With the G8 summit now winding down and generally considered to have been a complete non event as far as the markets are concerned, it’s business as usual for fundamental news on the economic calendar ahead of the weekend.  Today in Europe we have had 4 items of news all relatively positive for the European economy.  The first of these was the German WPI, which measures the change in the price of goods sold by wholesalers which came in better than expected and 0.9% against a forecast of 0.1%, temporarily putting aside the spectre of deflation.  The second item was French Industrial Production which surprised the markets by rebounding to 2.6% against a forecast of -0.1%.  The third was the French Government Budget Balance which was released at -88.7bn against a previous of -71.9, indicating an increasing deficit once again.  Finally, Italian Industrial Production which also came in better than expected at 0% against a forecast of -0.7%.  All in all a rosy picture for Europe this weekend.   Continuing the good news theme the US Trade Balance was reported at -26bn against a forecast of -30bn, unexpectedly narrowing the US trade gap which again as a surprise to the markets.  Import prices for the US increased to 3.2% against a forecast of 1.8%, largely as a result of rising commodity prices which could harm company profits longer term.   As a result equity markets fell with a consequent rise in the US Dollar.  Finally this afternoon there are 3 other items of news, two of which are related to the UOM (University of Michigan Sentiment Index), namely consumer sentiment and inflation expectations, and these are closely followed by a speech from Treasury Sec Geithner who is due to testify on the OTC derivative market which could prove very interesting.  For those of you new to trading any product which is not traded on a central exchange is generally an OTC (over the counter) so any you trading spot markets, currencies are effectively trading this type of instrument.  This week has seen the commodity regulators discussing the need to tighten the rules of the oil market and Geithner’s testimony may be a follow on from this.

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