GBP/USD Breaks Important Resistance

The dollar traded mostly lower against its counterparts on Wednesday. US retail sales declined for a second month. The Federal Reserve, while seeing the risks to US economic growth, saw no need to increase stimulus. “The economic outlook had softened somewhat and a number of members saw the risks to the outlook as having shifted to the downside,” minutes of the June 22-23 FOMC policy meeting released today showed, asserting that “the changes to the outlook were viewed as relatively modest and as not warranting policy accommodation beyond that already in place.” US stocks were little changed, consolidating the last six days’ strong gains. The S&P 500 slipped 0.17 to 1,095.17. The yen advanced. The EUR/USD was up slightly ahead of Thursday’s Spanish bond auction. Euro-area June consumer-price inflation moderated and May industrial production rose for a third consecutive month. The Australian dollar was little changed. The Canadian dollar fell after the Fed lowered its US GDP projection by 0.2% to 3.0%-3.5% this year.

The GBP/USD rose for a second day, supported by better-than-expected UK labor data. The pair broke its downtrend and traded over its previous 1.52 resistance. However, we believe the upside may be limited to the 1.55 resistance as the pair is getting overbought. Supports are in the 1.52 and 1.50 areas.



Financial and Economic News and Comments

US & Canada
US retail sales fell for a second month in June, falling a more-than-expected 0.5% m/m to $360.2 billion, after a revised 1.1% m/m decline in May, according to data from the Commerce Department. Retail sales excluding autos also fell for a second month, slipping as forecast 0.1% m/m to $299.2 billion, following May’s revised 1.2% m/m decrease. Retail sales rose 4.8% y/y in June, an eighth straight year-on-year gain; ex-auto retail sales rose 4.4% y/y.


US business inventories grew a modest 0.1% m/m in May, a fifth successive monthly increase, after a 0.4% m/m advance in April, data from the Commerce Department showed. Business sales fell 0.9% m/m, the first fall in 14 months, following April’s 0.6% m/m gain. The inventories/sales ratio increased to 1.24 in May from 1.23 in April, compared with May 2009’s 1.41. Inventories declined 1.5% y/y in May while sales rose 11.8% y/y.

US import prices fell a more-than-expected 1.3% m/m in June, a second consecutive monthly fall, after a revised 0.5% m/m decline in May, data from the Labor Department showed. Import prices rose 4.5% y/y, following May’s upwardly revised 8.7% y/y rise. Meanwhile, export prices were down 0.2% m/m in June, the first decline in four months, after a downwardly revised 0.6% m/m increase in May. June export prices grew 4.3% y/y.

Europe
The eurozone consumer-price inflation rate slowed to 1.4% y/y in June from 1.6% y/y in May that was the fastest since December 2008, today’s report from Eurostat showed, in line with an estimate published on June 30. CPI was unchanged m/m, the first time it did not rise in five months. The core CPI rate quickened to 0.9% y/y in June from 0.8% y/y in May.



Eurozone seasonally adjusted industrial production was up a less-than-expected 0.9% m/m in May, a third consecutive month-on-month increase, after an upwardly revised 0.9% m/m advance in April, according to a separate report from Eurostat. May industrial production rose 9.4% y/y wda, a fifth straight year-on-year rise, following an upwardly revised 9.6% y/y April gain that was the largest since records began in 1991.

UK jobless claims declined a more-than-expected 20,800 in June, a fifth straight monthly slide, to 1.46 million, the lowest level in a year, after a revised 31,100 drop in May, data from the Office for National Statistics showed. The claimant count rate declined to 4.5% in June from 4.6% the previous month. Unemployment based on International Labour Organization methods fell to 2.47 million in the three months to May, the first fall since January, and the ILO UK unemployment rate slipped to 7.8% from 7.9%. Average weekly earnings including bonuses increased 2.7% y/y in the three months to May after a downwardly revised 4.1% y/y gain in the quarter to April. Average weekly pay excluding bonuses increased 1.8% y/y in the three months to May after a 1.9% y/y advance in the quarter to April.



Asia-Pacific
The Westpac–Melbourne Institute Australian consumer sentiment index rose 11.1% m/m to 113.1 in July after a 5.7% m/m decline to 101.9 in June, indicating Australian consumer confidence climbed for the first time in four months and by the most in 13 months, according to the latest Westpac Banking Corp. and Melbourne Institute survey. The current condition index increased to 112.2 from June’s 101.0. The expectation index advanced to 113.7 in July from 102.4 in June.

Источник: Hans Nilsson

14.07.2010