Euro-Zone CPI-Estimate fell to -0.1% from a flat reading in May. The negative reading will raise some deflation concerns but failed to change the stance of the ECB which has deemed the current 1.00% benchmark rate as appropriate. The German unemployment rate rising to 8.3% as layoffs totaled 31,000 in June will also raise some red flags.
[B]Fundamental Headlines[/B]
• [I]Car-Sales Rebound Seen for June[/I] – Wall Street Journal
• [I]UK Economy Shrinks Most in 50 Years [/I]– Financial Times
• [I]Japanese Jobless Data Jumps to New High[/I]– Financial Times
• [I]Lloyds Banking Set to Cut 2,100 Jobs in Group Operations, Wholesale Units [/I]– Bloomberg
• [I]AIG Warns of `Material Adverse Effect’ Should European Swap Values Decline [/I]– Bloomberg
[B]EURUSD[/B] – Euro-Zone CPI-Estimate fell to -0.1% from a flat reading in May but missed expectations of -0.2%. The negative reading will raise some deflation concerns but failed to change the stance of the ECB which has deemed the current 1.00% benchmark rate as appropriate. Therefore, expect the central bank to leave rate unchanged at Thursday policy meeting. The German unemployment rate rising to 8.3% as layoffs totaled 31,000 in June will also raise some red flags. Yet, economist were expecting a job loss of 45,000 which is another sign that he economy may be stabilizing. Discuss the topic and your trade ideas in the EUR/USD Forum.
[B]GBPUSD[/B] – The final U.K. 1Q GDP was revised lower to -2.4% from the preliminary reading of -1.9% which was more that the -2.1% that economist were forecasting. The fourth straight contraction pulled the annualized reading to -4.9% from -4.1%. Household consumption and business investment fell 1.3% and 4.9% respectively which may limit the scope of a potential recovery. Additionally, consumer confidence remained unchanged at -25 dimming prospects of domestic demand. Meanwhile, U.K. house price rose by 0.9% according to Nationwide LLC. However, those results contradicted other reporting agencies which showed a reduction. The U.K. economy continues to show signs of stabilization, but a recover still remains uncertain and we could see flat growth for sometime if credit markets begin to tighten again and housing fails to rebound. Discuss the topic and your trade ideas in the GBP/USD Forum.