European Instability and Macro Numbers
28-11-2011
Trading opens this week with the uncertainty of the European debt crisis, as well as the sharply declining markets of the previous week. Belgium and Hungarian credit ratings were reduced at the end of last week.
However, not all was doom and gloom, with the markets receiving some good news over the weekend. The Italian publication “La Stampa” reports that the IMF is ready to provide financial assistance should the Italian debt crisis worsen. The bailout is reported to be comprised of 800 billion dollars in tandem with the European Central Bank (ECB). Italy is the third largest economy in the EU with a debt of 1.9 trillion dollars.
Other noteworthy news comes from the United States concerning the Black Friday sales figures, indicating an increase of 7% over the previous year, with a 24% increase in sales over the internet.
This week will be filled with macro statistics, with the most important and influential appearing in the list below.
• On Monday, housing sales figures for October will be released and are widely expected to hold their ground at 313 thousand.
• Tuesday will see the release of the Case Shiller index and is expected to indicate a decline in real estate prices of 0.1%. In addition, the Consumer Confidence Index will become available and is expected to show a slight increase.
• The ADP survey comes out on Wednesday, preceding by two days the employment numbers in the United States. The survey will probably show an increase of 125 thousand new jobs. Also, statistical data relating to the policies of the Federal Reserve will also become available.
• Thursday will feature real unemployment numbers in the United States, expected to decline 390 thousand.
• Official employment and unemployment numbers for the United States and Canada will be released on Friday. Statistics are expected to reveal an increase of 119 thousand jobs in the market, not including the farming industry, and unemployment of roughly 9 percent.
The dollar continues to gain ground, as stock markets decline and traders desperately search for more secure investment opportunities. The USD and the JPY are considered the most stable currencies during times of uncertainty.
However, the encouraging news from Europe regarding the involvement of the IMF will probably cause some fluctuation in the EUR/USD and other currency pairs featuring the dollar and the euro. Other currencies, especially the AUD and NZD, could regain some of their lost value from the previous week, as reports from Europe become believable.
