Fundamental Headlines
• European Stocks Tumble – Wall Street Journal
• ECB Allotment Eases Tensions – Wall Street Journal
• ECB Grants Banks 110 Billion in Funding - Financial Times
• ECB Lends $136 Billion for Six Days to Smooth Expiration of One-Year Loan - Bloomberg
• Manufacturing Weakens From China to Europe as Economic Recovery Moderates - Bloomberg
EUR/USD: German retail sales advanced 0.4 percent in May after falling a revised 0.5 percent the month prior, while the annualized rate slid 2.4 percent subsequent to plunging 3.6 percent in April, the German federal statistics office in Wiesbaden said today. Looking at the breakdown of the report, clothes and shoes sales advanced increased 2.7 percent after falling some 3.1 percent in April, while sales of cars and vehicles dived 3.7 percent in May. Today’s advance in retail sales can be partially attributed to the rise in consumer confidence and the decline in unemployment as the jobless rate was unchanged for the month of June after falling to a 18 month low in May. Indeed, the labor force seems to have gained some ground on the back of the governments working scheme which encourages employers to cut labor hours instead of their workforce. Going forward, we may see retail sales scale back later on this year as the sovereign debt crisis continues to weigh on the markets. As of late, Moody’s announced that it is placing Spain’s Aaa rating on review for a downgrade. This comes to no surprise as Spain is likely to face a slow down in growth on the back of recent measures by the government to accelerate fiscal consolidation, while the government battles higher borrowing costs. Meanwhile, the European Central Bank announced that it lent banks 111.2 billion euros for six days in order to help them cope with the expiry of its landmark 12-month loans today. To discuss this and other topics, please visit the EUR/USD forum.
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Written by Michael Wright, Currency Analyst
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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, and Forex Trading Weekly Forecast
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