Mr. Danish FX's blog

Attached is the Forex news preview for today. 

The Producer Price Index (PPI) comes out at 2.4% from the previous 1.8%.  1.8% was forecast for this release as well.

The Trade Balance number comes out at -7.4B from the previous -7.5B.  This was forecast at -7.5% once again.

The PPI Output comes out at 1.4% from the previous 0.9%.  A drop to 0.6% was forecast.

As both PPI figures came out better than expected and trade balance was pretty much on par, the GBP was able to make some strong initial gains. 

The Machine Tool Orders comes out at 0.3% from the previous 3.3%.  This drop signifies that the value of new machine tool orders has decreased.

After this news, the JPY took a hit across the board.   

The Economy Watchers Index comes out at 35.5 from the previous 36.9.  Since this reading is below 50, this shows that there is a decreased sentiment from service businesses regarding the Japanese economy.

Highlights from the BOJ's Shirakawa:

• The BOJ will hike rates if economic uncertainties clear
• Chance of U.S. economy stalling high over the near-term
• Japanese economic slowdown to continue for some time
• BOJ is closely watching inflation expectations
• Economy seen returning to a moderate expansionary path

The Employment Change number comes out higher than expected at 19.2K from the previous 14.6K.  10.0K was forecast.

The Unemployment Rate comes out a drop higher as well at 6.1K from the previous 6.0%.  No change was expected. 

With the unexpected job growth, the CAD was able to firm up initially vs. the USD after this data. 

Crude Oil has hit another high today at $125 a barrel.  We see this as the USD has taken a hit through Tokyo and the start of London session. 

At 7:00 AM, the Canadian Employment Change and Unemployment Rate are released.  The Employment Change number gauges the change from the previous month of people in the work fource.  As jobs and this data increase, it typically has a positive effect on both the currency and the economy.

The Unemployment Rate gauges the percentage of the total work force unemployed and currently looking for work during the prior month.  A drop in this percentage is positive to both the currency and economy.

A drop is forecast in the Employment change for this release.  10.0K is expected from the previous 14.6K.

No change from the 6.0% is forecast for the Unemployment Rate.

The French Industrial Production comes out lower than forecast at -0.8%. from the prior 0.3%.  This was forecast at -0.4%.

At 2:45 AM, the French Industrial Production number is released.  This number gauges the value of output produced by mines, utilities and factories.  As this level rises, it is a strong sign for the economy and typically the currency will benefit.

This release is forecast for a drop to -0.4% from the previous 0.3%.