Intraday Market Thoughts

Eurozone GDP contracts; US Indus Production Next

by Patrik Urban
Feb 15, 2012 12:20

Eurozone GDP declines; UK claimant count rose and unemployment steady; BOE predicts CPI below target range and stronger GDP by 2013. Market turns to Empire state manufacturing; TIC flows; Industrial production; capacity utilization and later to FOMC minutes. More details on Ashraf's appearances at the New York Traders Expo.

The greenback is mixed. It is weaker against AUD, NZD and CAD and stronger against EUR, GBP and CHF. European equities are gaining between 0.3% and 0.9% and relative strength winners are NZD followed by AUD.

BBC reported that Greek leaders signed a pledge to implement bailout terms as demanded by Eurozone which should increase the chances of a successful outcome for the Eurogroup conference call that should start at 11:00 am ET. EURUSD was not able to gain traction and trades lower around 1.3150.

Today's data showed that Eurozone Q4 growth contracted on q/q basis but slowed across the region on annual basis. French GDP declined to 1.4% from 1.5%, German GDP fell to 1.5% from 2.6% and Italian GDP contracted 0.5% from previous +0.3%. Eurozone as a whole slowed to 0.7% from 1.3% y/y and printed -0.3% from 0.1% q/q. Data confirmed that five members already entered into a recession.

In the UK, claimant count rose by 6.9K in January, considerably above December's 1.9K. The claimant count rate kept steady at 5% and ILO unemployment rate remained in December at 8.4%. GBPUSD was able to recover a portion of the previous losses and trades back around 1.57.

In the inflation report governor King reiterated that CPI should fall to 2% by the end of 2012 a reach 1.8% by the end of 2013. GDP should grow 3% in 2013.

Data-rich NY session starts at 8:30 am ET with Empire state manufacturing index that is seen higher in February at 14.7 from 13.5 followed at 9:00 am by net TIC flows that are expected to increase in December to USD 62.3 bln from USD 59.8 bln.

January industrial production and capacity utilization are due at 9:15 and are anticipated higher at 0.6% from 0.4% and 78.6% from 78.1% respectively.

Minutes from January FOMC meeting are due at 2:00 pm and could provide insights into the level of disagreements over more QE.



Latest IMTs