Sunday, February 13, 2011

Forex Weekly Outlook - February 14-18

*US Inflation data, TIC Long-Term Buys, UK employment data, American
FOMC Meeting Minutes and Unemployment Claims are the highlight of this
week. Here is an outlook on the coming events.*

Increases in prices for specific goods does not reflect on overall
inflation which is currently below the central bank's desired level
said Dennis Lockhart, president of the Centralized Reserve Bank of
Atlanta. Low inflation rates was the reason for the Fed's following
round of bond buying in November. Lockhart said the $600 billion
curriculum is already working.

* *German ZEW Economic Sentiment:* Tuesday, 10:00. German economic
sentiment climbed more than expected in January success 15.4
points from 4.3 points in December. Economists had forecast an
increase to 7 points. And the Eurozone index increased to 25.4
points in January from 15.5 points in December. ZEW President
Wolfgang Franz said, "The currently low level of real interest
rates should strengthen demand for capital equipment in Germany.
Increased job security stimulates private utilization". A climb
to 20.2 is expected now.

* *US Core Retail Sales: Tuesday, 13:30.* Retail Sales continued to
grow in December increasing by 0.6%, from a month earlier rising
for the six consecutive months. Core sales, which remove the
volatile autos and gasoline components also rose but by a lesser
0.4%. Core retail sales, is expected to gain 0.6% while Retail
sales is predicted to increase 0.5%.

* *US TIC Long-Term Buys:* Tuesday, 14:00. U.S. Treasury
International Capital buys rose above expectations in November
soaring to USD 85.1 billion after diminishing to USD 28.9 billion
in October while analysts had expected buys of long-term
securities to reach USD 46.7 billion. This data reflects the weigh
of domestic and external investments. Further growth to USD 91.3
billion is predicted.

* *British Employment Data:* Wednesday, 9:30. The number of people
claiming unemployment benefits in the U.K. fell more-than-expected
by a seasonally adjusted 4,100 in December, after diminishing by
3,200 in November. Analysts had expected the claimant count to
fall by 1,400. The rate of unemployment was maintained at 7.9% in
line with expectations. Another fall of 3,300 is expected now.

* *British Inflation Report:* Wednesday, 10:30. The
recent UK infla­tion data came in at CPI 3.7% for December
2010 with real infla­tion at just above 6%. This is well above
the BOE claim that high infla­tion of above 3% was permanently
just tem­po­rary and that it would resolve in a sub 2% rate by
the end of the year (2010). The BOE's recent Infla­tion Report
in Novem­ber 2010 forecasted UK CPI Infla­tion to tar­get an
ahead of schedule 2011 peak of 3.5% before infla­tion falls to
below 2% CPI by the end of 2011 to tar­get a rate of approx
1.7%, and for infla­tion to remain well below 2% into the end of
2012, Meanwhile high infla­tion con­tinues to rise
dur­ing 2011.

* *US Building Permits:* Wednesday, 13:30. Building permits for new
construction, or additions, surged to 635,000 in December well
above the forecasted reading of 555,000 following 530,000 in
November. Analysts are optimistic regarding the housing market
forecasting growth in the new single-family home sales. A smaller
gain of 570,000 is predicted now.

* *US* *PPI :* Wednesday, 13:30. Producer price inflation rose
more-than-expected by 1.1% in December after rising by 0.8% in
November while analysts had expected PPI to increase by 0.7%. Core
PPI, which excludes food and energy costs, rose in line with
expectations, rising by 0.2% in December, after increasing by 0.3%
in November. A climb of 0.9% is forecasted now.

* *American FOMC Meeting Minutes:* Wednesday, 19:00. The previous
FOMC meeting minutes released on January focuses on the gradual
growth in employment, the concern about the housing market and the
risk of deflation due to low inflation rates.

* *Japan**'s Inflation Report:* Tuesday. Japan's central bank
kept it key interest rate unchanged at virtually zero in to
protect the fragile economy. According to expectation BOJ's
nine-member policy board voted unanimously at a two-day meeting to
keep the overnight call rate target at 0 to 0.1 percent. Although
Japan's economy has been pressured by slowing overseas demand, a
persistently strong yen and deflation the central bank predicts,
but, that the economy will gradually find its footing again and
return to a "moderate recovery path" in correlation with the
growing global economy.

* *US* *Core CPI:* Thursday, 13:30. CPI in December jumped 0.5
percent, following a modest 0.1 percent rise the month before.
Analysts had projected a 0.4 percent boost. Without food and
energy, CPI inflation came in at 0.1 percent, equaling the rise
for November and matching expectations. CPI is in a growing trend
due to higher oil prices while the Core CPI is soft due to weak
housing and gray struggle among retailers. In coming months, the
Fed likely is vacant to have to address this issue of two track
inflation between headline and core numbers.Core CPI is expected
to increase by 0.2%.

* *US Unemployment Claims:* Thursday, 13:30. The number of Americans
filing new applications for regular state unemployment-insurance
benefits fell 36,000 to a seasonally adjusted 383,000 success the
lowest level since July of 2008. Analysts expected an early-claims
level of 411,000. The job market is showing a real recovery. The
number of new claims is expected a slight climb to 401,000.

* *US Philly Fed Manufacturing Index:* Thursday, 15:00.
Manufacturing activity in Philadelphia fell unexpectedly in
January to 19.3 after rising to 20.8 in December revised down from
24.3. Analysts had expected the index to rise to 21.0. The report
said that all of the survey's broad indicators remained positive
this month and there was an apparent pickup in new orders and
employment. In addition, the survey's broad indicators of
future activity suggest that firms expect a continued expansion in
activity over the next six months. Manufacturing activity is
predicted to grow further to 20.8.

* *Ben Bernanke speaks:* Friday 13:00*.* Centralized Reserve
Chairman Ben Bernanke is due to participate in a panel discussion
titled "Global Imbalances and Financial Stability" at the
Global Imbalances and Financial Stability Launch Consequence, in
Paris. He will doubtless talk about stimulus programs to help
recovery. His words have fantastic influence on the market.

*All times are GMT.

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