Economic Events: (GMT)

07:00     CHF        Trade Balance                                                                 2.85B                     2.95B

The Trade Balance measures the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported.

A higher than expected reading should be taken as positive/bullish for the CHF, while a lower than expected reading should be taken as negative/bearish for the CHF.

09:30     GBP       Construction PMI                                                           52.9                        53.2

The Chartered Institute of Purchasing and Supply (CIPS) Construction Purchasing Manager's Index (PMI) measures the activity level of purchasing managers in the construction industry. A reading above 50 indicates expansion in the construction industry; a reading below indicates contraction. It gives an indication about the health of the construction section in the UK. Traders watch these surveys closely as purchasing managers usually have early access to data about their company's performance, which can be a leading indicator of overall economic performance. 

A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP                            

10:00    EUR       PPI (MoM)                                                                         -0.1%                     0.2%

The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, which accounts for the majority of overall inflation.

A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

13:30     USD       Nonfarm Productivity (QoQ)                                      1.0%                      2.3%     

Nonfarm Productivity measures the annualized change in labor efficiency when producing goods and services, excluding the farming industry. Productivity and labor-related inflation are directly linked-a drop in a worker's productivity is equivalent to a rise in their wage.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.           

 13:30    USD       Initial Jobless Claims                                                    373K                      377K

 13:30    USD      Unit Labor Costs (QoQ)                                                  0.9%                      -2.5%                    

 13:30    USD      Continuing Jobless Claims                                          3565K                    3554K     

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance.       

EUR/USD

EUR/USD Fundamental Analysis Feb. 2, 2012, Forecast

Analysis and Recommendations:

The EUR/USD traded over the 1.3200 figure hitting a high of 1.3202 but could not sustain the move and plunged to a low of 1.3027 before leveling off at 1.3174

The euro was able to pick up momentum again after falling below the 1.30 mark when the ADP payroll report was released in the US. The report showed the addtion of jobs in both the public and private sector but were below esimates.

Employment in the U.S. nonfarm private business sector increased by 170,000 from December to January on a seasonally adjusted basis. The estimated advance in employment from November to December was revised down to 292,000 from the initially reported 325,000. Employment in the private, service-providing sector rose 152,000 in January

European manufacturing PMI reports all surprised today coming in above forecast. German also came in above forecast.

There is still no agreement in Greece and now the new plan offers creditors incentives based on improved GDP for Greece.

An aide said: The prime minister is meeting troika representatives on Friday and wants to ram home the message of how urgent things are following our discussions in Brussels.....This is not going to be an easy week.

Time is short. Athens faces €14.5bn in bond repayments on March 20. The goal is to hammer out a deal for a second package of rescue funds worth €130bn, and the private sector bond swap deal that will wipe €100bn from Greece's debt, ready for at a Eurogroup meeting of finance ministers on Monday.

The euro will stay close to the 1.30 range unless the US unemployment data on Thursday is disasterous.

Today's Economic Reports Results

GBP       Nationwide HPI (MoM)                     -0.2%                  -0.1%                     -0.2%      Unexpected Drop           

CHF        Retail Sales (YoY)                          0.6%                     1.6%                      1.8%       Unexpected Drop           

CHF        SVME PMI                                         47.3                       51.8                        49.1        Unexpected Drop

EUR        French Manufacturing PMI             48.5                        48.5                        48.5                                       

EUR        German Manufacturing PMI         51.0                       50.9                        50.9         Above Forecast              

 EUR       Manufacturing PMI                         48.8                       48.7                        48.7         Above Forecast              

 GBP      Manufacturing PMI                          52.1                       50.1                        49.7        Above Forecast               

 EUR       CPI (YoY)                                           2.7%                     2.7%                      2.7%

Scheduled Sovereign Bond Sales

Feb 01  15:30  Sweden  Details nominal bond auction on Feb 08

Feb 01  16:00  US

Announces details of 3Y Notes on Feb 07, 10Y Notes on Feb

08 & 30Y Bonds on Feb 09

Feb 02  09:50  France  OAT Auction

Feb 02  10.30  UK  Auctions 0.125% 2029