Intraday Market Thoughts

German Confidence Rise, US Confidence Next

by Patrik Urban
Jan 29, 2013 13:30

German GfK consumer confidence improved; Bloomberg survey projects the FED to buy additional $1.14 trillion; JPY pair weaker; solid Italian auction. Focus turns to real estate market data and consumer confidence. A new edition of the Premium Insights will be issued this evening, ahead of tomorrow's FOMC decision and Friday's NFP release.

Euro gave up some of its recent gains, now trading slightly weaker despite more evidence that points to continued recovery in Germany. GfK consumer confidence inched up in February to 5.8 from previous upwardly revised 5.7. Income expectations and willingness to buy both increased to the best levels since mid 2012. EURUSD trades around 1.3430 and EURGBP dipped to 0.8527.

Bloomberg survey of 44 economists projects that the FED will continue to buy assets worth $85 bln per month until the first quarter of 2014 when the program ends. By that time, asset purchases will reach additional $1.14 trillion.

JPY pairs trade slightly weaker, consolidating large gains from the past few days. Traders are awaiting the FOMC meeting that begins today and concludes tomorrow. USDJPY fell to 90.30 and EURJPY fell to 121.21.

Italy reached a full auction take-up as it sold 6 month BOTs totaling EUR 8.5 bln. The average yield declined to 0.731% from 0.949% and cover rose to 1.65 from 1.57.

US reports are limited to S&P Case Shiller HPI at 9:00 am ET that is expected to rise 5.7% in November from prior 4.3% followed by consumer confidence at 10:00 am ET that is seen slightly lower in January at 64.5 from previous 65.1.

Act Exp Prev GMT
Gfk Consumer Confidence Survey (FEB)
5.8 5.7 5.7 Jan 29 7:00
S&P/CS Home Price Indices (NOV) (y/y)
5.5% 4.3% Jan 29 14:00
CB Consumer Confidence (JAN)
64.0 65.1 Jan 29 15:00
Consumer Confidence (JAN)
-23.9 -26.3 Jan 30 10:00

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