Forex Investment and Currency Trading

Friday October 31, 2008

U.S. Economic Data and Events

Time / Event / Period / Market Call / Prior Read

8:30 Personal Income SEP 0.10%  0.50%
8:30 Personal Spending SEP -0.20%  0.00%
8:30 PCE Deflator (YoY) SEP  4.20%  4.50%
8:30 PCE Core (MoM) SEP 0.10%  0.20%
8:30 PCE Core (YoY) SEP 2.50%  2.60%
8:30 Employment Cost Index 3Q 0.70%  0.70%
9:45 Chicago Purchasing Manager OCT 48.0  56.7
10:00 U. of Michigan Confidence OCT F  57.5  57.5
10:00 NAPM-Milwaukee OCT  n/a  46
14:00 Fed’s Bernanke speaks on mortgage finance at UC Berkeley

The weak September employment report showed a sharp drop in both employment and the average workweek. As a result, the index of aggregate weekly hours, which reflects the combined effect of both measures, fell a sizeable 0.5% in the month. The implied drop in income was moderated by a 0.2% monthly gain in wages in the month. The personal income measure will likely also be biased down slightly from the two hurricanes in the Gulf region in the month. In total, it’s assuming that personal income likely dropped 0.4% in the month which will almost fully offsets the 0.5% gain in August. This weakness is expected to be more than matched by an expected 0.5% drop in personal consumer expenditure. This decline largely reflects the earlier-reported 1.2% plummet in September retail sales. The personal spending numbers will provide the monthly detail of the overall Q3 consumer spending growth rate that were released in the Advance GDP report on Thursday.

Canadian Economic Data and Events

8:30 Gross Domestic Product MoM AUG -0.40%  0.70%

July GDP rose a much stronger than expected 0.7% reflecting strong gains in a number of sectors including energy, manufacturing and wholesale trade. Preliminary numbers for the latter two sectors are indicating a likely sizeable retracement of the July gains with manufacturing off -3.7% and wholesale trade down -3.3%.  The mining, oil and gas extraction sector jumped 4.2% in July reflecting both transitory and permanent increases in output. The retail sales report indicated that the volume of activity was down a slight -0.3% in August. In total these numbers suggest that 0.5 percentage points of the July increase will be retraced in August. The data suggests that overall GDP growth will likely remain positive in the third quarter though the August drop if realized suggests some downside risk to current forecasted increase of an annualized 2.5%.