|German Trade Balance||15.7B||17.9B||16.9B|
|French Industrial Production||-1.2%||-0.1%||0.9%|
|EU Industrial Production||-0.4%||-0.1%||0.9%|
|EU Employment Change||-0.3%||-0.1%||-0.1%|
It is pretty clear that the last week economic data releases were bad. Leaving aside the CPI which came as expected, 1.8%, every other indicator was under the analyst’s forecasts. Despite these results the Euro managed to gain 0.66 percent in front of the US dollar.
The up move was based on good news coming from the Eurogroup Meeting where the Finance Ministers tried to find solutions to help Cyprus. They agreed to extend the maturities on the rescue loans given to Ireland and Portugal. They will give money for bailout, but with the condition that the deposits to be taxed: with 9.9% if they are over 100k Euros, under this sum, they will be taxed with 6.7%. The Cypriot president bowed to the EU demands. Risk aversion has come back and the euro weakened.
Next week a bigger number of indicators will be published, but the most important ones will be the German Zew Economic Sentiment expected 47.9, EU’s Current Account, German 10-y Bond Auction and the Flash PMIs.
|Core Retail Sales/Retail Sales m/m||1.0%/1.1%||0.5%/0.5%||0.4%/0.2%|
|Core CPI/CPI m/m||0.2%/0.7%||0.2%/0.6%||0.3%/0.0%|
|Prelim UoM Consumer Sentiment||71.8||78.2||77.6|
US real economy seems to signal a recovery. Retail Sales were published over estimates; the same was for the import prices. Unemployment Claims dropped 10.000 this month, hitting a new low at 332k. The CPI is still under control, it rose 0.7% from last month and the University of Michigan Consumer Sentiment was under the analyst estimates.
The dollar lost some ground in the end of the week because the latest inflation report showed that the risk is contained and FED can go on with quantitative easing program. This triggered reversals in the downtrends of GBPUSD, AUDUSD, USDCAD and also EURUSD.
Next week new important indicators will be published for USA, such as: Building Permits which is expected at 0.93M, FOMC Statement and Unemployment Claims estimated at 343k. Existing Home Sales is forecast at 5.03M, better than the previous one, and Philly Fed Manufacturing Index expected by the analysts at -3.1.
EURUSD has hit a low at 1.2908 but managed to come back and close the week at 1.3115. Today’s opening was under the latest low, at 1.2899, Euro dropped because the problems from Cyprus. We may expect a closing of the gap for today, but the trend remains bearish as long as we will have lower highs and lower lows.