Eurozone Retail Sales up by 0.2% in July

Posted on Monday, September 5th, 2011 at 3:14 pm in Market View by superadmin.

Worldwide currencies data to look out for

Eurozone Retail Sales was expecting a fall to -1.0% but when figures were released it took a positive turn surprising markets as the 0.2% index expanded sales index for July, from the previous of 0.9% and above the steady expected estimate. Analysts were expecting the data to reveal worsening conditions which has today strengthened the markets.
US Labor Day bank holiday is being enjoyed today so there are no announcements due in from the US.

ELSEWHERE

In the US, further talk of QE was spurred on by completely flat Nonfarm Payrolls growth on Friday. Market participants had been hoping for an increase of around 75k but after ADP employment failed to meet expectations earlier in the week it came as little surprise when NFP was as bad as it was.
Worry in Germany as chancellor Angela Merkel’s ruling party is losing support over their handling of the EU sovereign debt crisis.
Over the weekend an unnamed ‘senior’ IMF official has stated that Greece will face a ‘hard default’ by March 2012.
The IMF have warned the US and Europe that stimulating the economies is more important that tight austerity measures. Fears are, the restrictive monetary policy could lead to a downward spiral in the whole global economy.
The poor US jobs data combined with political and financial issues in Europe have caused a surge in risk aversion, helping the US dollar to strengthen as the Asian markets open this morning. GBPUSD down to 1.6126 and EURUSD down to 1.4140.
Adding more woes to Swiss finance ministers the recent turn around in risk has undone the work last month to weaken the Swiss franc. EURCHF falls to lows of 1.10 and GBPCHF is back into the 1.26’s
The RBA meet to decide Australian interest rates tomorrow, there is a small chance they will be cut however most are expecting them to remain on hold.

IN THE UK

On Friday in the UK, PMI Construction fell to 52.3 in August from 53.5, the drop came as a disappointment because the sector had begun to show signs of improvement.
Investor eyes turn to the Bank of England interest rate meeting later this week, more out of habit than anything else as rates are highly unlikely to be raised and although the discussion continues on QE, additional QE is also unlikely.
Media says that shadow MPC have voted 5-4 in favour of a rake hike to curb inflation
This morning PMI Services fall dramatically below consensus, posting a figure of 51.1 against expectations of 54.3. The pound.

Key Support and Resistance Levels
	Support			Resistance
GBPUSD	1.6000	1.6110	1.6365	1.6550	1.6615	1.6750
GBPEUR	1.1013	1.1217	1.1344	1.1494	1.1628	1.1723
EURUSD	1.3840	1.3975	1.4100	1.4300	1.4550	1.4700