Major Market Mover: Tough Day For The U.S.

Daily Forex Fundamentals | Written by Crown Forex | Jul 15 08 07:38 GMT |


The U.S. economy is preparing today to pump a very huge amount of a class A fundamentals in the market, a journey that will start with retail sales and CPI data, and will pass by manufacturing figures, and will end with Mr. Bernanke testimony on the economy and monetary policy.

The start will be with the U.S. retails sales, which is expected to show an incline of 0.4% for the month of June, after an increase of 1% in May due to increasing spending resulted from the tax rebates distributed on the U.S. consumers. Retails sales excluding Autos is expected to increase by 1% following 1.2% in May.

The retail sales numbers are extremely important at this time, as fears from the effect of the financial turmoil on the economy, while everyone almost think that the economy escaped recession, renewed fears now may just push the economy and the dollar of the edge.

At the very same time, the Department of Commerce will announce their pro-ducer price index for the month of June, with expectations that the economy will witness more inflation risks, with soaring food and energy prices, even core prices are expected to inch higher. PPI probably rose 1.4% for the monthly reading, and rose 8.7% from a year ago, whi9le core prices are expected to increase 0.3% for June, and 3.2% from a year ago compared to 3.00% in the previous month.

Inflation and growth, the same old economic equation is trying to balance itself, but the way we see it going, that the balance is not there, and more divergence in both values are created, between less spending and decreasing confidence, along with more financial troubles and housing slump, and skyrocketing food and energy prices driving inflation world wide higher and higher, the only answer we have is a phase of Stagflation.

In another report on manufacturing, the empire state manufacturing index is ex-pected to fall by 8 in July, after falling 8.7 in June, highlighting that the manufacturing sector is far from recovery, and economy might be far from growth.

And as a closure for the day, a new testimony from the Fed's chairman Mr. Ben Bernanke on the economy and feds policy will be eagerly waited, after what happened last week in his first testimony, when he quoted that 'financial turmoil is ongoing' no one blames market traders if the took the greenback down, as we can see dear reader, even policy makers are not able to bail the economy out, neither its own fundamentals with all the spices they tried to cover it with.

Today will be an important day for the world's largest economy, and for traders those had their hopes high at a certain point about the dollar, and might just get disappointed again, and this time, they will not have any mercy regarding the dollar and the U.S. stocks, so we have to be careful, and watch out from every single piece of information to lighten our way.

Crown Forex