The fundamental news on the economic calendar for the euro to dollar began this morning with 3 items of news in the euro zone which have already been released covering CPI and Industrial Production, all of which came in either on target on better than expected. The first of these was CPI which provides a measure of the change in the price of goods and services purchased by consumers and hence gives an indication of likely inflation or deflation. The number came in bang on target at 0.6%, exactly the same as for last month. At the same time the core figures were also released and these exclude food, energy, alcohol and tobacco, but these numbers tend to have less of an impact for obvious reasons. The number came in marginally better at 1.5% against a forecast of 1.4%. The last of this group were the Industrial Production figures which measure the change in total output produced by manufacturers, mines and utilities and these came in marginally better at -2.3% against a previous of -2.5%. These numbers tend to have a relatively muted impact since they do not include Germany and France who release their own numbers and account for over 50% of Europe’s economy.
The important numbers for this afternoon are released in the US starting with building permits, followed by unemployment claims, housing starts, and the Philly Fed Manufacturing Index, with the session rounded off with natural gas storage numbers. The building permits data is expected to stay relatively flat at 0.55m and measures the number of new building permits issued during the month and is therefore is an excellent gauge of future activity in the construction industry. The unemployment claims, again, are likely to remain relatively flat with a forecast of 657k and indicates the number of people filing for unemployment for the first time during the past week – again awful numbers but only to be expected in the current economic climate. Looking at a graph for these figures for the last 2 years, one could argue that we may be seeing a topping out of these figures at the 660k level, but only time will tell. This trio is completed with the housing start figures which measure the number of new residential homes in construction during the previous month. These are likely to show a small fall from last month to 540k from 580k. 90 minutes later we have the Philly Fed manufacturing index which is a survey of manufacturers in Philadelphia and is generally considered a leading indicator of the economy. It is based on a survey of around 250 manufacturers who are asked to rate their views of the general business climate, with a number above zero considered positive. The forecast is for -31.8 against -35, so a marginally improving picture.
The final set of numbers for the day is from the EIA and measures the change in the number of cubic feet of natural gas held in storage. Whilst this is a US indicator it tends to have more impact on the Canadian Dollar due to Canada’s large energy sector. The forecast is for 18bn against a previous of 20bn. Finally we have a speech from FOMC member Dennis Lockhart entitled “Meeting the Challenges of Financial Crisis”.
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