Thread: Forex News from InstaForex

Hi there,

Today's market review depicts following elementary news:
On Friday, US data releases were mixed though were generally disappointing at the margin. December CPI was slightly below forecast, rising just 0.1% m/m with core also up 0.1% m/m though year-on-year comparisons ticked sharply higher as a result of higher oil prices.

Friday’s Lows & High
EUR/USD – 175 pips (1.4336-1.4511); AUD/USD – 99 pips (0.9215-0.9314);
USD/CAD – 20 pips (1.0270-1.0290); GBP/USD – 34 pips (1.6288-1.6322).

Thank you for your interesting review.

Euro Mixed Against Majors Amid German PPI.


The German PPI for December was released at 2:00 am ET. Amid the report, the euro showed mixed trading against other major currencies. While the euro gained against the franc, it fell against the dollar and the yen. Against the pound, the euro was little changed.


As of now, the euro is worth 1.4203 against the greenback, 129.43 versus the yen, 1.4744 versus the Swiss franc and 0.8709 versus the pound.


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The United Kingdom is scheduled to release public sector finance and money supply data on Thursday. The Flash Purchasing Managers' Index reports for major Eurozone economies are also due.

At 3:00 am ET, the Swiss central bank is scheduled to release money supply data for December. M3 money supply had increased 7.6% annually in November.

The release of the Flash Purchasing Managers' Index reports for major Eurozone economies is set to start at 3.00 am ET. The first one expected to hit the wires is the Flash French PMI for both manufacturing and service sectors. The manufacturing PMI is forecast to remain unchanged at 54.7 in January, while the services PMI is expected to rise to 59 from 58.7.

Thereafter, Flash German PMI data is due at 3.30am ET. Economists expect manufacturing PMI to climb to 52.9 from 52.7, while the services PMI is seen at 53, up from 52.7.

In the meantime, the Statistics Denmark is expected to release consumer sentiment data for January. The index is seen at minus 0.8, up from minus 3.6 in the preceding month.

Consumer sentiment data is also due from the Dutch statistical office, along with unemployment figures. Economists expect the jobless rate to edge up to 5.4% in the October to December period.

At 4:00 am ET, Eurozone's PMI report is also due. The manufacturing PMI is expected to stand at 51.9 compared to 51.6 in December, while the services PMI is forecast to rise to 53.8 from 53.7.

The U.K.'s money supply data is due from the Bank of England at 4:30 am ET. M4 money supply is forecast to rise by 8.9% on a yearly basis and by 0.9% on a monthly basis. The U.K.'s public finance report is also due at the same time. Public sector net cash requirement is seen at GBP 25.5 billion compared to GBP 14.7 billion in November.

Afterwards at 6:00 am ET, the Confederation of British Industry is set to release January's Distributive Trade Survey results.

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Eurozone Industrial New Orders Grow More Than Initially Estimated


Monday, Eurozone statistical office Eurostat revised industrial new orders data after Germany's Federal Ministry of Economics and Technology revised the country's new order data on January 22 to show better growth figures.

According to the revised report, Eurozone industrial new orders rose 2.7% month-on-month in November after a revised fall of 2.1% in October. The most striking improvement was the slowdown in annual decline to just 0.5% from October's 14.5% fall.

In an earlier release published on January 22, the Eurostat said industrial new orders rose 1.6% month-on-month in November, taking the annual decline to 1.5%. On the same day, official report showed that new orders to German industries grew 2.8% month-on-month in November, a revision from just 0.2% rise reported on January 7. It follows a 1.9% decline in October. November's annual growth was revised to 4.5% from 1.8% rise initially published.

Today's report showed that new orders for intermediate goods increased by 2.3% in the euro area and those for capital goods rose by 1.1%. Orders for durable consumer goods gained 0.6% and those for non-durable consumer goods grew by 0.8%.

Industrial new orders for EU27 rose 2.6%, a revision from 1.8% growth reported initially. It follows a revised 2.1% decline in October. Annually, the decline in November was 1.2%, revised from 2% fall previously reported and follows a revised 14.2% drop in October.

Among the member states for which data were available, total manufacturing orders rose in fifteen and fell in eight. The highest increases were registered in Austria, Estonia and Greece, while the largest decreases were in Hungary, Ireland and Bulgaria.

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Monday, Eurozone statistical office Eurostat revised industrial new orders data after Germany's Federal Ministry of Economics and Technology revised the country's new order data on January 22 to show better growth figures.

According to the revised report, Eurozone industrial new orders rose 2.7% month-on-month in November after a revised fall of 2.1% in October. The most striking improvement was the slowdown in annual decline to just 0.5% from October's 14.5% fall.

In an earlier release published on January 22, the Eurostat said industrial new orders rose 1.6% month-on-month in November, taking the annual decline to 1.5%. On the same day, official report showed that new orders to German industries grew 2.8% month-on-month in November, a revision from just 0.2% rise reported on January 7. It follows a 1.9% decline in October. November's annual growth was revised to 4.5% from 1.8% rise initially published.

Today's report showed that new orders for intermediate goods increased by 2.3% in the euro area and those for capital goods rose by 1.1%. Orders for durable consumer goods gained 0.6% and those for non-durable consumer goods grew by 0.8%.

Industrial new orders for EU27 rose 2.6%, a revision from 1.8% growth reported initially. It follows a revised 2.1% decline in October. Annually, the decline in November was 1.2%, revised from 2% fall previously reported and follows a revised 14.2% drop in October.

Among the member states for which data were available, total manufacturing orders rose in fifteen and fell in eight. The highest increases were registered in Austria, Estonia and Greece, while the largest decreases were in Hungary, Ireland and Bulgaria.

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The dollar remained mixed versus other major currencies Thursday morning in New York, holding yesterday's gains versus the euro and yen while ceded a bit of ground against the sterling and loonie.

Traders were looking ahead to key data on the jobs situation and manufacturing sector, following Wednesday's decision by the Federal Reserve to maintain its key lending rate near zero.

The Labor Department is due to release its customary jobless claims report for the week ended January 23rd at 8:30 AM ET. Economists expect a decline in claims to 450,000. Lingering weakness in the jobs market compelled the Fed to reiterate it will keep rates at record low levels for an extended period yesterday.

The Commerce Department is set to release its durable goods orders report, which gives the value of orders placed for goods designed to last for more than 3 years, at 8:30 AM ET. Economists look forward to a 2% increase in durable goods orders for December.

The dollar leveled off versus the euro after hitting a fresh 5-month high of 1.3935 last night. Against the yen, the buck was steady at Y90.25, an improvement from a monthly low near Y89 set earlier in the week.

The number of unemployed in Germany rose in January, ending declines in past six consecutive months, as heavy snowfall and freezing temperatures hurt the country's labor market.

The seasonally adjusted number of unemployed increased by 6,000 month-on-month to 3.43 million in January. But, the increase was less than the expected 15,000. The rise in January follows a drop of 3,000 in the previous month.

Eurozone economic sentiment rose for the tenth successive month, a survey conducted by the European Commission showed Thursday. The economic confidence index stood at 95.7 in January, up from a revised reading of 94.1 in the previous month. The expected reading was 92.3.

Meanwhile, retail sales in Japan fell 0.3 percent on year in December, the Ministry of Economy, Trade and Industry said on Thursday. That missed forecasts for a 0.3 percent annual gain after the revised 1.1 percent contraction in November.

The dollar continued to show a lack of direction versus the sterling, easing to 1.6265. The pair has bounced back and forth between 1.6100 and 1.6300 for the past week.

With commodity prices stabilizing this morning, the dollar gave back some of its recent gains versus its Canadian counterpart, slipping a Canadian penny from yesterday's monthly high near C$1.0680.

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Eurozone inflation and unemployment rate rose less than expected, giving time to the central bank to pursue a gradual exit from stimulus measures.

Friday, the flash estimate from the Eurostat showed that consumer price inflation in the euro area edged up to 1% in January from 0.9% recorded in December. Economists had forecast the rate to rise to 1.2%. The statistical agency is set to release a final report on January inflation on February 26.

According to economists, the January increase was led by energy prices. However, the Eurozone inflation is much lower than the rates of nearly 3% in the U.K. and the U.S., due to a stronger euro.

"This increase is essentially due to energy prices, which are now clearly rising on a year-on-year basis," said ING economist Peter Vanden Houte. The economist expects headline inflation to move further moderately as the decline in food prices eases. However, underlying price pressures remain muted and this will allow the European Central Bank to wait-and-see until the fourth quarter of this year, he said.

In January, the ECB has kept its key interest rate unchanged at a record low of 1% for an eighth straight month. It aims to keep inflation below, but close to, 2% over the medium term. In view of the progressing economic recovery, the central bank have started removing some of its emergency measures as its policymakers feel such measures are not needed at the same extend it required at the height of the crisis.

According to Commerzbank's Rainer Guntermann, high overcapacities in the corporate sector and rising unemployment will also dampen the pressure on prices in the foreseeable future. The analyst said inflation is unlikely to change ECB's current monetary policy plans in the foreseeable future.

In a separate release, the statistical agency revealed that the seasonally adjusted jobless rate rose to 10% in December from a downwardly revised 9.9% in November. The current rate is the highest since August 1998. Economists were looking for a rate of 10.1%. The number of unemployed stood at 15.76 million in December, up from 15.67 million in November.

"Unemployment may now be close to a peak, but the rises seen over the last year could still bear down strongly on wage growth over the coming months, helping to keep inflation subdued," said Jonathan Loynes, chief European economist at Capital Economics. "The ECB has good reason to be more dovish than both the Fed and the Bank of England," he added.

The jobless rate for the EU27 edged up to 9.6% from 9.5%. Among the member states, the lowest unemployment rates were recorded in the Netherlands followed by Austria, while Latvia and Spain observed the highest rates.

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Trichet Repeats Eurozone Recovery Would Be Uneven

The recovery process in the Eurozone economy is likely to be uneven, European Central Bank President Jean-Claude Trichet said Thursday, after the central bank retained key interest rate at a record low of 1%.

In his introductory statement, Trichet said this outlook remains subject to uncertainty. The outcome of the monetary analysis confirms the assessment of low inflationary pressure over the medium term, he added.

He noted that the the euro area has been benefiting from a turn in the inventory cycle and a recovery in exports, as well as from the significant macroeconomic stimulus under way and the measures adopted to restore the functioning of the financial system.

But, he asserted that these stimuli will unwind over time, while activity is likely to be adversely affected by the ongoing process of balance sheet adjustment in the financial and non-financial sectors, both inside and outside the euro area. Additionally, low capacity utilization rates are likely to dampen investment, and unemployment in the euro area is expected to increase somewhat further, thereby lowering consumption growth.

On prices, the central banker said inflation is expected to be around 1% in the near term and to remain moderate over the policy-relevant horizon. Trichet also said inflation expectations over the medium to longer term remain firmly anchored in line with the Governing Council's aim of keeping inflation rates below, but close to, 2% over the medium term.

He repeatedly urged banks to use the improved funding conditions to strengthen their capital bases further and, where necessary, take full advantage of government support measures for recapitalization.

Further, he pointed out that many euro area countries are faced with large, sharply rising fiscal imbalances. "It is of paramount importance that the stability programme of each euro area country clearly defines the fiscal exit and consolidation strategies for the period ahead," Trichet said. He urged countries to focus more on expenditure reforms.


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Friday, the Department of Statistics Malaysia announced that the trade surplus stood at MYR 12.1 billion in December, up from MYR 8.88 billion in November. This was the 146th consecutive month of trade surplus since November 1997. Economists expected a trade surplus of MYR 9.35 billion for December.

Exports increased 9.2% month-on-month to MYR 54.67 billion in December from MYR 50.07 billion in November. This was the highest monthly exports for 2009. At the same time, imports climbed 3.4% to MYR 42.58 billion.

On an annual basis, exports increased 18.7% in December, compared to the 3.3% fall in the previous month. Economists were looking for an increase of 12.5%. Meanwhile, imports grew 23.3% in December, faster than the 2.3% increase in November. Economists expected an increase of 21.5%.

In the fourth quarter, exports grew 10.6% sequentially to MYR 159 billion, while imports rose 8% to MYR126.55 billion. Year-on-year, exports and imports increased by 5.1% and 6.7%, respectively.

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