Apart from the global economy shifting back and forth, ForexTime said the process is bedeviled by a whirl of mixed data.
According to the report, a mix of sentiments emerged from the US last week, as both positive and negative data came through to reflect a somewhat muddled image of what is happening in the US right presently.
Unhindered by the high mortgage rates, existing home sales shot up by 6.5% to reach 5.39M; a figure substantially higher than the predicted 5.15M.
Meanwhile, the housing data has been the most encouraging since 2009 and was reported as evidence of just how important to the health of the economy the housing sector is.
To dampen US spirits however, new home sales were not quite in line with existing home sales, falling to 497K and then further revised to 455K on August 23rd, raising question marks about the recovery of the housing sector.
Further discouraging were the jobless claims released on August 22nd ,which at 336K were a rise above the predicted 329K and a far move away from the 5 and a half year low of 320K recorded on August 15th.
“Wednesday, August 21st, saw a release of the Federal Reserve’s July Meeting Minutes, where most policymakers were in favor of Ben Bernanke’s plan to start gradually reducing bond-buying until finally putting an end to it in 2014. This week, the US is holding its breath for a number of key indicators such as core curable goods orders, out on the 26th and predicted at 0.6%, and CB consumer confidence, out on the 27th and expected at 79.6.
“Mixed data was also seen on the European front, where the disappointing French Flash Manufacturing PMI served as a contrast to the pleasing German counterpart. French Flash PMI failed to meet expectations, coming through at an unchanged 49.7 instead of reaching the hoped for 50.4. In juxtaposition, the German Flash PMI exceeded expectations by rising to 52.0 from July’s 50.7 and beating predictions of an expansion to 51.1,” the report read.
ForexTime also said that the final German GDP released on August 23rd rose by 0.7% as predicted; a two year high and a definite indication of the gulf between Germany and the rest of the eurozone.
Whilst other European countries cower in the shadow of austerity, Germany seems to be making its way to the light.
This week too, all eyes are on Germany as Europe awaits the Ifo Business Climate Index to rise to 107.01 from 106.2 and the unemployment levels to drop from 7K to 5K.
“Things were looking gloomy in the world’s third largest economy last week, with the Japanese trade deficit coming in at -0.94T on August 19th, much higher than the forecast -0.73T and practically double the figure recorded in 2012. Shinzo Abe’s policy of devaluing the yen to boost exports may be wise for achieving certain goals but has come with a huge consequence too.
“Nonetheless, Japan seems to be staying true to its aggressive policies and intends on ploughing its way through these difficult times by focusing on the country’s exports despite other drawbacks. Data out this week includes Japan’s National CPI on August 30th, anticipated to rise by 0.6%; if predictions are fulfilled it will mark the second consecutive yearly rise in National CPI for Japan.
“In the United Kingdom, the economy is continuing its recent bout of progress, with the second estimate of the UK GDP released on August 23rd and up by 0.7%, spurred on by positive services and manufacturing data, higher exports and imports and a rise in consumer spending. Of utmost importance this week in the UK will be Bank of England Governor Carney’s speech on August 28th, where he is expected to persist in keeping interest rates low for as long as possible,” it contained.