A busy day in Europe for fundamental news on the economic calendar today which started early with the GFK German Consumer Index which came in marginally better than expected at 2.9 against a forecast of 2.5.  Regular readers of this commentary will know that I place little faith in such composite surveys which are generally out of date and based on sentiment and not hard factual evidence – but when did the truth ever get in the way of a good story!!  This was followed by seven other pieces of data, almost all of which showed a worsening picture or, at best, one that was flat.  The first three related to the French economy and included consumer spending, manufacturing and services, with only manufacturing coming out marginally ahead of forecast at 45.5 against a forecast of 44.8.  French spending was down at -0.2% against a forecast of +0.2% with the services index falling below forecast at 47.5 against a forecast of 48.8.

The above was followed by the equivalent data from Germany with both manufacturing and services falling well short of target, the former coming at 40.5 versus 41.1 and the latter at 44.3 versus 46.  The final data set was for Europe as a whole (again for both manufacturing and services) with the first being on target at 42.4 and the second falling short at 44.5 versus 45.8.  On balance a fairly gloomy picture which did not prevent the Euro from rising strongly.  The reason?  More likely to do with Trichet’s comments that there were no plans for any further stimulus.

The focus of attention now switches to the US with the release this afternoon of the existing home sales numbers which are forecast for an improvement at 4.82m against a previous of 4.68m.   This data is generally considered to be a leading indicator for the economy as an improvement in home sales has far reaching effects for the wider economy and related industries.  Following this number we then have the HPI data (House Price Index) which signals the change in the purchase price of homes backed by mortgages from Fannie Mae and Freddie Mac and the forecast is for -0.3% against a previous of -1.1% so a marginally improving picture.   The final item of news today is yet another composite index based on a survey of manufacturers based in Richmond and is forecast at +5 with any figure above 0 indicating improving sentiment.

Finally at 17.30 GMT President Obama is due to hold a press conference on wide range of topics which may or may have market impact.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.