Brief review of the market. by OpenForex.com

Brief review of the market.

17:45 06/17/2004

Brief review of the market. Yesterday, American currency recovered after decline caused by FRS chairman\'s comments upon inflation in the U.S. Rise of futures on American stock exchange indexes supports the rate of the dollar. The dollar was also supported by economic data on the U.S. and the rise of American dollar against Canadian one. In its turn, data on inflation in Europe (12) contributed to weakening of the Euro. The fact that compared to April, CPI, excluding energy, remained stable in May in Europe (12) lowered expectations of possible rate hike in European region. Thus, EUR-USD dropped more than 180 points down in two-day time. In Europe (12), CPI for May made up +0.3% per month, +2.5% per year, forecasted +2.5% per year. Previous value of the given index equaled +0.4% per month +0.2% per year. In Europe (12), CPI, excluding energy, did not change in May and remained +2.1% per year. In Eurozone, average hourly earnings rose 2.3% in the first quarter compared to previous year’s level. In the fourth quarter, rise of work force cost made up 2.2% (specified data). In the EU in a whole (including 25 countries since May 25), the tempo of earnings’ rise speeded up to 3.4% in the first quarter from 2.8% in the fourth quarter. The lowest rates of growth were recorded in Austria (0.2%), Portugal (0.5%) and Germany (1.5%), whereas the fastest were Latvia (11.4%0, Slovakia (8.1%) and Britain (6.7%). In Britain, unemployment rate made up 4.8% in February-April, not having changed compared to previous three-month period. The given data was rendered by National Statistical Services. Number of employed increased on 30 000 people to 28.3 million people. Number of unemployed decreased on 9 000 people to 1.43 million people. Jobless claims dropped 12 000 to 874 000 claims in May compared to the previous month. Compared to previous year, average earnings rose 4.3% in February-April against 5.2% in January-March. FRS said industrial production rose 1.1% in May in the U.S. compared to April. Economists had looked for 0,8% gain. May growth of production was the highest since 1998, when it equaled 2,0%. Coefficient of industrial capacity rose 77.8% in May against forecasted 77.5% and the previous value of 77.1%. According to economic review of Federal Reserve System of the U.S., “Beige book”, steady growth of economic activity was recorded in April and May in the U.S., as well as improvements in the sphere of employment, while price rise in the majority of regions was insignificant. “Consumer price rise was mainly insignificant but producer prices for energy, construction materials and steel rose in the majority of regions”. Employment also rose. On Wednesday, the U.S. Department of Trade reported that the number of one-family houses and apartments, construction of which started in May, was lower than that in April. Compared to April, housing construction in the U.S. dropped 0.7% to 1,967 million units in annual estimation. Economists had looked for 1,95 million units. April indicator was revised from 1,969 million to 1,981 million units in annual estimation. In May, housing construction dropped for the fourth time in five months but May indicator of new homes – 1,640 million units annual rate – was the highest since December. Number of issued construction permits, indicator of future activity, rose 3,5% in May to 2,077 million units annual rate. Construction permits for one-family houses reached 1,590 million units annual rate – the highest in the whole history of recording.

The forecast was created by trans1.