Intraday Market Thoughts

Busy Week Ahead, Webinar Link & Latest on Premium

by Patrik Urban
Jul 30, 2012 12:41

Big week ahead; Spanish GDP worse; European business climate falls; UK mortgage approvals lower and CBI realized sales fell; Italian auction. 5 trades from Thursdays Premium Insights hit all targets, 3 in progress and 3 unfilled. Dont forget to register for Ashrafs Thursday webinar (Post FOMC & Pre-NFP) with Fari Hamzei & George Cavaligos. See link below.

USD mixed in the ongoing session. It is weaker against JPY and commodity dollars and slightly stronger against EUR, CHF and GBP. European equities are gaining nearly 1% and the relative strength winner is AUD.

This will be a busy week with key events being the FOMC, ECB and BOE decisions along with US jobs report on Friday. The ECB president Draghi's comments that sent EUR higher last week laid ground for some sort of easing policy (LTRO3, rate cut, bond buying via SMP) and if the market does not get it, the sentiment improvement may prove to be short lived. The FOMC meets one day ahead of the ECB which could, unless a new coordinated action is announced, put it in a difficult position. The market is currently pricing the probability of a 25 bps cut by the ECB at 17%.

European data showed that Spanish Q2 GDP slowed to -0.4% from -0.3% q/q (-1.0% from -0.4% y/y) and Eurozone business climate worsened in July to -1.27 from -0.95. Yet, Spanish 10 year yield continues to decline and currently trades around 6.58%. EURUSD trades slightly lower around 1.2275.

In the UK, lending to individuals declined sharply in June to GBP 0.3 bln from previous GBP 1.1 bln, mortgage approvals slumped in June to 44K from 51 in May and CBI realized sales fell in July to 11 from previous 17. GBPUSD trades lower around 1.5695.

Italy sold bonds with various maturities totaling EUR 5.48 bln vs. 5.5 bln target. Average yields declined but cover was mainly lower as well.

Data calendar for the US session is limited to Dallas FED manufacturing that is due at 10:30 am ET and it is expected to decline sharply in July to 2.5 from previous 5.8.

Ashrafs Thursday Joint webinar with Fari Hamzei & George Cavaligos at 15:00 Chicago, 16:00 New York, 21:00 London Register here:


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