Thursday September 30, 2004 - 10:01:24 GMT
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FOREX: US OPEN MARKET POINTS 09-30-04
Lot’s of heat, little light. After 19 economic reports in the Euro-zone tonight, the EUR/USD remained practically motionless trading in a 20 pip range as the data failed to inspire either bulls or bears to take a stance. The most telling aspect of tonight’s releases is the muted nature of prices in the Euro-zone. Despite $50/bbl oil French CPI, Italian CPI and yesterday German CPI figures all printed within 20 basis points of ECB 2% yearly target. Much as we would like to believe that such tight price control is a function of producers ability to contains costs, the results we fear, reflect producers inability to raise prices in the face of very lackluster Euro-zone consumer demand. Indeed, with 32,000 added to its unemployment rolls, France – Europe’s 2nd largest market – is unlikely to demonstrate robust growth any time soon.
With overnight eco data hardly euro bullish and the pair seemingly stalled at the 2350 level we would not be surprised to see some sort of retracement, especially if the US data later today surprises to the upside or even simply meets expectations. The critical US session release today will be the Personal Income number. Should it just come in line at 0.4% the report would be the first indication that the benefits of US economic growth are finally tickling down to workers. After last month’s horrendous gap between personal income and personal spending of –0.7%, the figures for August would go a long way in assuaging dollar bulls should they meet consensus.
One other important release to keep an eye on will be Chicago PMI due 14:00 GMT. The number at 57.7 is not expected to be materially different from last months reading. However, this release often presages the national ISM number due Friday. Should Chicago PMI significantly miss expectations it may unwind the goodwill generated by Personal Income report.
Meanwhile, having failed to generate its own positive momentum tonight and absent any new developments in the oil market, the euro falls back into its familiar role as the “anti-dollar” and once again becomes victim to the vagaries of US economic data.
FX Spot Overnight
- EUR trades 20 point range and surprisingly holds 2320 despite somewhat soft eco data
- JPY firms versus the greenback breaking 111 as Nikkei finally rallies for first time in 10 days
- GBP loses the 8000 handle although housing data mildly positive
- CHF muted inflation numbers have little effect as pair trades 20 pip range
12:30GMT – (8:30 AM EST) USD Personal Income (August) Expected at 0.4%, Previous 0.1%
12:30GMT – (8:30 AM EST) USD Personal Spending (August) Expected at 0.1%, Previous 0.8%
12:30GMT – (8:30 AM EST) USD PCE Deflator y/y (August) Expected at , Previous 2.4%
12:30GMT – (8:30 AM EST) USD PCE (Core) y/y (August) Expected at, Previous 1.5%
12:30GMT – (8:30 AM EST) USD Initial Jobless Claims (Sept 25) Expected at 350K, Previous 350K
12:30GMT – (8:30 AM EST) CAD GDP m/m (July) Expected at 0.3%, Previous 0.3%
14:00GMT – (10:00 AM EST) Help Wanted Index (August) Expected at 38, Previous 37
14:00GMT – (10:00 AM EST) Chicago PMI (Sep) Expected at 57.7, Previous 57.3
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