Euro Falls on Weak Data; US Pending Home Sales Next, New Trades up

USD has had a slight upside bias since London open with the majority of gains seen against the EUR and GBP. German labor market worsened slightly, Eurozone economic sentiment fell and UK CBI Sales dropped. Focus turns to Pending Home Sales. Our Thursday Premium trades are up, New trades for USDJPY, EURUSD, EURGBP, FTSE-100, S&P500, while our trades on Gold & Silver remain in progress.

Euro fell on combination of weak data and renewed rumors that Italian finance minister Tremonti is about to resign. These factors, combined with low demand from domestic buyers seen during recent Italian bond auctions, sent Italian yields higher. As a consequence, Italian/German 10 year spread widened. The latest 10 year bond auction worth of EUR 8 bln sold at the highest yield since February 2000.

On the data front, German Unemployment Change worsened in July to 11K people from previous -8K while the unemployment rate stayed the same and in line with expectation at 7%.

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Eurozone economic sentiment in July fell to 103.2 from previous 105.4 and UK CBI Realized Sales dropped to -5 from previous -2 which marks second negative print in a row after almost a year of positive readings.

The US session kicks off at 8:30 am ET with Jobless claims that continue to hover above the 400K mark. Labor market improvement is unlikely as long as claims continue to be stubbornly high.

10:00 am ET will bring June Pending Home sales data. After surging 8.2% in May, analysts expect sales to fall back below zero and print -1.5% as underlying trend remains soft. Weak labor market combined with large number of foreclosures suggests that the housing market has a long way towards a sustained recovery.