Germany 09:00 BST

The German Business Climate Index combined with the German Current Assessment and German Business Expectations form a combined index, which rates the current German business climate as well as business expectations for the next six months. All three indexes are composite and based on a survey of manufacturers, builders, wholesalers and retailers.

What the forecasters say

The most important of the three is the German IFO Business Climate Index which is forecast to see a 0.40 fall, with markets likely to respond negatively to a published figure of 108.10 or less.

The German Current Assessment does not consider future expectations, and is expected to fall by 0.20 to a likely published figure of 114.10, which is in line with what we would expect given recent German GDP data.

Finally, we have the German Business Expectations Index that measures the future confidence of German businesses whilst excluding the forecasts regarding current business conditions. The index is currently expected to fall by 0.50 resulting in a forecast published figure of 102.50. The markets are likely to respond negatively to any published figures that are less than the forecast.

Our opinion

Germany still maintains the role of insurer when it comes to the euro zone even as we begin to see a possible resolution to the Greek issue. As a result we would expect to see some negativity within the euro if the current negative forecasts are reflected in the published figure. With both the Euro and the DAX likely to suffer from negativity throughout morning European trading.

View Points – Currencies and Indexes

The combination of releases is likely to place some downward pressure on the major European exchanges including the CAC, EuroNext and especially the DAX. As a result if the forecasts are equalled or not met the Euro is likely to see meaningful negative pressure, interesting currency pairs that may be worth a quick look may include the EUR/CAD, EUR/AUD, EUR/GBP, EUR/USD and EUR/JPY.


The United states 13:30 BST

US Quarter-on-Quarter Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health and is recalculated on a quarter-by-quarter basis.

What the forecasters say

Nearly all independent forecasts as well as the city forecasts suggest that US Quarter-on-Quarter GDP is likely to rise from minus 0.70% shrinkage a forecast published figure of -0.20% shrinkage or better.

Our opinion

Although the forecast data suggests a strong upward revision within US GDP, the team at your personal economist have had a look at the underlying data and we have concerns regarding the US Economies overall state, however these are revised figures and the smaller level of negativity may explain wider trends within the USD and US indexes.

We are of the opinion that the revision to -0.20% shrinkage from -0.70% shrinkage may be significant enough to take in to account the recent mix of both positive and negative data we have seen out of the US.

View Points – Currencies and Indexes

Overall, it looks more likely that US GDP will be the dominant force creating upward pressure within the USD, the S&P 500, DJIA and Russell 2000 with interesting currencies likely to include the USD/CHF and USD/JPY, with the USD/EUR USD/GBP and USD/CAD also likely to be of merit.



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