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Conflicting data keeping currency markets on their toes… April 10

By • Apr 10th, 2012 • Category: Currency

The Coracle Online Currency podcast for April 10, 2012 in association with Crossbar fx

Significant items this week:

Tuesday 10 April EU – German Trade Balance

Wed 11th April US – Feb publish beige book, Monthly budget statement

Thursday 12th April UK – Trade Balance
EU – ECB monthly report
US – Trade Balance

Friday 13th April UK – PPI
China – Retail Sales, Industrial Production and GDP

Thank you for downloading the foreign exchange market report podcast for April 10th from Coracle Online and Crossbar fx.

Last week was full of mixed signals about the state of various economies and the global economy as a whole. Depending on what data you prefer you could put a positive or negative outlook on your market commentary – and back it up with data to support your argument!

In the US, jobless benefit claims hit their lowest levels in 4 years, that’s good news… but, Non-farm payrolls only grew by 120,000 in March, which is actually the lowest it has been in 5 months, and that’s not enough to drive the US economy forward. Commentators were hoping for at least 200,000. So we’re seeing conflicting views there. The Fed signalled that at present there is no need for further quantitative easing, despite several of their major banks failing recent stress tests : notably Citigroup.

In the Eurozone, Germany seems to be the only “good news” story. Exports rose 8.6% last year and imports were up 6.1%, but manufacturing was actually down by 1.4% compared to the previous year. Eurozone unemployment grew to 10.8% in Feb, which is the highest ever. The Spanish jobless count is now at 23.6% or 4.75 million of their population. Add to that the austerity measures that they have announced and the continuing liquidity and debt issues with Portugal and Italy and all positive news quickly becomes overshadowed.

On top of all of this, and of interest to all economies, is what’s happening in China.. Imports last month fell to + 5.3%, year on year, which was down from 39.6% the previous month. Some say they are heading for a hard landing, others are saying that its already happening. Either way, they are consuming at a slower rate and exporting at a slower rate and that effects us all.

The Bank of England kept interest rates on hold last week. Unexpected buoyancy of recent economic surveys suggests green shoots in the UK economy but these are outperforming official data. There well may be no 2nd recession this quarter, but growth is feeble.