FOREX: Tuesday's review
16.02.2011, 08:14

FOREX: Tuesday's review

The euro advanced versus most major counterparts as data showed German investor confidence increased this month and U.S. retail sales rose in January less than economists forecast. 
Commerce Department data showed U.S. retail purchases rose 0.3 percent last month, the smallest gain since a drop in June. Economists in a Bloomberg News survey predicted a gain of 0.5 percent. 
Global demand for U.S. stocks, bonds and other financial assets fell in December from a month earlier, the Treasury Department reported. Net buying of long-term equities, notes and bonds totaled $65.9 billion during the month compared with net buying of $85.1 billion in November, according to data released in Washington. 
The pound rose against all 16 major currencies as U.K. inflation increased. Europe’s common currency lost 0.9 percent versus the greenback over the past week.

EUR/USD: the pair bargained within the limits of $1.3460-$ 1.3550.
GBP/USD: on results of yesterday's session the pair become stronger above a mark $1.6100.
USD/JPY: on results of yesterday's session the pair become stronger in around Y83.80.

The UK calendar kicks off at 0930GMT, with the release of the UK employment data. The claimant count rate is seen at 4.5%, with jobless clains down 3,000 on the month. ILO undemployment is seen unchanged at 7.9%. The Bank of England inflation report is out at 1030GMT. The reports looks set to back the case for monetary tightening with 
inflation shown overshooting the BOE's target on flat Bank Rate and with an equal chance of it being above or below target if markets' implied rate hike expectations are met. Implied market rate expectations have risen sharply since the November report. In the 15 day average used by the BOE they were pricing in a May hike and at least one more hike this 
year, and yet BOE Governor Mervyn King revealed in a letter Tuesday the report would show the chances of CPI being above/below target in 2 to 3 years time were roughly equal - the same as in Nov.
US data starts at midday., with the Feb 11 MBA mortgage application index. The main releases are at 1330GMT, with the release of the Producer price data and housing start numbers. The pace of housing starts is expected to rise to 540,000 in January after falling 4.3% in the previous month. Permits, which surged 15.3% in December on special factors, are expected to fall sharply in January. Producer prices are expected to jump 0.8% in January. Both food and energy prices are expected to rise. The core PPI is expected to rise 0.2%, as the power to 
pass on higher input prices remained weak.
January Industrial production data is expected at 1415GMT.  It are expected to rise 0.5% in January. Factory payrolls jumped 49,000 in the month, while auto production jobs rose 20,000. The factory workweek rose 0.1 to 40.5 hours, while the ISM production index rose to 63.5. Capacity utilization is forecast to rise to 76.3%. Treasury Secretary 
Tim Geithner testifies about the Budget proposal on the Hill Weds. At 1500GMT, he is before the Senate Finance Committee, while at 1900GMT, he appears before the House Budget Committee. At 1530GMT, the EIA Crude Oil Stocks data is released. Also on traders radar screens will be the 1900GMT release of the Fed's January 26 FOMC meeting minutes.

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