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Fundamental Analysis
07/31/2010
The Dollar is on the Ropes, Again
The final week of July saw mixed price action among asset classes, as better than expected data from outside the US was mostly offset by weaker US data. US stocks finished slightly weaker while the MSCI world stock index gained some ground. The CRB commodity index continued to advance, but
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Fundamental Analysis
07/30/2010
USD/JPY Falls to Lowest Level This Year
The dollar was higher against the euro on Friday but lower versus other major currencies. US GDP rose at a 2.4% annualized pace in Q2 2010. While Q1 GDP was revised higher, estimates back to 2007 were revised lower. The S&P 500 increased 0.07 to 1,101.60. The euro fell from
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Fundamental Analysis
07/30/2010
The Weekly Bottom Line
This week Europe caught some wind in its sails, with good news blowing from several quadrants. Indicators showing better than expected results began to accumulate a week ago with the release of strong second quarter GDP data for the United Kingdom -up by 1.6% Y/Y- well ahead of market expectations,
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Fundamental Analysis
07/30/2010
Weekly Economic and Financial Commentary
Real GDP grew at a 2.4 percent annual rate during the second quarter. While the gain was slightly higher than the reduced market expectations, most of the strength occurred earlier in the quarter and the revisions to previously published data show the recession was deeper than first reported and the
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Fundamental Analysis
07/30/2010
FX Strategy Weekly
Dollar weakness coloured G10 fx markets in July but a stabilisation in speculative positioning begs the question if the currency is due for some reprieve in August. The path to a USD bounce remains uneven at best, but as the tide of positive Q2 corporate earnings subsides and scepticism surrounding
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Fundamental Analysis
07/30/2010
The Week in Review
A weak and weakening American economy has undermined the strength of the dollar for the entire month of July and this week's economic information provided no relief for the US currency. Since Monday the greenback has declined more than 1% versus the euro, 1.9% against the sterling, 1.1% for the
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Fundamental Analysis
07/30/2010
Japan's Batch of Data Shows Higher Unemployment, Weak Production
Overnight, we got end-of-the month statistics from Japan. While there was a positive report in the form of stronger than expected household spending for the month of June, a rise in the unemployment rate and a drop in industrial production dampened any enthusiasm for the Japanese economy.
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Fundamental Analysis
07/30/2010
U.S. Market Update
The USD started the NY morning on a softer tone as concerns over the growth outlook weighed upon sentiment. The GDP data and personal consumption did fail to meet expectations as some of the whisper numbers suggested and the US Treasury two-year note yield decline to fresh record lows below
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Fundamental Analysis
07/30/2010
Afternoon Forex Overview
The dollar slipped against the yen in morning trading Friday after U.S. gross domestic product data showed scant signs of inflationary pressure, putting downward pressure on U.S. yields. GDP in the U.S. grew by 2.4% in the second quarter, slightly below the 2.5% expected by economists. Month-end trading contributed to
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Fundamental Analysis
07/30/2010
Yields Pare Gains Despite GDP Setback
Yields slumped after investors reacted with despair to a downturn in U.S. second quarter GDP. The response might not have been so bad had St. Louis Fed chief Bullard not pulled out a paper discussing a contingency plan in the event deflation became a threat. The timing of Mr. Bullard's
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Fundamental Analysis
07/30/2010
US GDP Grows Weaker Than Expected 2.4% in 2nd Quarter
Today's GDP data is another piece of data that underwhelmed, and adds to the string of releases casting a long shadow over the US recovery. It's a good snapshot of where the economy is right now as it showed that consumer spending is adding less to growth, while business spending
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Fundamental Analysis
07/30/2010
Emerging Markets: Central Banks are Becoming More Cautious
This week, EUR-USD firmed again somewhat to 1.30, even touching 1.31 briefly. The euro also rose slightly against most non-European currencies. The main reason for the movement was the diverging economic climate: both the macro data for the euro area and corporate quarterly earnings made a positive impression, especially against
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Fundamental Analysis
07/30/2010
U.S. Second-Quarter GDP Expanded at a 2.4% Annualized Pace According to Advanced Estimate
The first estimate of second-quarter 2010 GDP growth showed a 2.4% annualized gain, just short of expectations for a 2.6% annualized increase. Revisions to the data going back to 2007 showed a generally softer economic performance with 2007 growth at 1.9% (compared to 2.1%), 2008 flat (compared to previously reported
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Fundamental Analysis
07/30/2010
Canadian May GDP Rises Modestly
GDP output in May grew moderately weaker than anticipated rising 0.1% compared to market expectations of a 0.2% rise. This result represents a modest improvement from the no change in April although down markedly from the 0.6% surge recorded in March. The strength emanated from the goods-producing side of the
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Fundamental Analysis
07/30/2010
Real GDP Grew Modestly During The Second Quarter
Real GDP grew at a respectable 2.4 percent pace during the second quarter, which was precisely in line with our forecast. Data were revised for the past three years and the new data show the recession was a little deeper than first reported, with real GDP declining 4.1 percent over
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Fundamental Analysis
07/30/2010
US: Q2 Data Confirms a Half-Hearted Consumer
Real GDP for Q2 came in at 2.4% (annualized), which was near expectations of 2.6%. However, the real story was in the annual revisions. Although Q1-2010 was revised up a full percentage point to 3.7%, this was because the level of GDP had dropped for the prior quarters on downward
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Fundamental Analysis
07/30/2010
Canadian Real GDP Soft in May
The pace of economic growth has likely decelerated to below 3% annualized in the second quarter of this year, almost half the growth rate experienced in the previous two quarters. A broad-based moderation is expected to continue into the second half of this year with real GDP growth to slip
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Fundamental Analysis
07/30/2010
Yen Rises to 2010 High Per Dollar as July Trading Ends
The end of July has traders on edge after a month of remarkable weakness for the dollar, while they cautiously await August PMI data due next week for the latest health check on the state of economic health. Comments from St. Louis Fed President James Bullard sounded the deflationary bell
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Fundamental Analysis
07/30/2010
Risk Appetite Subdued Ahead Of US GDP - USD Firms
Asia Pacific markets were lower after a lackluster performance in US equities saw the Dow, the S&P, and the Nasdaq fall by .3%, .4%, and .6% respectively. Disappointing topline revenues and softer guidance reports weighed on sentiment one day before the US is set to release Q2 GDP figures. Remarks
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Fundamental Analysis
07/30/2010
European Market Update
The USD was mixed against the major pairs on the last day of the month. The dollar managed a reprieve against the Euro with euro weakness attributed to month-end redemption flows from Spanish debt. A weak German retail sales number also weighed upon Euro sentiment. Overall dealers noted that the
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