The MarketSquareFX Blog (GBPUSD)

[pointzero8]

Thursday 24 May 2012

GBP: Revised GDP q/q

"GDP fell 0.3% in the first quarter, a worse showing than the initial estimate of a 0.2% decline. That confirms the second quarterly contraction of economic growth in a row, generally regarded as the technical definition of a recession."

Actual -0.3% Forecast -0.2% Previous -0.2%

"There are 3 versions of GDP released a month apart - Preliminary, Revised, and Final. The Preliminary release is the earliest and thus tends to have the most impact"

From the ONS:

Economic background

Over the past eighteen months, the economy has experienced a mild contraction in output. This reflects global economic headwinds as well as domestic economic conditions such as the impact of continuing high rates of inflation in the UK. This is mirrored in the labour market where employment has been fairly static.

The weakness in output has been concentrated in the production and construction industries, while the services industries have contributed positively to growth in the latest quarter. Output in the production industries is driven by continuing weakness in oil and gas output. Excluding the oil and gas sector, gross value added has contracted by 0.3 per cent in line with the economy as a whole.

In terms of expenditure, growth has depended primarily on net trade, with some expansion in exports while imports have held fairly steady. The Euro Area's financial difficulties have held back exports to the EU, but exports to the rest of the world have shown some strength. Household final consumption expenditure has fallen a little in real terms over the past eighteen months and there has been a sharp running down of inventory levels, while gross fixed capital formation has been broadly flat.

Four quarter growth in the GDP deflator, which is an indicator of domestic price pressures, has fallen from 2.4 percent in 2011 quarter one to 2.0 per cent in 2012 quarter one, corresponding with an easing in headline consumer price inflation. The GDP deflator excludes the direct impact of the rising prices of oil and other imported commodities and is therefore lower than the CPI measure of inflation."

Technical Note:
Time consideration
HIGH Thu 28 Apr 2011 1. 67 46 1 03:00 TO
LOW Fri 13 Jan 2012 1. 52 33 0 15:20
-1,513.10 268,580 Minutes

50% of 268,580 = 134,290 + Fri 13 Jan 2012 15:20 = Wed 23 May 21:30 (All times GMT) Action: Draw and label Vertical Line

 

[pointzero8]

•Overnight price action. The dollar remained firm against other major currencies in Asia this morning over the continuing concerns over European sovereign debt problems and a global economic slowdown. The dollar hit a 15-month high to the Swiss franc, while the ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, climbed to a 20-month high. Many Asian currencies also fell against the dollar as regional equity markets maintained a weak tone.

•"Risk aversion" is firmly determining price action, with the dollar getting all the attention, and in addition to the "hurricane" facing Europe, new signs of a global slowdown have emerged from the U.S., the euro zone, and China over the last few days, which is darkening the global economic outlook. Traders commented that "The Greece problem is one thing, but additionally, emerging economies like China that are supposed to lead growth aren't growing as much as hoped."

Technical Note:

PTQ Matrix Fri 25 May 2012 15:04

1.00 4.14 4.259

0.24 1.00 1.029

0.235 0.972 1.00

 

[pointzero8]

•Overnight price action. The dollar remained firm against other major currencies in Asia this morning over the continuing concerns over European sovereign debt problems and a global economic slowdown. The dollar hit a 15-month high to the Swiss franc, while the ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, climbed to a 20-month high. Many Asian currencies also fell against the dollar as regional equity markets maintained a weak tone.

•"Risk aversion" is firmly determining price action, with the dollar getting all the attention, and in addition to the "hurricane" facing Europe, new signs of a global slowdown have emerged from the U.S., the euro zone, and China over the last few days, which is darkening the global economic outlook. Traders commented that "The Greece problem is one thing, but additionally, emerging economies like China that are supposed to lead growth aren't growing as much as hoped."

Technical Note:

PTQ Matrix Fri 25 May 2012 15:04

1.00 4.14 4.259

0.24 1.00 1.029

0.235 0.972 1.00

From the Daily Telegraph, Saturday 26 May 2012

The comments came amid rumours – detailed by the bank of Tokyo Mitsubishi-UFJ – that a Greek exit is now imminent. The bank said there was speculation that a “planned departure” would take place over the weekend of June 2 and 3.
The left-wing party that opposes Greece’s austerity agreements has extended its lead ahead of next month’s election, according to a new poll.
If Greeks do vote for politicians who are against the cuts and reforms on which its bail-out packages depend, its international lenders are expected to cut off funding, prompting its eurozone exit.
The cost of this could exceed the €1 trillion (£800bn) previously estimated by the Institute of International Finance, said its managing director. “Those who think that Europe, and more broadly the global economy, are really prepared for a Greek exit should think again,” said Charles Dallara.
The impact on the UK could be a drop of around 2pc in GDP, prompting the Bank of England to expand quantitative easing by £200bn to £525bn, said analysts at Bank of America Merrill Lynch.

 

[pointzero8]

From the Daily Telegraph, Saturday 26 May 2012

The comments came amid rumours – detailed by the bank of Tokyo Mitsubishi-UFJ – that a Greek exit is now imminent. The bank said there was speculation that a “planned departure” would take place over the weekend of June 2 and 3.
The left-wing party that opposes Greece’s austerity agreements has extended its lead ahead of next month’s election, according to a new poll.
If Greeks do vote for politicians who are against the cuts and reforms on which its bail-out packages depend, its international lenders are expected to cut off funding, prompting its eurozone exit.
The cost of this could exceed the €1 trillion (£800bn) previously estimated by the Institute of International Finance, said its managing director. “Those who think that Europe, and more broadly the global economy, are really prepared for a Greek exit should think again,” said Charles Dallara.
The impact on the UK could be a drop of around 2pc in GDP, prompting the Bank of England to expand quantitative easing by £200bn to £525bn, said analysts at Bank of America Merrill Lynch.

Monday 28 May 2012

Economic week ahead
It is a relatively quiet week for scheduled economic indicators in the UK, with the focus likely to remain on developments in the eurozone crisis.
That said, UK data will focus on the consumer sector and there are a few releases of note. The Bank of England is expected to say on Wednesday that mortgage approvals edged up slightly in April, to 50,000 from 49,900 in March, despite the end of a stamp-duty holiday for first-time buyers on March 24.
Nationwide is expected to say on Thursday that average house prices in Britain fell 0.1pc in May, following a 0.2pc fall in April. It would mean that on an annual basis, house prices were 1.4pc lower in May, compared with an annual fall of 0.9pc in April.
Economists are forecasting a two-point fall in consumer confidence in May, when GfK NOP publishes its latest survey on the same day. Respondents will have chance to digest the news that Britain fell back into recession in the first quarter.
Monday May 28
Full-year results: Aveva, First Derivatives, Phoenix IT
Interim results: None scheduled.
Trading update: Origin Enterprises, XCounter AB
Economics: Speech by Ben Broadbent, MPC member.
Meetings: Asia Digital Holdings, Globo
Tuesday May 29
- Economic bellwether Wolseley posts a third-quarter trading update, where it is expected to warn that the eurozone debt crisis and poor weather have made for challenging trading in Europe – though the US is holding up. For the year to July 31, Panmure Gordon forecasts a rise in profits at the buildings merchant from £556m to £620m before tax and exceptionals.
Full-year results: Acal, De La Rue, Fastfill, Iomart, McKay Securities, Newriver Retail, Pennon Group, Renold, Scapa, Torotrak, Volex, VP
Interim results: Brewin Dolphin Holdings, Datong, Topps Tiles
Trading update: Wolseley
Economics: CBI distributive trades survey
Meetings: Alkane Energy, Anglo Pacific, Concurrent Technologies, Corac, Eleco, Edinburgh US Tracker Trust, Parity Group
Wednesday May 30
- Royal Bank of Scotland is unlikely to be caught up in the Shareholder Spring when investors meet for the bank’s annual meeting on Wednesday.
Chief executive Stephen Hester has already waived his near-£1m bonus and there is no prospect of UK Financial Investments, which manages the taxpayer’s 82pc stake, registering an embarrassing protest vote. However, Mr Hester is still likely to field uncomfortable questions about excessive pay. The bank will also request approval for a 10-for-1 share consolidation that will rebase the shares at a price 10 times higher in an effort to reduce sharp movements in its share price.
Approval is likely to be a formality given the Government’s 66pc of the voting shares, and small shareholders have been assured it will not affect the value of the company or any shareholder’s stake.
Separately, RBS is reportedly set to axe Hoare Govett as its broker, the famous City institution it sold in February in a scaling-back of investment banking activities.
- Shareholders in Severn Trent will be hopeful of a much-rumoured special dividend when the water utility unveils its full-year results. Analysts at Barclays have forecast either a special dividend or a share buyback of up to £540m this year in order to avoid having the business run with excess capital. Underlying pre-tax profits are expected to have fallen to £267m, from £289m the year before, according to consensus forecasts.
- Spain's controversial "austerity tax grab" on UK online gambling operators will likely steal the spotlight at Sportingbet's third-quarter results. The group, which is among a string of UK companies hoping for an official licence to operate in Spain, was last week forced to raise £15m through a bond issue to meet a surprise back-dated tax demand. Sportingbet's share price has come under pressure, giving rise to some whispers it could again come under the acquisition spotlight. Barclays is forecasting third-quarter revenue across the group of £46.8m and earnings before interest, taxes, depreciation, and amortisation of £10.3m.
- London & Stamford, the property company run by industry veterans Raymond Mould and Patrick Vaughan, is expected to post annual pre-tax profits of £27.8m this week, compared with £56.8m last year, according to Panmure Gordon analysts. However, investors are likely be more interested in how the company plans to spend its £800m war chest and the progress on the sale of its 50pc stake in Meadowhall shopping centre.
Full-year results: BP Marsh & Partners, GB Group, London & Stamford Property, Straight, Telford Homes, Severn Trent
Interim results: Hiwave Technologies, Phytopharm
Trading update: Sportingbet
Economics: Bank of England mortgages and consumer credit data.
Meetings: Enquest, Hellenic Carriers, Hiscox, Judges Scientific, London & Associated Properties, Quarto, Royal Bank of Scotland, Vislink, Williams Grand Prix Holdings
Thursday May 31
- Halfords is hoping that a summer dominated by the Olympics and, one hopes, a sackful of gold medals at the velodrome, will encourage Britain to get cycling. Over the past year, the retailers' bicycles and cycling accessories have only partially offset a pretty dire car market, especially the collapse in sales of satnavs. Analysts are forecasting pre-tax profit of £91m, down from £126m the year before on sales of £750m. The generous dividend of 22p is expected to be held.
- Thomas Cook chairman Sam Weihagen has eased concerns about the future of the world's oldest tour operator ahead of half-year results. On Thursday he named Harriet Green, boss of electronic components group Premier Farnell, as the tour operator's new chief executive. However, by Mr Weihagen's own admission, the company is "not out of the woods" and half-year figures will be scoured for any possible threats to trading.
Full-year results: Fuller Smith & Turner, Halfords, Personal Assets Trust, Tate & Lyle
Interim results: Thomas Cook Group
Trading update: Kingfisher, Scisys
Economics: Nationwide house prices index, GfK NOP consumer confidence survey.
Meetings: Kenmare Resources, Lookers, Petropavlovsk, Scisys
Friday June 1
Full-year results: None scheduled.
Interim results: None scheduled.
Trading update: None scheduled.
Economics: Manufacturing PMI
Meetings: Sound Oil, Verona Pharma

 

[pointzero8]

Tuesday 29 May 2012

In the news Headlines:

Retail sales recovering, CBI says

QE prospects dwindle

Bank of England prepares plans for euro collapse...

the market appears to be in an accumulative mode from the recent price action on the M15, with a notable deceleration in the downtrend. In terms of the title of this blog, we are 99.241% / 61.454% according to my philosophy, and 64.922% / 28.170% at 161 and 0.220 0.975 1.000. Is there a risk to the downside? Have you read the news lately?