Please note this will be the last report until the New Year.
Best wishes for a happy holiday and peaceful, happy and prosperous 2008.
Early European releases:
November Forecast Actual
German Import Price Index (MoM) +0.5% +0.7%
German Import Price Index (YoY) +3.3% +3.5%
French Consumer Spending (MoM) +0.6% - 0.1%
French Consumer Spending (YoY) +3.0% +2.4%
French Producer Prices (MoM) +0.5% +0.8%
French Producer Prices (YoY) +4.0% +4.2% December
French Business Confidence Indicator 109.0 110.0
French Production Outlook Indicator 0.0 4.0
That German and French Import Price Index come as no surprise, but note that the German rise is the strongest annual rise since September last year. Both figures clearly provide a strong message about costs and will keep the market champing at the bit…
Note for January 2nd:
ECB: Hike rates…
Market: Sell Dollars…
And if the French Budget Minister, Eric Woerth, still thinks his forecast of +2.0%-2.25% growth is possible next year then the November consumer spending numbers will come as a nasty wake up call. Expected higher by +0.6% MoM but released at -0.1% which will take France into 2008 on a rather depressed note.
The forecast by Eric Woerth was placed under question before the release by the IMF Managing Director Dominique Strauss-Kahn who said that France will find the target “hard to meet.” However, the Business Confidence Indicator remained stable in December with production outlook rising to +4, both above forecasts. Well, it remains to be seen but whatever, the above note for the 2nd January remains…
The following economic releases are due today:
October
Euro-zone Industrial New Orders (MoM) +2.0%
Euro-zone Industrial New Orders (YoY) +6.5% November
U.K. Retail Sales (MoM) +0.2%
U.K. Retail Sales (YoY) +4.4%
U.S. Personal Income +0.5%
U.S. Personal Spending +0.6%
U.S. Core PCE (MoM) +0.2%
U.S. Core PCE (YoY) +2.0% December
French Business Confidence Indicator 109.0
French Production Outlook Indicator 0.0
Italian Business Confidence 91.8
U.S. University of Michigan Confidence 75.0
This the last real trading day before Christmas. All information is being stored in the drawer ready for the New Year.
It’s boring repeating the same thing, but it’s been right all this week. Despite the sharp pullback lower in the Dollar in early Europe, Dollar repatriation will continue to push the Dollar gradually higher over the coming week. There is a little more Dollar downside to go – close to recent corrective lows, but it should be sustainable. Beyond there should be one more high but we’ll soon come to exhaustion point for the Dollar’s miracle (but expected) recovery and it shouldn’t take too long in the New Year for the market to renew it’s love affair for selling Dollars.
Note important support and resistance areas:
USDJPY EURUSD USDCHF GBPUSD
Res: 114.16-64 1.4490-29 1.1655-79 1.9977-14
Res: 113.35-58 1.4434-50 1.1596-24 1.9907-43 Spt: 112.90-95 1.4350-64 1.1500-10 1.9808-40
Spt: 112.02-49 1.4308-12 1.1440-77 1.9714-40 | 
