Although there no overtly “red flag” fundamental news items on the economic calendar today nevertheless there is a raft of data due to be released throughout the day affecting the euro to dollar pair.  The first of these is an interesting one and is the German Preliminary CPI which is actually drip fed into the market throughout the day as the various regions in German (of which there are 6) report their CPI figures at different times.  The preliminary release is the Eurozone’s earliest consumer inflation estimate and is given the size and current state of the German economy will be eagerly awaited.  These could come in at any time so just be aware of any peculiar and unexpected movements in currency pair today.  The forecast is for around 0.1%.

The next item on the economic radar for Europe is Industrial New Orders which is the change in the total of new purchase orders placed with manufacturers and is generally considered a leading indicator.   The forecast is for -5.7% against a previous of -5.2% indicating a further fall in this measure of economic sentiment.   If the actual is better than forecast then it will seen as positive for the Euro.

The focus now shifts to the US where the morning starts with Core PCE Price Index Data which measures the change in the price of goods and services purchased by consumers but excludes food and energy.  It differs from the Core CPI of yesterday as the index only measures those goods and services targetted at individuals.  Forecast is for 0.1% which is the same as last time. At the same time we have an index entitled Personal Spending which records the change in the total value of inflation adjusted expenditure by consumers.  The forecast here is for 0.2% against a previous of 0.6% and if the figures are better than expected we could see some positive dollar reaction.  This set of data rounds off with personal income which again is another index of income correlated spending which has a relatively minor impact on the market.

We round off the week with the revised UoM – University of Michigan consumer sentiment figures which is a composite index based on a survey of around 500 consumers which asks for their views on the current and future economic climate.  The survey assesses consumer confidence regarding personal finances, business conditions and purchasing power, and it is especially valued for its quick turnaround.  The University of Michigan Confidence survey is considered one of the foremost indicators of US consumer sentiment.  Declining consumer confidence levels usually accompany any fall in income or wages and precede drops in consumer spending. A low or falling UoM Sentiment value is considered an early indicator of an economic downturn. As a result, investors, retailers and traders alike all watch the figure for some  insight into the general health of the economy. UoM figures have recently a reliable forecasting tool in overall GDP.   The headline figure is calculated by subtracting the percentage of unfavorable replies from the percentage of favorable replies, and the forecast this time around is 56.7 against a previous of 56.6.

Attached to the UoM report is a further set of numbers which provide a view on inflation expectations and is based on a survey of consumers once again and their views on the expected price of goods and services over the next 12 months.

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