Euros Battle Inflation, Growth
More data of economic slowing in Europe’s largest economy,
Germany, is sending
euro FX futures
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descent that continues a four-and-a-half-month down channel.
Germany is pivotal in the European Community (EC) because
its economy accounts for one-third of the 12-nation bloc’s GDP and because
it swallows one-fifth of the region’s exports. Troubling data out today showed
that German business confidence fell to nearly a 22-month low. The German
economy is also expected to slow more than the rest of Europe with year 2001 GDP
forecast at 2.2% versus 2.8% for the rest of the EC. Orders for German
manufactured goods fell 3% in March and industrial production fell 2.8%.Â
The evidence of economic slowing comes as pestering reports
of price growth appear likely to box in the ECB’s leeway to continue stimulating
the economy by dropping interest rates (lowering interest rates can spark
inflation). Although the ECB recently stunned the market by upsetting analysts’ (baffling 28 of 29 economic prognosticators) estimates and cutting interest
rates in a surprise move by 25 basis points, inflation reports out today from
Italy hint that the ECB will not be able to continue cutting rates and may be
behind the curve in knowing what is happening in Euroland as the region moves to
within six months of circulating the single currency.
The
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low for the year. The
Swiss franc
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trade partner with the US, it is the currency most heavily weighted on the
dollar index. Hence,
June dollar index futures
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PowerRating) are rallying and banging up
against contract highs, up 1.13 at 117.71.
August pork bellies
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Implosion-5 market that gapped lower but pulled back to provide entry at
yesterday’s low and make good on its
Pullback From Lows
setup, are down 1.175.Â
June lean hogs
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that closed down. This type of action is indicative of follow through in the
direction of the outside bar’s close: down. Hogs have traded straight down from
their opening tick and are off .500 at 67.00.
June copper
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PowerRating)Â is
making good on its Turtle Soup Plus One
Sell setup, filling yesterday’s gap. Look for support in this contract here
as copper has filled the gap in the 78.85 area.Â
In the energies,
natural gas
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PowerRating) continues making good a decline out of its
four-month descending-triangle measured move. Nat gas remains a Implosion-5 List
contract and has tagged a new year-to-date low. The 3.9 area is where traditional
measured move analysis suggests the market will test.