Monday 30th June 2008
All Eyes on Europe.
This week the main focus of attention will be data released from Europe. The ECB has a rate decision on Thursday that may challenge the potential market movement of the US non-farm payrolls report.
Due to the shortened week in the US (Independence Day), Non-farm payrolls will actually be released on Thursday instead of Friday and should coincide exactly with Trichet’s post meeting press conference.
A quarter point rate hike has been completely discounted by the market, although certain ECB officials have been at pains to state that this is not a foregone conclusion.
Ahead of the rate decision on Thursday in Europe we have consumer spending and employment numbers from Germany along with Eurozone producer prices.
In Asia trading we have seen Oil prices spurred by brewing Middle East tensions, climbing near Friday’s record high $142.99 a barrel and weighing on Asian stocks, which posted their worst first-half year performance in 16 years. The US dollar also fell to three week lows against the Euro following the surge in Oil and falling stock prices.
Fears about dwindling oil supply were already heightened when Libya’s most senior oil official said last week he was studying the possibility of cutting output in response to U.S. threats to sue OPEC members.
The British pound rose to a 2 month high, with housing market indicators, service and manufacturing PMI reports due for release this week and GBP/USD trading above 1.99, there is a strong chance that we may see a retest of 2.0.
Data due for release today.
UK Mortgage approvals 9:30am
EMU HCIP 10:00 am
US Chicago PMI 14:45
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