil and higher commodity prices.
JPN Current Account Up on Month, Shrinks 5.9% on Year
The current account surplus for Japan shrank 5.9% on the year to 2 trillion yen. Export growth slowed while record high oil prices increased the amount spent on imports, lowering the trade balance. Due to better numbers services though, the current account figure did increase from April's levels.
NZ Manufacturing PMI Slides to 45.7
The New Zealand manufacturing sector continues to show signs of contraction, coming under serious strain in June. The PMI, which fell from 49.3 in May to 45.7 in June, was the second weakest since the survey started in 2002.
AUS Employment Jumps 29.8K as Mining Companies Increase Jobs
In Australia, employment increased by 29,800 jobs in June, almost tripling expectations. The unemployment rate fell to 4.2% as a result. The job gains came on the back of Australia's 2 large mining companies which have seen business go up as a result of exports to the Chinese market. Other sectors however may have to cut jobs if consumer spending falters in the face of higher borrowing costs and inflation. May's fall in employment was the first drop in nearly a year and half.
AUD/JPY - Aussie Strengthens Following Jobs Report
The Aussie-Yen pair jumped about 100 pips overnight following the Australian jobs data reaching the 102.90 level, before consolidating during the New York session. The Aussie has managed to pare all of its losses from the first half of the week, and tested its resistance from Monday.
UK Housing Prices Fal 6.1% on the Year, According to HBOS
UK housing prices continue to tumble, falling at an annual rate of 6.1% in June, according to the Halifax bank of Scotland, the biggest fall since 1993. Prices fell 2% on the month to an average of £180,000. Declining housing prices are damaging the economy by weakening consumer confidence and limiting residential investment.
UK BOE Hold Rates at 5%, Weighing Weak Growth vs High Inflation
The Bank of England kept its benchmark interest rate unchanged at 5%. Policy makers are caught in a tough dilemma, as the UK economy teeters towards recession, but high inflation continues to be a major risk. Policy members seem preparted to weather a period of recession in the economy if it means lowering inflation, which in May reached an annual pace of 3.3%.
GBP/USD - Pound Falls 100 Pips Overnight on Housing, Rate Outlook
With UK housing prices continued to plummet, the Pound-Dollar fell 100 pips overnight. It did however find support above yesterday's low. The Bank's decision did not have a significant impact on the markets, and the Pound started a slight rally vs. the Dollar in NY trading.
GBP/CHF - Pound Falls to Franc as UK Stocks Slide Following BOE
Stocks on the London exchange stumbled with the main index falling more than 2% in reaction to the bank's outlook. The Pound-Swiss Franc pair, which is sensitive to stocks and risk appetite, slid more than 100 pips from its level prior to the bank's decision, ending a 2-session rally. The Pound found support at the 2.03 level.
US Jobless Claims Shows Surprising Drop, But Seasonal Factors May Be Culprit
In the US, jobless claims fell by 58K, the largest decline in nearly 3 years. The figure was influenced by seasonal factors, where a typical increase in jobless claims around this time of the year did not materialize. Those continuing to receive benefits rose by 91K to 3.2 million.
EUR/USD - Euro Rises on Bernanke and Paulson Comments
The Euro-Dollar pair was quiet overnight, gaining slightly in favor of the greenback as European stocks fell. However, in early NY trading the greenback weakened as Treasury Secretary Henry Paulson and Bernanke said financial market turmoil is "ongoing." The comments did not soothe jittery credit markets and the pair rose about 90 pips from its session low, testing 1.58, a new high for the week.
Upcoming Releases:
Overnight, Japan releases data on industrial production and consumer confidence.
Tomorrow, Canada unveils its employment change for June. Both the US and Canada post their trade balance figures. The US ends the week with import prices and the preliminary release of the UMich consumer sentiment for July.
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