Forex Investment and Currency Trading

Payrolls declined by 467k in June, a larger decline than the consensus (-365k) expected, while the unemployment rate rose to 9.5%, a smaller rise than the 9.6% figure market projected. The report on balance was weaker than expected, owing to the weak payroll print and a decline in the workweek. The main message is that last month’s slowing in the pace of payroll decline overstated the pace of improvement in the labor market; but the report does not fundamentally change the trend of gradual improvement.
There was a net revision of +8k to the prior two months, and despite the weaker print [...]

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CHF: Reported intervention against EUR & USD
Reuters & Bloomberg yesterday reported speculation that the SNB has been buying both EUR and USD, consistent with a dramatic move in the CHF crosses. The perceived involvement in USD/CHF came as a surprise to the market, as the SNB had previously stated it would specifically buy euros as part of its intervention policy. But, the weakness in the USD and JPY had meant that daily estimate of the SNB’s trade-weighted exchange had appreciated by more than the level of EUR/CHF would suggest. Indeed, the Swiss TWI was at its strongest post-intervention level ahead [...]

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Retail sales disappointed in April, falling 0.4% m/m (consensus: 0.0). The breakdown of the retail sales report was particularly surprising. Auto sales actually inched up by 0.2% despite the plunge in unit new vehicle sales in April. This could be attributed in part to an increase in used vehicle sales and price effects. Retail sales ex-autos fell 0.5% m/m versus forecast for a 0.4% rise. Similarly, “core” retail sales, which nets out autos, building materials, and gasoline sales, unexpectedly declined 0.3%. This follows on a 1.0% slide in March, leaving core retail sales down a record 2.2% y/y (data only [...]

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During the past 24 hours there have been comments by three FOMC members, including Chairman Bernanke yesterday. The general theme has been one in expressing caution about recovery.
Speaking before the JEC, Fed Chairman Bernanke struck a similar tone to the latest FOMC statement, noting that the recession is starting to fade. As with SF Yellen last night, Mr Bernanke pointed to the pickup in consumer spending in Q1 and leveling off in existing home sales as indications that the pace of contraction in the economy may be slowing.
The gist of Chairman Bernanke’s comments were reiterated by SF President Yellen in [...]

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