USD/CHF Fundamental Analysis February 27, 2012, Forecast

By Roger Baettig | February 24 2012 1:01 PM

Economic Events: (GMT)

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Monday will be a relatively quiet day for economic data

07:00 EUR GfK German Consumer Climate

The Gfk German Consumer Climate Index measures the level of consumer confidence in economic activity. The data is compiled from a survey of about 2,000 consumers which asks respondents to rate the relative level of past and future economic conditions.

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.

10:30 CHF KOF Leading Indicators

The KOF Leading Indicators Index is designed to predict the direction of the economy over the following six months. The index is a composite reading of 12 economic indicators related to banking confidence, production, new orders, consumer confidence and housing.

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.

11:00 GBP CBI Distributive Trades Survey

The Confederation of British Industry (CBI) Distributive Trades Survey (DTS) measures the health of the retail sector. The reading is compiled from a survey covering 20,000 firms responsible for 40% of employment in retailing. It includes measures of sales activity across the distributive trades. It is a leading indicator of consumer spending. The figure is the difference between the percentage of retailers reporting an increase in sales and those reporting a decrease.

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.

15:00 USD Pending Home Sales (MoM)

The National Association of Realtors (NAR) Pending Home Sales Report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction.

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.

Analysis and Recommendations:

The USD/CHF trading at 0.8952, the U.S. dollar is plunged against its trading partners as the euro shot up to about three months as investors eyed next week's long-term liquidity operation by the European Central Bank as a cue to bet on riskier assets.

Liquidity combined with a willingness to turn a blind-eye to Greek problems is helping fuel this rally not only in stocks but in peripheral bond yields and also in the euro

The sale of new single-family homes in the U.S. fell slightly in January, but only because sales in December were revised higher. Taken together, sales in those two months were the strongest in a year, a good sign for a market that's been in a deep slump since the 2007-2009 recessions.

Consumer sentiment rose in February to the highest level in a year on strong awareness of improving employment, according to a gauge released Friday by the University of Michigan

Consumer sentiment rose to 75.3 in February from 75 in January, achieving a sixth month of improvement. Consumers' expectations rose to 70.3 from 69.1, while their views on current conditions declined to 83 from 84.2.

In the UK today Q4 2nd Estimate GDP -0.2% q/q; +0.7% y/y LONDON (MNI) - Household spending rose for the first time in over a year in the fourth quarter and net exports boosted growth, but these were offset by a large fall in investment spending, figures from National Statistics showed Friday

In Italy today retail sales fell 1.1% m/m in December in SA nominal terms, and dropped an unadjusted 3.7% y/y, down from -1.8% y/y in November and the worst y/y fall since March 2009 (-4.2%). -Food sales fell 1.0 m/m; non-food sales fell 1.2% m/m. -Italy 2011 full-year average unadjusted. Retail sales -1.3% (+0.2% in 2009)

In France today February consumer confidence up 82; January 81 (unrevised) -Matches expectations; MNI analysts survey median forecast 82 -Buying-propensity up 5 points -Future inflation worries down 2 points -Jobless fears down 1 point

February 24, 2012 Economic Results actual v. forecast

SGD

Singaporean Industrial Production (YoY)

-8.8%

-1.6%

12.6%

EUR

German GDP (QoQ)

-0.2%

-0.2%

EUR

French Consumer Confidence