Forex Daily Outlook May 3 2012

US Unemployment claims, US ISM Non-Manufacturing PMI and EU rate decision are the major market-movers. Let see what awaits us today.

In the US, Unemployment Claims measuring the number of Americans filing initial claims for unemployment benefits. The recent readings were disappointing with a higher than expected claims of388,000 in the previous week while expected a smaller figure of 374,000. This time a drop to 381,000 is anticipated.

Later in the US, ISM Non-Manufacturing PMI, measuring sentiment and economic conditions among Service sector managers, dropped more than predicted to56.0 in March from57.3 in February while expected to decline to 56.9. Nevertheless this reading still indicates expansion.

Later on in the US, Prelim Non farm Productivity, measuring labor output in the manufacturing sector excluding the farming industry, gained 0.7% in the fourth quarter of2011. A Drop of 0.4% is expected for the first quarter of 2012.

More in the US, Prelim Unit Labor Costs, measuring price of labor in the non farm industries, increased by 1.2% in the fourth quarter of 2011, from a 2.1% decline in the third quarter while anticipated a smaller gain of 0.9%. Another increase of 2.7% is predicted for the first quarter of 2012.

Moreover in the US,John William President of the Federal Reserve Bank of San Francisco and Dennis Lockhart, President of the Federal Reserve Bank of Atlanta are scheduled to speak in Santa Barbara. As FOMC voting members clues may be provided on future monetary policy and interest rates.

Also in the US, Natural Gas Storage increased to 47 billion last week from 25 billion in the week before. A similar figure is predicted.

Finally in the US, Challenger Job Cuts, the number of job cuts that were announced by employers over the past month, -8.8% is likely similar to the last report.

In Europe, French Industrial Production, monthly measurement to vale the total manufacturers, mines, and utilities output, due to rise up 0.30% on March up to 0.70% now.

Later in Europe, Producer Price Index (PPI) the producers price change for finished goods and services on the past month no change is predicted and  0.60% is due to remain.

More in Europe, Minimum Bid Rate. ECB maintained interest rates at 1.0% in April as expected and is likely to keep rates unchanged this time. An important ECB Press conference will follow the release of the Minimum Bid Rate.

In Great Britain, Nationwide House Price Index (HPI); housing industry’s important indicator to value the selling price change of mortgages homes backed by Nationwide, decreased 1.0% in March following 0.4% gain in the previous month while an increase of 0.3% was predicted. This time a 0.6% gain is expected.

Later in Great Britain, Services Purchasing Managers’ Index (PMI); Monthly Survey to value the business conditions like employment, new orders, supplier deliveries, inventories and so on, decreased less than predicted reaching55.3 in March after53.8 in February. A further decline to 54.4 is anticipated,

Later on in Great Britain, Halifax HPI increased 2.2% in March from 0.4% drop in February while a decline of 0.3% was anticipated. A 1.2% increase is predicted this time.

 Asad Khan
Financial Analyst  (CFB) Trading Team