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202786 Resource 128466 128654 128654 1209714795537 1209714795537 Controlled European Mid Morning Update 2nd May 2008

The waiting week draws to a close…

Releases from Europe:March                                    Forecast    Actual German Retail Sales     (MoM)    +0.6%    - 0.1% German Retail Sales      (YoY)    - 2.3%    - 6.3% French Producer Prices   (MoM)    +0.5%    +0.5% French Producer Prices    (YoY)    +5.1%    +5.2%April Swiss SVME PMI                            55.0       56.7 Little movement seen in early Europe even following the rather poor German retail sales number which saw the YoY pace weaken further to -6.3%. It does heighten the fact that consumers worldwide are holding their purses close to their chest as households impose a stricter spending budget. As the credit crunch eases somewhat this is the next hurdle to overcome but is not anything central banks can do. It does require fiscal policy as the States are putting in place now. However, the difference between the States and Europe is that the credit crisis and housing woes are not so dire as to try and prop up the economy while inflation is high. Just a thought but it could be a case of the chicken and the egg again…The following economic releases are due today:March U.S. Factory Orders  (MoM) +0.2%April Italian Manufacturing PMI                       48.8 French Manufacturing PMI                       51.5 German Manufacturing PMI                     53.6 Euro-zone Manufacturing PMI                  50.8 U.K. Construction PMI                            47.0 U.S. Change in Non-Farm Payrolls          - 78K U.S. Unemployment Rate                      5.2% U.S. Change in Manufacturing Payrolls    - 35K This week the market has waited patiently for the States’ Q1 GDP, then for the FOMC decision, again yesterday for the ISM and today it maintains its waiting game for the non-farm payroll numbers. However, over the week the Dollar has retained a firm undertone. The question today is whether it can maintain these gains which 3 months ago would have seemed inconceivable. The data release in question is quite critical with consumer demand the last resort to regenerating a sustainable level of growth.The past few months has seen a steady rise in jobless claims and general reluctance by firms to hire. This is raising the problem of lower consumer confidence and a drop in spending.Last night’s consumer spending numbers at least showed a potential for stability but with the housing market still causing tremendous pain across the country and inflation sapping the ability to purchase goods the risks are there to be seen.Before we get to the U.S. figures we need navigate the European manufacturing PMI figures. The past month has seen the manufacturing area come under much greater negative sentiment. Both German IFO and ZEW surveys posted much larger declines that expected on the back of wavering consumer confidence.Poor number should help the Dollar rally further. However, it is also really difficult to see how the non-farm payrolls can be positive for the Dollar. While the Dollar has staged a recovery there still hasn’t been much apart from hopes that H2 will be better for the U.S. economy. However, even if the fiscal stimulus checks have been posted it will take some while for the impact to make much of a difference. Hence while the Dollar could gains a little more it does seem to have enough fire power to maintain the rally at t his point. Note important support and resistance areas:           USDJPY        EURUSD       USDCHF       GBPUSD Res:  105.83-18    1.5642-73    1.0568-01    1.9964-97 Res:  105.01-35    1.5495-30    1.0485-07    1.9888-08Spt:   103.75-15    1.5429-45    1.0447-64    1.9750-84 Spt:   103.20-25    1.5340-60    1.0378-05    1.9686-11 9 application/xml false currencies Fed Forex French FX German interest rates jobless claims manufacturing PMI producer prices retail sales unemployment US Want to know more about the Forex market? Read about the largest global market http://www.gftforex.com/land/index.asp?aid=446 Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322) 127.0.0.1 127.0.0.1 ICopsey 122.21.255.181 false true false false true 128466 blog blogsite/GFTForex/web