Daily Analysis for JULY 25, 2007

Large sell-off in US session.
Emerging Market Currencies and the USD are getting a beating. JPY is back with a vengeance.

Overnight News Bullets

• GE Import Price Index MoM/YoY June, out at 0.6%/1.3% vs. 0.3%/1.1% expected. 0.3%/0.6% prior.
• FR Consumer Spending MoM/YoY June, out at 1.6%/3.1% vs. 0.7%/1.8% expected. -0.8%/1.7% prior.
• IT Consumer Confidence Ind. Sa July, out at 107.4 vs. 108.0 expected. 107.2 prior.
• IT Retail Sales MoM/YoY May, out at 0.1%/0.2% vs. 0.3%/0.9% expected. -0.4%/-0.4% prior.
• E-Z Current Account SA/NSA May, out at -8.6B/-14.6B vs. -0.2B/-4.2B expected. -4.0B/-6.5B prior.
• E-Z Industrial New Orders MoM/YoY May, out at 1.7%/9.1% vs. 1.2%/7.7% expected. -0.4%/12.2% prior
• CA Retail Sales MoM May, out at 2.8% vs. 0.5% expected. 0.4% prior.
• CA Retail Sales Less Autos MoM May, out at 2.3% vs. 0.6% expected. 0.0% prior.
• US ABC Consumer Confidence July 22nd, out at -5 vs. -11 prior.
• JN Merchends Trade Balance Total June, out at Y1227.1B vs. Y953.0B expected. 389.5B prior.
• JN Adjusted Merchnds Trade Balance June, out at Y823.8B vs. Y828.1B expected. Y788.5B prior.
• AU Consumer Prices QoQ/YoY 2Q, out at 1.2%/2.1% vs. 1.0%/1.9% expected. 0.1%/2.4% prior.
• AU RBA Trimmed Mean QoQ/YoY 2Q, out at 0.9%/2.7% vs. 0.7%/2.5% expected. 0.5%/2.7% prior.
• AU RBA Weighted Median QoQ/YoY 2Q, out at 0.9%/2.7% vs. 0.7%/2.5% expected. 0.5%/2.7% prior.

Markets

• FX: JPY, AUD & CAD strength across the board.

O/N Data Heat map:

EU	US	JP	UK	SZ	AU	CA	NZ	NO	SE	FR
+		+			+	+

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Calendar

Today's Highlights:

Time (GMT)	Region	Release	Consensus
07:30	SW	Unemployment Rate (JUN)	4.8%
07:30	SW	Trade Balance (JUN)	13.3B
11:00	US	MBA Mortgage Applications (JUL)	Prior 0.9%
14:00	US	Existing Home Sales (JUN)	5.87M
14:00	US	Existing Home Sales MoM (JUN)	-2.1%
18:00	US	Fed’s Beige Book
21:00	NZ	RBNZ Official Cash Rate	8.25% (+25 bps)
23:30	JN	Net Stocks Investment (JUL)	Prior JPY143.4B
23:30	JN	Net Bonds Investment (JUL)	Prior JPY39.6

This and Next Week’s Highlights:

Date	Region	Release
26 July	UK	Nationwide House Prices.
26 July	SW	Economic Tendency Survey, Manufacturing Confidence, Consumer Confidence, PPI.
26 July	GE	IFO – Business Climate, IFO Current Assessment, IFO – Expectations.
26 July	US	Durable Goods Orders, Durables Ex Transportation, Initial Jobless Claims, Continuing Claims, New Home Sales.
26 July	NZ	Trade Balance, Imports, Exports.
26 July	JN	A string of CPI’s, Large Retailers Sales, Retail Trade.
27 July	GE	GfK Consumer Confidence Survey, CPI.
27 July	SW	Retail Sales.
27 July	US	A string of GDP’s, Core PCE, University of Michigan Confidence, Baker Hughes U.S. Rig Count
27 July	NZ	Building Permits.
27 July	JN	Industrial Production.

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What's going on?

• EURUSD consolidating, but USDJPY breaking 120.60 key support and continues lower. ZAR and TRY taking a beating. ISK to follow?

• Australian Consumer Prices somewhat higher than expected and Canadian Retail Sales very strong yesterday. USDCAD testing bearish trend support from 2004. Getting closer to parity.

FX

USDCAD heading for parity?

EUR	USD	JPY	GBP	CHF	AUD	CAD	NZD	NOK	SEK	ZAR
	-	+			+	+				+

FX Trading Strategies

Pair	Supp.	Resis.	Comments
USDCAD	1.0335	1.0390	Very strong retail sales in Canada. Major risk from home sales today.Sell at the break of 1.0335 is offered and target 1.0250. Stop at 1.0360 if bid.

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