Fed Beige Book Summary

Says:

• Economy ‘continued to expand at a modest pace’
• Resedential real estate was weak overall
• ‘Demand for services was generally positive’
• Pace of manufacturing ‘slowed in many districts’
• Some districts saw ‘mixed or weakening activity’
• Consumer spending rose slightly in most districts
• Treasury official sees need for U.S fiscal consolidation
• Most manufacturing contacts ‘less optimistic’ than before
• Five districts reported ‘modest or slight’ growth
• Labor markets were generally steady
• Economic growth slowed in Richmond district
• Loan demand was ‘stable to slightly weaker’

Fed’s Beige Book says economic activity slows in most regions

• US Economy slowed in 8 of 12 regions
• Spending in majority of regions saw ‘modest growth’
• Four districts ‘continued growth modestly’
• Loan demand ‘more mixed’ than in prior beige book
• Droughts, flooding adversely affected seven regions
• Wage pressures ‘subdued’ inflation pressures weakend
• Most residential real estate is still weak
• Labor market remained soft in most regions but most regions reported modest hiring increases
• Nonfinancial services growth advanced further
• Manufacturing was steady or slowed in many regions

The main headline that 8 of 12 regions slowed is not a good sign at this point of the business cycle. The growth in the 1st and 2nd quarters has been below the expectations and with the economy currently in the 3rd quarter this would be the 3rd disappointing quarter in a row.  The US needs jobs to push out of the doldrums.  Washington consolidation and lack of credibility has damaged the US and may still lead to a downgrade from rating agencies.  Corporations have plenty of cash to hire, but have not had the courage to do so as of yet.  If they open up the coffers, the growth can happen. If they don’t because of one reason or another, there is little that can be done.

US Fed Beige Book Rundown

Fed Beige Book Says:

• economic recovery slowed in some areas
• economic activity ‘continued to increase’
• some fed districts reported ‘modest’ increases in economy
• most districts reported ‘sluggish’ residential real estate
• credit conditions were ‘tight’ in most districts
• labor markets ‘improved modestly’ across regions
• wage pressures were ‘contained on whole’
• manufacturing expanded, while some districts noted slowing

EUR/USD & The Week Ahead

With Europe off another day, the week in the far east is opening very quietly, with little news and economic data. However, the EUR/USD pair could be gearing up for an exciting week as more news is sure to hit the wires as the world tries to revive its economy and a number of important economic releases out of the US are expected, namely Retail Sales, CPI, TIC Flows, the Fed’s Beige Book and the University of Michigan’s Consumer Confidence Indicator. On a the daily perspective with this slew of critical US economic data to be released, it will be interesting to see how the pair holds up with little technical support as we look at the retracement below. We will be tracking this closely in the days to come.

EURUSD moves to new highs on the weaker Beige Book

The EURUSD has moved higher post the Beige Book.  The price has now breached the 100 hour moving average after 3 hour attempts that could not muster a close above key level.  The current level comes in at the 1.2614 level.  The high yesterday came in at 1.2677.   This is the next target.  Above that, the 200 hour MA at the 1.2694 level comes into play. Watching the hourly close for confirmation.

Headlines from Feds Beige Book

•  SIGNIFICANT PICKUP NOT EXPECTED UNTIL LATE ’09, 2010
• ECONOMY DETERIORATED FURTHER IN FEBRUARY, FED SAYS
• SPENDING `VERY WEAK’ EXCEPT FOR FOOD, DRUGS
• COMMERCIAL REAL ESTATE `WEAKENED SIGNIFICANTLY’
•  LITTLE OR NO SIGN OF SLOWING IN HOUSE-PRICE SLIDE
•  BOOK SAYS ECONOMIC DETERIORATION `BROAD BASED’
•  RESIDENTIAL REAL-ESTATE MARKETS `STAGNANT’
• CITES `PRONOUNCED DECLINES’ IN MANUFACTURING
• BUSINESS-LOAN DEMAND DOWN, CREDIT `REMAINED TIGHT’
• HOSPITALS SEEING LESS DEMAND FOR SERVICES AS PEOPLE ELECT NOT TO HAVE ELECTIVE SURGERY
• DISMAL HOLIDAY SALES.  SOME PICKUP IN JAN/FED
• SLIGHT DETERIORATION IN CREDIT QUALITY FOR CONSUMERS/BUSINESSES

The recovery is being pushed out to lat 2009/2010.  The report should hurt the dollar.

US Beige Book of economic activity across the US to be released at 2:00 PM

The Feds Beige Book will be released at 2:00 PM today. The Beige Book is an anecdotal report of the economic conditions across the US.  It is meant to be timely and also looks at the varous regions (Federal Reserve districts).   I would expect that conditions remain weak with employment still weak along with growth and housing.

Forex News Fed’s Beige Book released.

•  GENERALLY WEAK  MANUFACTURING, HOUSING DECLINED
• BOOK REPORTS ECONOMY WEAKENED FURTHER IN PAST MONTH
•  MOST COMMERCIAL REAL-ESTATE MARKETS DETERIORATED
• REPORTS GENERAL WEAKENING IN MOST LABOR MARKETS
• GENERALL WEAK MANUFACTURING, HOUSING DECLINED
• MOST COMMERCIAL REAL-ESTATE MARKETS DETERIORATED
• REDUCED OR LOW ACTIVITY ACROSS RANGE OF INDUSTRIES
• GENERALLY WEAK;’ MANUFACTURING, HOUSING DECLINED
• ECONOMY WEAKENED FURTHER IN PAST MONTH
• GENERAL WEAKENING IN MOST LABOR MARKETS
• WAGE PRESSURES REMAINED LARGELY CONTAINED

Next Page »