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Friday News...

Employment Data Ready To Move The Markets

Fri, 04 Aug 2006 01:55:38 GMT
by Daily FX Research Team

1. German Factory Orders
2. Canadian Unemployment Change
3. US Non-Farm Payrolls
4. Canadian Ivey Purchasing Managers Index

German Factory Orders (JUN) (10:00 GMT; 06:00 EST)
(MoM) (YoY)
Consensus: 1.3% 9.1%
Previous: -1.2% 17.3%

Outlook: Factory orders in the world’s third-largest economy are expected to rebound from last months decline, but slow to a 9.1 percent annual rate of growth as higher lending rates slow activity. A series of interest rate hikes, four in the past eight months and perhaps more to come, have been boosting the European currency and thus hurting foreign sales of German-made goods, as seen in May’s decline in exports. Although it would mark a significant slowdown from May’s multi-year high on the shorter time frame, a 9.1 percent annual pace is still strong compared to recent years. The European Central Bank raised its benchmark rate to 3.00 percent this morning and indicated the potential for more hikes to come, reflecting predictions of sustained inflation and growth to drive it. Much of pull needed for factory orders may need to come from the German and other Europeans as signs that the US consumer has trouble purchasing costlier trans-Atlantic goods puts exports in question. However, if the European consumer proves unreceptive, not only could factory orders slow, but the ECB’s watch on growth could yield a different picture.

Previous: German factory orders fell by 1.2 percent in the month of May from a 4 percent jump in April as a stronger Euro made German goods less competitive in foreign markets. On the longer, annual term though the gauge accelerated 17.3 percent as factories in Europe’s largest economy have been enjoying a wave of economic strength throughout the region. An improving labor market has also been helping the region shrug off higher oil prices and an 8 percent gain on the dollar this year, which has helped sustain the downstream pull-through for goods from the consumer. Foreign orders dropped 4.2 percent on the month and domestic consumer demand jumped by 1.6 percent. The concerning element of the gauge was plant and machinery, which declined by 2.6 percent, possibly indicating that companies are weary about the future as the ECB continues to raise interest rates yet the global outlook for growth appears unpromising.

Canadian Net Change In Unemployment (JUL) (11:00 GMT; 07:00 EST)

Consensus: 25,000
Previous: -4,600

Outlook: The Canadian economy is forecast to have added 25,000 jobs in July, a rebound from June’s first net loss of the year. In turn, the unemployment rate is expected to hold at its 32-year low, 6.1 percent for the third straight month. Since the Bank of Canada announced that no additional increases were need on the 11th of July, its currency’s price has relaxed. This should be particularly beneficial to companies wanting to invest in skilled employees to broaden capacity restraints that have made it hard to meet demand from both domestic and foreign consumers. At home, Canadians have used the high level of employment and steadily rising wages by purchasing more goods from domestic producers. Another factor lending itself to encourage hiring at firms were commodity prices. While producers of necessary goods continued to benefit from relatively high prices, which are increasingly finding their way into investments; a gradual easing of many of the raw materials have eased other sectors’ bills. As has been proven true so far though, extra oil-cash should give companies immunity from the highest interest rates since 2001, and allow them to hire more workers.

Previous: Against predictions for a June’s payroll additions to tally the year-low, 10,000 new Canadian jobs, employers surprised the market by unexpectedly shedding a net 4,600 workers. On the other hand, the labor force contracted to 17.6 million, down 10,700 participants, allowing the unemployment rate to hold at its 6.1 percent lows. Layoffs were led by construction and trade industries as builders fired 19,200 and 16,700 workers respectively. Signs of economic weakness such as a weaker labor market have prompted the Bank of Canada to pause in its tightening cycle, as the trade and construction industries are ailing from higher borrowing costs and a stronger Canadian dollar. In fact, Canada’s trade surplus unexpectedly shrank in April to the smallest level in two and half years as auto exports became less competitive overseas. The Canadian dollar peaked on May 31st, which especially hurt June’s exporting industry, but has since relaxed as the market believes that the BoC is done with raising rates.

US Net Change In Non-Farm Payrolls (JUL) (12:30 GMT; 08:30 EST)

Consensus: 145,000
Previous: 121,000

Outlook: Employers in the United States are expected to expand hiring for the second straight month after May’s upset of 92,000 jobs added. This number may support the belief that a slowing labor market is still enough to sustain economic growth at higher borrowing costs. This month’s jobless claims have shown that employers are still healthy enough to hold onto their workers as the amount of people who filed for benefits averaged 312,330 during the first three weeks of July and 307,600 in June. On a different note, wage growth is also expected to moderate to 0.3 percent from last month’s surprise jump, making it cheaper. Economists also note that companies do not need to add as many jobs because fewer people are entering the work force. Before his testimony to the Senate on July 19th, Bernanke stated that payroll growth of “more like 130,000 and possibly lower” will be sufficient for a stable economy. Another change for payroll predictions from the previous month’s release run up has been the shirking of other employment gauges. The manufacturing and service ISM employment components were largely overlooked, as was the surprising contraction in private company hires to 99,000 employees added. Many analysts and officials believe the non-farm payroll data could be the deciding factor in next week’s FOMC meeting where expectations for an eighteenth consecutive hike are split. Should payrolls disappoint, it could forecast slower consumer spending trends to come, and in turn cooler inflation that does not require further policy constraint.

Previous: The world’s largest economy added 121,000 payrolls in June, up from May but short of an expected 175,000. Hourly earnings rose 3.9 percent on an annual basis and the unemployment rate held near five-year lows at 4.6 percent. The report sent the dollar down, adding to speculation that the Fed would need to end its series of raising rates in order to prevent an economic downturn. Adding to inflationary pressures were hourly earnings, which rose 0.5 percent on the month when expected to rise by only 0.3 percent. The Fed is now between a rock and a hard place, with oil-induced inflation on one side and ailing economic expansion on the other. It is becoming more and more clear that the economy cannot handle further restriction from the Fed, so they will have to become more accommodative sooner, rather than later.

Canadian Ivey Purchasing Managers Index (JUL) (14:00 GMT; 10:00 EST)

Consensus: 53.0
Previous: 62.2

Outlook: The Ivey Business School’s poll of Canadian business and government purchasing managers is expected to slow for the second month in July as tight labor markets, high commodity prices and dear lending rates put pressure on firms. A generally accepted indicator of business health through purchasing activity, the index is expected to have declined to 53.0 in July from the prior month’s 62.2 print. Perhaps the biggest break on spending in the sector resided with supply-side costs like raw materials and labor. In July, crude oil prices, the barometer for production capability, spiked to an all-time high $78.40 per barrel. Employment has also become a costly input as the price for skilled labor has risen with the contraction in the jobless rate. June’s unemployment rate stayed at a 32-year 6.1%, and it is expected to stay there in July. Another problem for purchasing managers are high lending rates, which have made financing for big-ticket items or factory improvements an expensive venture. On the other hand, the Bank of Canada’s decision to put off anymore rate hikes is likely resound through the business community should revenues keep to healthy levels. Also, contradictory to the expected decline in the Ivey, a business conditions outlook indicator for the third quarter revealed manufacturers expect output to remain the same for the coming three months.

Previous: Purchasing activity amongst Canadian managers slowed more quickly than expected in June from its record high just the month before. On the back of May’s record 75.0 read, the June calculation printed a much-reduced 62.2. From the component reads of the overall gauge, the reasoning for this contraction became evident. An increase in both prices and employment, helped to weigh down the bottom line. On its own the employment gauge aligned itself to the improvements recorded by the government as its rose to 65.1, its highest read in recent history. At the same time, the price component rose to its figure since the October after Hurricane Katrina quickly inflated prices. Despite these shifts two improvements in the month were signals that inventories were being consumed and the time to fill orders was being reduced, suggesting demand was improving and capacity restraints were being answered with the increase in labor and investment.

Forex Capital Markets LLC
http://www.dailyfx.com

ACE trader recommended : 2/8/2006

AceTrader: Recommended Trades

02 Aug 2006 14:44GMT DAILY USD/ZAR OUTLOOK

Usd's weakness signals corrective rise fm 6.8151 has made temp. top at 6.9965 n weakness to 6.8800 is envisaged, below extends twd 6.8388 b4 rebound. Trade fm short side with stop as indicated as break wud defer n risk re-test of said res... [more]

rate : +6.8600+ target : 6.8600 resistance : 6.9545/6.9965/7.0475 position : Short at 6.9800 strategy : +Target met+ support : 6.8388/6.8151/6.8700

AceTrader: Recommended Trades

02 Aug 2006 13:23GMT SPOT GOLD DAILY OUTLOOK

As long as 645.80 holds, bullishness remains for recent upmove to resume n extend rise to 654.50 but 658.50 wud hold due to nr term loss of momentum. Trade fm long side with stop as indicated as be- low wud risk pullback twd 641.30 b4 up... [more]

rate : +654.50+ target : 654.50 resistance : 654.50/658.50/665.90 position : Long at 644.50 strategy : +Target met+ support : 651.80/645.80/641.30

AceTrader: Recommended Trades

02 Aug 2006 13:23GMT SPOT SILVER DAILY OUTLOOK

Current breach of 11.84 singals recent upmove has resume n upside bias remains for another rise twd 12.00 b4 correction due to loss of momentum. Trade fm long side with stop as indicated as be- low wud risk weakness twd 11.47 b4 up... [more]

rate : +11.97+ target : 11.97 resistance : 12.00/12.15/12.34 position : Long at 11.77 strategy : +Target met+ support : 11.65/11.47/11.31

AceTrader: Recommended Trades

02 Aug 2006 13:17GMT WEEKLY OUTLOOK ON SPOT GOLD

Last week's rebound fm 602.60 signals fall fm 676.10 has made a low n retrace. to 654.50 is seen but abv is needed for eventual re-test of said top. Buy dips with stop below 624.00 (prev. res), break wud prolong choppy trading n risk 617.30/40.. [more]

rate : +653.00+ target : 653.00 resistance : 651.80/654.50/676.10 position : +Long at 630.00+ strategy : +Target met+ support : 645.80/630.90/622.90

AceTrader: Recommended Trades

02 Aug 2006 12:15GMT GBP/JPY DAILY CROSS OUTLOOK

Despite stg's retreat fm 215.30, reckon 214.20/ 30 wud limit downside n bring stronger retrace. of decline fm 216.54 twd 215.50 later. Hold long with stop as indicated n only below 213.60 wud signal corrective rise fm 213.02 is over [more]

rate : +215.30+ target : 215.30 resistance : 215.30/215.70/216.21 position : Long at 214.60 strategy : +Target met+ support : 214.40/213.60/213.02

AceTrader: Recommended Trades

02 Aug 2006 08:32GMT WEEKLY OUTLOOK SPOT SILVER

Silver's strg rebound confirms correction fm 11. 81 has indeed ended earlier at 10.46 n rise fm 9.48 shud resume for re-test of said res, then 12.00. Buy dips with stop as indicated, break wud pro- long choppy trading n risk weakness twds 10.79... [more]

rate : +11.80+ target : +11.80+ resistance : 11.81/12.00/12.34 position : +Long at 11.25+ strategy : +Target met+ support : 11.47/11.23/11.04

AceTrader: Recommended Trades

01 Aug 2006 23:58GMT INTRA-DAY AUD/USD OUTLOOK

Although aussie has eased after o/n rally to 0. 7663, as long as 0.7620 holds, mild upside bias is seen for y'day's rise fm 0.7597 to extend marginal gain, however, as broad outlook is consolidative, 0.7678 res wud remain intact n yield retreat later. Buy dips for 0.7670 or sell there for 0.7635. Below said sup wud bring another fall to 0.7597... [more]

rate : +0.7670+ target : 0.7670 resistance : 0.7678/0.7702/0.7730 position : +Long at 0.7640+ strategy : +Target met+ support : 0.7597/0.7565/0.7519

AceTrader: Recommended Trades

01 Aug 2006 06:35GMT DAILY USD/ZAR OUTLOOK

Y'day's strg rebound fm 6.8388 signals recent fall has formed a temp. low at 6.8151 n abv 6.9535 wud extend to 6.96/97 but 7.0200 shud hold fm here. Trade fm long side, stop as indicated, below wud defer n risk weakness twd 6.8388 b4 up... [more]

rate : +6.9600+ target : 6.9600 resistance : 6.9800/7.0000/7.0200 position : Long at 6.8800 strategy : +Target met+ support : 6.9100/ 6.8388/6.8151

FOREX- Strategy of the Day

Strategy of the Day	|
Highlights Euro's Sunday, Bloody Sunday Watching Potential Dollar Swiss Short Waiting For The Last Piece
Tuesday, May 31, 2005 8:31 AM EST There was blood flowing in the Euro streets over the weekend as the French spoke loud and clear in rejection of the EU constitution. The ensuing sell-off in EUR/USD tells us that plenty of old longs, and yet to be initiated shorts, we're standing ready on the sidelines after the weekend. Referring back to Fridays S.O.T.D., we had partial positions in short EUR/USD and long USD/CHF that benefited in an large way from the US Dollar move higher. Please refer back to Fridays report for specifics. EUR/USD has sold down into deep support levels around the 1.2300-30 zone. .786 Daily Fib ret. combined with prior breakout levels of summer '04, offer some decent support, and possibly a tradable bounce, before 1.2000 trades. EUR/USD 15 minute parallel trend channel offers solid support at current levels combined with Daily .786 Fib ret. at 1.2300/20, as well as heavily diverging RSI. The remainder of Friday's short should be closed and new longs could be strapped on with a trade above 1.2340 targeting 1.2380. This is a highly contra-trend trade so please abide to stops and aggressively take profits. USD/CHF is also flashing signs of a short-term overdone US Dollar by way of Fib resistance. Please study the chart to see the derived Fibonacci resistance. 2 hour USD/CHF chart shows a similar, but inverse, parallel trend channel against the daily fib resistance that might offer a nice short opportunity if a few more pieces fall into place. I will need to leave the analysis of the final few pieces in your hands for today but I will give you the guideline. The daily Fib retracement levels are solid and will most likely offer a shortable move lower, but this is not enough to warrant a trade. I would first require RSI to negatively diverge lower as compared to price. More specifically, I would like to see USD/CHF make another push higher towards the 1.2500 level while at the same time RSI form a lower-high as compared the current level shown on the chart. This indicates that price at the higher levels lacks the momentum and range required to carry price through the 1.25 figure level. Again, a highly contra-trend trade not designed for those without the ability to abide by stops.

Another RadioBlog tutorials

The Radioblog has become a very popular online music media player. It is a flash based program embedded into a PHP page. I've received several questions about how I made my Radioblog work. It seems that the instructions that's packaged with it wasn't all too clear.

Follow the steps below and you'll soon have your radioblog working in a few minutes. But check for the following requirements first!

	You must have a webspace which allows you to run PHP! Ask your webhost about this.
	All music files that you'd like to play on your radioblog should be in MP3 format.
	You must have a copy of Radioblog. Download latest version

Step 1
	After downloading the program, unzip it and open the extracted folder.

Step 2

Make sure that the folders create.sound and radio.blog" are intact. The file Instructions.txt isn't all too important as it wasn't that helpful. Personally, I had to do a lot of figuring out when I tried to install my Radioblog for the first time using that file.

Step 3

Highlight and copy the mp3 files that you want your Radioblog to contain. Note that only MP3 files may be used. By the way, rename your files in this order: "Artist - Title of Song.mp3"

Step 4

Open your create.sound folder and paste your previously copied files into it. The create.sound folder is within your radio.blog folder.

Step 5

Now Double-click on convert_all.bat to run it and leave it to convert all your MP3 files to SWF format. It will automatically close when it's done.

Step 6

Highlight and cut the SWF files. You may now delete the MP3 files from where the SWF files have been converted from. You don't need them anymore. They'll only occupy space on your PC.

Step 7

Open your radio.blog folder and paste the SWF files into it. Note that this is the radio.blog folder within the radio.blog folder.

Step 8

Open config.ini with Notepad or a similar text editor. You may now change the colors of your Radioblog interface. You can even change the opacity of its interface by changing variable of bg_opacity". Example, bg_opacity=80.

Step 9

To make your Radioblog's layout fit with your site's layout, Open index.php". Not knowing anything about php is not a problem, since we're not editing the PHP programs. This is just like html so go edit it as much as you like the way you edit html. Just remember not to edit anything within the tags.

Step 10

Now upload your radio.blog folder and all its content into your webspace. This is the radio.blog folder within the main radio.blog folder, ok? Open internet explorer and point your browser to the exact url of index.php. If you saved the radio.blog folder along with your primary public files, it may look like http://www.domainname.com/radio.blog/index.php.

You can keep adding more songs to your Radioblog by converting your MP3 files to SWF format and uploading them. You can change the look of your Radioblog interface by editing index.php and config.ini and reuploading them (overwriting the previous ones). You can also load your Radioblog into an IFRAME!