Forex Investment and Currency Trading

Housing starts rose 1.5% to 598k in August, up from 589k in July, was in line with the consensus. Single-family starts and permits edged down slightly in August, however. Analysts view this decline as a blip in the steady upward trend of recent months, a trend that is expected to continue, given the sharp declines occurring in new home inventories.
There were small upward revisions to starts in June (590k from 587k) and July (589k from 581k). In August, single-family starts edged down to 479k from 494k, while multi-family starts rose to 115k from 85k. They rose in the Northeast and Midwest, [...]

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The trade deficit rose to $32.0 billion in July (cons $27.3bn) from $27.5 bn. Imports surged 4.7% m/m, with goods imports excluding oil up 6.1% m/m. The strength included a 21.5% m/m rise in auto imports, probably related to the cash for clunkers auto rebate program. Exports, +2.2% m/m, continued their recent recovery. If the July level of imports were sustained throughout the quarter (unlikely), net exports would subtract around ¾ of a point (annual rate) from Q3 real GDP growth. More likely, the strength in imports will be partly reversed, especially in auto imports. Also, much of the surge [...]

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G20 finance ministers and central bank governors agreed on Saturday to maintain current stimulus policies until the recovery was fully secured, implying that stimulus policies would be maintained into next year. The communique commented, “Financial markets are stabilising and the global economy is improving, but we remain cautious about the outlook for growth, jobs”. Ecofin chair Borg said that current stimulus policies would need to be maintained into 2010. The communique also stressed price stability, a point reference by ECB President Trichet and German FM Steinbrueck (as well potentially as others). Mr Trichet commented that “it is not the time” [...]

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The August employment report gave mixed messages and was a bit weaker than expected on balance due to a rising unemployment rate and small downward revisions to previous months. However, it leaves the basic trajectory of labor market improvement in place.
Payroll employment fell 216k in August; this was the smallest monthly job loss since August 2008. There were downward revisions of -49k to previous months. The pace of job losses moderated in construction (-65k from -73k) and services (-80k from -154k), though it increased slightly in manufacturing (-63k from -43k). The healthcare sector continued to be the strongest, adding 47k [...]

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