Daily Analysis for THURSDAY - JULY 19th

Overnight News Bullets

• UK Claimant Count Rate (JUN) out at 2.7%, while 2.7% expected, 2.7% prior.
• UK Jobless Claims Change (JUN) out at -13.8K, while -7.5K expected, -9.3K prior.
• UK Avg. Earnings inc. bonus 3M/YoY (MAY) out at 3.5%, while 3.6% expected, 4.0% prior.
• UK Avg. Earnings ex. bonus 3M/YoY (MAY) out at 3.5%, while 3.6% expected, 3.6% prior.
• UK ILO Unemployment Rate 3mths (MAY) out at 5.4%, while 5.5% expected, 5.5% prior.
• UK Manu. Unit Wage Costs 3M/YoY (MAY) out at 0.3%, while 0.2% prior.
• EC Euro-Zone Trade Balance (MAY) out at 1.7B, while 2.2B expected, 1.8B prior.
• EC Construction output MoM/YoY (MAY) out at 0.2%/1.8%, while -0.9%/3.9% prior.
• US MBA Mortgage Applications (JUL) out at 0.9%, while 1.1% prior.
• CA CPI (JUN) MoM/YoY out at -0.2%/2.2%, while 0.1%/2.5% expected, 0.4%/2.2% prior.
• CA CPI Core MoM/YoY (JUN) out at 0.0%/2.5%, while 0.1%/2.6% expected, 0.35/2.2% prior.
• US CPI MoM/YoY (JUN) out at 0.2%/2.7%, while 0.1%/2.6% expected, 0.7%/2.7% prior.
• US CPI Core MoM/YoY (JUN) out at 0.2%/2.2%, while 0.2%/2.2% expected, 0.1%/2.2% prior.
• US Consumer Price Index (JUN) out at 208.352, while 208.163 expected, 207.949 prior.
• US Housing Starts (JUN) out at 1467K, while 1450K expected, 1474K prior.
• US Building Permits (JUN) out at 1406K, while 1480K expected, 1501K prior.
• US DOE Crude Oil Inventories (JUL) out at -449K, while -500K expected, -1462K prior.
• AU RBA Foreign Exchange Transactions (JUN) out at A$618M, while A$480M expected.
• JN Nationwide Department Sales YoY (JUN) out at 5.5%, while -0.4% prior.
• JN Tokyo Department Sales YoY (JUN) out at 7.4%, while 0.7% prior.
• GE Producer Prices MoM/YoY (JUN) out at 0.2%/1.7%, while 0.3%/1.8% expected, 0.3%/1.9% prior.

Markets

FX: JPY marginally stronger, USD range bound. EUR marginally stronger, but remains range bound.

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
08:30	UK	Retail Sales MoM/YoY (JUN)	0.3% / 3.5%
08:30	UK	Public Finances PSNCR (JUN)	12.1B
08:30	UK	Public Sector Net Borrowing (JUN)	6.2B
08:30	UK	M4 Money Supply MoM/YoY (JUN)	1.1%/13.4%
08:30	UK	M4 Sterling Lending (JUN)	18.9B
09:00	SZ	ZEW Survey Expectations (JUL)	Prior -0.1%
12:30	US	Initial Jobless Claims (JUL)	311K
12:30	CA	Wholesale Sales MoM (MAY)	0.5%
12:30	CA	International Securities Transactions (MAY)	C$2.000
12:30	US	Continuing Claims (JUL)	2550K
13:30	US	Bernanke Testifies Before Senate Panel on Monentary Policy
14:00	US	Leading Indicators (JUN)	-0.1%
14:30	US	EIA Natural Gas Storage Change (JUL)	68
18:00	US	Minutes of June 28 FOMC Meeting
22:45	NZ	Visitor Arrivals (JUN)	Prior 1.8%
23:50	JN	Net Stock Investment / Net Bond Investment	761.8B/324.8B

This and Next Week’s Highlights:

Date	Region	Release
20 July	AU	Import Price Index, Export Price Index, New Motor Vehicle Sales.
20 July	NZ	Credit Card Spending.
20 July	SZ	Producer & Import Prices.
20 July	UK	GDP, Index of Services.
20 July	EC	Trichet speaks at seminar.
20 July	US	Baker Hughes U.S. Rig Count.
22 July	UK	Rightmove House Prices.
23 July	AU	Producer Price Index.
23 July	JN	Supermarket Sales.
24 July	EC	Euro-Zone Current Account, PMI Composite, Industrial New Orders.
24 July	CA	Retail Sales.
24 July	US	Richmond Fed. Manufaturing Index, ABC Consumer Confidence.
24 July	JN	Merchands Trade Balance, Adjusted Merchands Trade Balance.

What's going on?

A sudden surge in Japanse department store sales with YoY changes the highest in +10 years. Still no follow-thorugh in JPY, but if we see more of these kinds of figures, it will threaten the JPY-carry trade.

FX

GBP and EUR to see some consolidation before heading higher

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

FX Trading Strategies

Pair	Supp.	Resis.	Comments
GBPJPY	249.63	2.5053	We are still bullish on GBP, but believe it needs some consolidation. The strong Japanse dept. store sales could lead the cross lower. Sell with a stop at 250.60 bid and target 248.75.
EURUSD	1.3740	1.3834	Buy on retracements towards support and target resistance.

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