German Factory Orders Surge On Increasing Foreign Demand

Fundamental Headlines

• Slump Makes Trade a Priority for G-8 – Wall Street Journal
• ECB Says Slow Lending Hinders Recovery – Wall Street Journal
• Manufacturing drop hits pound – Financial Times
• Debt Burden Accelerates Global Power Shift as G-8 Countries Lose Influence – Bloomberg
• U.S. Should Consider a Second Stimulus Package, Obama Adviser Tyson Says  – Bloomberg

EURUSD – German factory orders in May rose 4.4% which shattered expectations of 0.5% and was the moist in almost two years. The increase helped pull the yearly figures up to -29.4% from -37.1%. An 8.2% gain in exports helped drive the increase in activity providing encouraging signs that the region’s economy is stabilizing. The ECB left their benchmark rate unchanged last week but left the door open for further easing which may not be needed if the economy continues to show signs of improvement.  Discuss the topic and your trade ideas in the EUR/USD Forum.

GBPUSD – U.K. industrial orders unexpectedly fell by 0.6% in May versus forecasts of a 0.2% gain. A 1.1% decline in basic metals led declines in several categories. The first drop in activity in three months will raise concerns over the scope of a recovery for the economy. Expectations are rising that the BoE will increase their current bond purchase program by £25 billion and signal that it will be the final efforts of the government. The upcoming rate decision by the BoE is expected to see them keep their benchmark rate unchanged but watch for an accompanying statement outlining their quantitative easing intentions.  Discuss the topic and your trade ideas in the GBP/USD Forum.