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FX Day Trading - 5 September 2011
Euro stumbles on Merkel and Finns
Zero growth in US jobs
Services PMIs today
Among the multiplicity of DIY surveys competing with the "official" Office for National Statistics data is BDO's High Street Sales Tracker.
It measures monthly sales at "more than 70 mid-market retailers with some 10,000 individual stores". The latest report, published yesterday, shows total turnover down by 2.2% in August compared with the same month last year.
There were no highlights in the latest Greek retail sales figures. The Hellenic Statistical Authority reported a fifteenth consecutive monthly decline in June. Sales were down by an annual 8.2% after an 8.7% drop the previous month. Statistics like that are a worry to everyone involved in the bailout process.
For it all to work, the Greek economy must grow, and it is not doing so. Finland is still not happy with the idea of throwing what it sees as good money after bad into a second bailout.
The Finnish government wants Greece to lodge collateral against its borrowings. The demand has been an obstacle to progress on the bailout deal, not least because it would put Finland in a privileged position. EU ministers are trying to come up with a compromise but nobody has had any great ideas so far.
German voters appear to sympathise with the Finns. At yesterday's election in Mecklenburg-Western Pomerania Chancellor Merkel's CDU received 23.3% of the votes while the opposition Social Democrats won the day with 36.1%.
German political analysts believe Mrs Merkel's defeat – in her home state – was a protest against taxpayers' money going to Greece, perhaps forever.
Together with Finland's stance on collateral, the grassroots resistance in Germany will make other country's leaders ask themselves whether the political cost of helping Greece might be more than the exercise is worth.
It is all getting a bit stressful in Euroland and in the States things are hardly more upbeat. Last Friday's employment report showed zero growth in non-farm payrolls.
The media rather went to town on the "zero" bit, stressing that it was the first time since 1945 that payrolls had not grown at all and implying it was therefore the worst post-war outcome. It was not, of course, it was just a statistical coincidence.
But the figure was not good for confidence. Equities and oil spreads took a hit and gold went higher. Currency spreads showed only limited reaction to the figures.
With North America on holiday, today's PMI shoot-out will be missing one of its most important contenders.
The Australian services sector purchasing managers' index surprised everyone this morning by rising three points to 52.1 but in Europe the direction is almost sure to be downward.
The projections are for Britain, Germany and Euroland all to achieve figures better than 50, with the UK retaining last month's lead at around 54.
The Sentix index of Eurozone investor confidence is hardly going to show an improvement after last month's spread betting market mayhem, and Euroland retail sales will probably be negative too. Gloom!
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'Oil Spreads Take a Hit as US NFP Data Sends Markets Lower', Article by Moneycorp, last update: 5-Sep-11
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