GER Unemployment Increases by 40K in February
Germany's economy saw 40K new unemployed in the month of February. This figure came in below expectations, but it did bring the unemployment rate up to 7.9% as forecast. It's the third month in a row that the economy has shed jobs as the pace of the economy's contraction accelerated.
GER Consumer Confidence Inches Upward
Consumer confidence in Germany increased slightly for the March period. The GFK index rose to 2.6 from 2.3 as consumers' expectations increased for the first time in four months. They were most likely helped by the adoption of a second economic stimulus package.
EUR Economic Sentiment Declines to Record Low
In the Euro-zone as a whole, the economic sentiment indicator, an end-of-the-month measure of economic confidence among different sectors fell to 65.4, the lowest level since the current series of the indicators was launched in January 1985. Consumer confidence fell to -33, while the services and industrial industries also saw confidence fall lower.
EUR/JPY - Euro Climbs vs Weak Yen
Despite the data from the euro-zone, European stocks were higher today, which brought the Euro-Yen pair. The pair reached the 126 level, returning to levels seen at the beginning of the year. In the last seven sessions alone, we have seen a 1,000 pip rally as the Yen weakens in the face of a deepening recession that has eroded the currencies demand as a safe-haven.
EUR/GBP - Pound Pares Yesterday's Losses vs Euro on RBS News
The Euro-Pound pair fell in favor of the Pound today, cutting into the gains the pair saw yesterday. Banking shares in London were higher as a record $34 billion loss at the Royal Bank of Scotland was still smaller than anticipated, and the UK government agreed to insure $462 billion of the bank's assets. After sliding 100 pips off its intra-day high near 0.8975, the pair found support near 0.8860.
UK Housing Prices Continue to Slide in February
In fundamental data from the UK, the nationwide house price index saw home prices down another 1.8% in February, which was a larger fall than expected by economists. On the year prices are 17.6% lower. Though the sharp cuts in interest rates by the central bank have helped affordability, they have not yet affected housing market confidence sufficiently to boost the levels of new transaction activity.
GBP/USD - Pound Rebounds From Support at 1.4160
The Pound-Dollar pair rose today after testing a strong level of support at the 1.4160 level. The greenback was generally lower today as a result of risk appetite. In this pair though the Pound only managed to claw back half of its losses from yesterday before stalling at the 1.4380 area.
US Jobless Claims Jump to 667K
In the US, weekly jobless claims rose by 36K to 667K, coming in higher than expectations. The total number of people receiving unemployment benefits for longer than 1 week rose to 5.11 million, a record high. The data suggests firms are continuing their stark pace of layoffs as the economy continues to struggle.
US Durable Goods Orders Fall 5.2% in January
Durable good orders fell for a record sixth straight month in January, posting a 5.2% decrease. That was more than twice the forecast from economists on Wall Street, and December's figure was revised down to show a 4.6% drop compared to the originally reported 2.6% fall. Transportation orders were down 13.5%, making up a good part of the overall decline as orders excluding transportation were down 2.5%. Companies are ordering less goods as they try to cut costs amidst a deepening recession. The gauge used to measure capital investment, non defense capital goods ex. aircraft, plunged 5.4%.
US New Home Sales Plunge in January
And in a third weak release from the US new home sales fell by 10.2% in January, to an annual seasonally adjusted pace of 309K units. The recession and increased amount of layoffs is keeping people from making big purchases, and as sales drop, inventories remain high, which in turn pushes down prices. Falling prices, hurt demand, because potential buyers do not want to buy a home that may continue to lose value.
USD/JPY - Dollar Rises to 3-Month High vs Yen
The Dollar-Yen pair rose again today, reaching a new 3 month high around the 98.70 level. As we mentioned before, the Yen is being pressured as a result of its weak economic growth. Also today, President Obama unveiled an outline of his budget which would yield a $1.75 trillion deficit in the year ending September 30th. The budget includes a contingency for as much as $750 billion in new aid to the financial industry this year, while laying plans for a health-care system overhaul and higher taxes on the wealthy. US equities were higher today for most of the session but fell into the red in the late afternoon.
USD/CAD - Loonie Gains as Does Crude Oil
The last pair we will show today is the US Dollar-Canadian Dollar pair. From a high near 1.2675 near the beginning of the global session, the pair fell 160 pips to support at yesterday's low at the 1.24 level. Crude oil prices were up $2.72 to the $45 a barrel level, which helped the Loonie though a late fall in US equities gave the greenback a chance to counter-rally.
Taking a look at tonight's releases, we will get a slew of data from Japan to end the month. Those releases include data on manufacturing, household spending, consumer prices, employment, industrial production and retail sales.
Some other releases later today include a measure of consumer confidence from the UK, and data on price sector credit from Australia. Overnight, Euro-zone will reveal its final version of January's CPI and its unemployment rate. Switzerland meanwhile will unveil its leading index.
Tomorrow, Canada will release its current account and producer price data and the US will post a revised version of 4th quarter GDP along with its Chicago PMI and the final version of UMich consumer sentiment.
Capital Market Services, L.L.C.
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