Intraday Market Thoughts

Eurozone CPI at 3-yr High, Retail Sales Next

by Patrik Urban
Oct 14, 2011 12:45

Eurozone annual CPI at three years highs; Eurozone Trade deficit narrows. G20 meeting may consider boosting IMF lending capacity; PM Berlusconi faces a confidence vote. Market turns to Retail sales, UoM Consumer confidence and Canadian Manufacturing sales. Ashraf's Premium Trades are in progress.

USD trades on the defense as risk currencies consolidate near yesterday's highs. European equity markets are in the positive territory.

Eurozone annual CPI surged in September to 3% from 2.5% in August which is the highest print in three years. Core CPI rose to 1.6% from 1.2%. Accelerating housing and transport costs are blamed for the increase.

Eurozone trade deficit narrowed to EUR -1 bln from previous EUR -3.7 bln as exports rose sharply.

G20 meeting in France starts today and continues till tomorrow. DJ reports that a boost to the IMF's lending capacity is being considered as a way to help dealing with the Eurozone crisis. However, officials note that credible and workable plan for dealing with the crisis must be presented before any agreement is possible.

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In Italy, PM Berlusconi faces a confidence vote after 7:30 am ET. If his government does not survive, the common currency could be hit as uncertainty is one of the things that markets do not take well.

The NY session kicks off at 8:30 am ET with September Retail sales are expected to jump 0.5% from an unchanged print in August. Core sales are also seen higher at 0.2% from 0.1%.

Canada's National Statistical Agency releases August Manufacturing sales at the same time and a steep decline to 0.5% from previous 2.7% is anticipated. However, this indicator often shows high volatility so such large changes are not uncommon.

October UoM Consumer confidence is due at 9:55 am ET and is seen slightly higher at 60.2 from previous 59.4. Over the past two months consumer confidence has been revised higher so an improvement is more likely to some degree.


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