Forex traders overcome negative feelings about stress test – The E.U. stress test results have failed to dampen forex traders’ enthusiasm for the euro. At press time (July 26 at 2:20 p.m. in New York), the euro was trading in the neighborhood of 1.30 USD, up approximately 0.72%. Trading sentiment has apparently been influenced by a close look at the latest monthly report on U.S. new housing starts. The Commerce Department reported on July 26 that although annual sales of new homes jumped by 24% in June compared to the previous month, there is no cause for fireworks. The seasonally adjusted June sales figure of 330,000 homes must be seen in relation to the revised figure for May, which was lowered to an annual rate of 267,000. That was the historic low point since recordkeeping began 47 years ago. This did not escape the attention of the forex market.
Continuing U.S. budget deficits seem to be unavoidable – The Obama administration on July 23 released its Mid-Term Review, a revised outlook for the federal budget for both FY 2010 and FY 2011. The newest figures suggest the U.S. economy may, in fact, not escape a double-dip recession, according to some forex traders. The administration is projecting a deficit of $1.47 trillion or 10% of GDP in FY 2010, which ends on Sept. 30. The deficit for FY 2011 is now estimated at $1.42 trillion, which amounts to 9.2% of GDP. Forex market observers believe this admission by the White House is another factor contributing to the July 26 decline of the U.S. dollar versus the euro
Tuesday, August 3, 2010
Monday, August 2, 2010
Housing Starts
Housing Starts are a measure of the number of residential units on which construction is begun each month and the level of housing starts is widely followed as an indicator of residential construction activity.
The indicator is followed to assess the commitment of builders to new construction activity. High construction activity is usually associated with increased economic activity and confidence, and is therefore considered a harbinger of higher short-term interest rates that can be supportive of the involved currency at least in the short term.
The indicator is followed to assess the commitment of builders to new construction activity. High construction activity is usually associated with increased economic activity and confidence, and is therefore considered a harbinger of higher short-term interest rates that can be supportive of the involved currency at least in the short term.
Retail Sales
Retail Sales are a measure of the total receipts of retail stores. Monthly percentage changes reflect the rate of change of such sales and are widely followed as an indicator of consumer spending.
Retails Sales are a major indicator of consumer spending because they account for nearly one-half of total consumer spending and approximately one-third of aggregate economic activity.
Often, Retail Sales are followed less auto sales because these are generally much more volatile than the rest of the Retail Sales and can therefore obscure the more important underlying trend.
Retail Sales are measured in nominal terms and therefore include the effects of inflation. Rising Retail Sales are often associated with a strong economy and therefore an expectation of higher short-term interest rates that are often supportive to a currency at least in the short term.
Retails Sales are a major indicator of consumer spending because they account for nearly one-half of total consumer spending and approximately one-third of aggregate economic activity.
Often, Retail Sales are followed less auto sales because these are generally much more volatile than the rest of the Retail Sales and can therefore obscure the more important underlying trend.
Retail Sales are measured in nominal terms and therefore include the effects of inflation. Rising Retail Sales are often associated with a strong economy and therefore an expectation of higher short-term interest rates that are often supportive to a currency at least in the short term.
Durable Goods Orders
Durable Goods Orders are a measure of the new orders placed with domestic manufacturers for immediate and future delivery of factory hard goods. Monthly percent changes reflect the rate of change of such orders.
Levels of, and changes in, durable goods order are widely followed as an indicator of factory sector momentum.
Durable Goods Orders are a major indicator of manufacturing sector trends because most industrial production is done to order. Often, the indicator is followed but excludes Defence and Transportation orders because these are generally much more volatile than the rest of the orders and can obscure the more important underlying trend.
Durable Goods Orders are measured in nominal terms and therefore include the effects of inflation. Therefore the Durable Goods Orders should be compared to the trend growth rate in PPI to arrive at the real, inflation-adjusted Durable Goods Orders.
Rising Durable Goods Orders are normally associated with stronger economic activity and can therefore lead to higher short-term interest rates that are often supportive to a currency at least in the short term.
Levels of, and changes in, durable goods order are widely followed as an indicator of factory sector momentum.
Durable Goods Orders are a major indicator of manufacturing sector trends because most industrial production is done to order. Often, the indicator is followed but excludes Defence and Transportation orders because these are generally much more volatile than the rest of the orders and can obscure the more important underlying trend.
Durable Goods Orders are measured in nominal terms and therefore include the effects of inflation. Therefore the Durable Goods Orders should be compared to the trend growth rate in PPI to arrive at the real, inflation-adjusted Durable Goods Orders.
Rising Durable Goods Orders are normally associated with stronger economic activity and can therefore lead to higher short-term interest rates that are often supportive to a currency at least in the short term.
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