Economic Calendar for week 27th - 31th August 2007

All times GMT

Monday Aug 27th:

UK - ALL DAY - Bank Holiday .
EU - 14:00 - ECB President Trichet Speaks
USD - 15:00 - Existing Home Sales

Tuesday August 28th:

EU - 09:00 - German Ifo Business Climate Index .
EU - 09:00 - German Ifo Business Expectations Index
EU - 09:00 - M3 Money Supply y/y
UK - 09:30 - BBA Mortgage Approvals
US - 15:00 - Consumer Confidence
US - 15:00 - Richmond Fed Index
EU - Tentative - German CPI M/M (p)
US - 19:00 - FOMC Meeting Minutes

Wednesday August 29th:

EU - 07:00 - German Consumer Confidence
US - 15:30 - Crude Oil Inventories

Thursday August 30th:

UK - 07:00am - Nationwide House Prices M/M
EU - 08:55 - German Unemployment Rate
EU - 09:00 - Italian Retail Sales M/M
UK - 09:30 - Mortgage Approvals
UK - 09:30 - Net Lending to Individuals M/M
UK - 11:00 - CBI Distributive Trades Realized
US - 13:30 - GDP Annualized q/q (r)
US - 13:30 - GDP Deflator Annualized q/q (r)
US - 13:30 - Unemployment Claims
US - 15:00 - House Price Index q/q

Friday August 31st:

EU - 07:00 - German Retail Sales M/M
EU - 10:00 - CPI y/y (p)
EU - 10:00 - Unemployment Rate
EU - 10:00 - Italian CPI m/m
EU - 10:00 - Consumer Confidence
UK - 10:30 - Consumer Confidence
US - 13:30 - Core PCE Price Index M/M
US - 13:30 - Personal Spending M/M
US - 13:30 - Personal Income M/M
US - 14:45- Chicago PMI
US - 15:00 - Factory Orders M/M
US - 15:00 - Consumer Sentiment (r)
US - 15:00 - Fed Chairman Bernanke Speaks


EU - Europe wide
FR - France
UK - United Kingdom
US - United States
GE - Germany

The week ahead.

Let The Bailouts Begin

The mortgage industry finally received some reprieve last week when the Bank of America invested 2 billion dollars into the ailing mortgage lender Countrywide Financial.

Although this caused some upbeat momentum, it was short lived, as credit worries still continue to plague the market. On August 17th the Fed Bank cut its lending rate by .50bp, which resulted in the market jumping 230 points on the Dow Jones.

The stock market had some follow through this week, closing up or flat, for the first three days. However it seems like the moment there is any hint of credit crunch; the market gives back all gains. There is major speculation that unless the FOMC doesn't cut rates, then as soon as the next major set of bad news comes around, the market will potentially give back everything they gained from the fed cut and then some

Next week we are going to get a sneak peak into the consumer's financial health. With consumer spending data being released, The Consumer Confidence report is on Tuesday and Personal Spending and Personal Income on Friday.

Both reports could possibly be market moving, as the market has been focusing its spotlight of attention on the credit of consumers. Also on Monday there is existing home sales figures, which with the credit market drying up, would probably be down. With little possibility of good news the outlook for the near future seems to be Bearish-Neutral.

A no touch play on the SP500 to the upside with 100 pts from the spot with a 20 day duration returns an 11% ROI.


Arthur Smelyansky

Economic Calendar for 24th Aug 2007

All times now GMT NOT BST

Friday Aug 24th:

EU - 08:00 - Manufacturting PMI.
EU - 08:00 - Services PMI.
UK - 08:30 - GDP Q/Q.
UK - 08:30 - Index of Services Q/Q.
US - 12:30 - Durable & Core Durable Goods Orders M/M.
US - 14:00 - New Home Sales.

EU - Europe wide
FR - France
UK - United Kingdom
US - United States
GE - Germany

The week ahead.

Black Thursday

Black Thursday they are already calling it. The biggest fall on the FTSE in four years, 60 Billion wiped off the value of the stock market etc etc.

Black Thursday wont be finding its way into the history books like other previous crashes because it was more Freaky Thursday than Black. The FTSE fell severely as did the US markets in the morning session. In the afternoon however the Dow staged a remarkable come back, rallying over 300 points from the lows to close virtually flat for the day.

The reasons behind the panic have been widely reported, but Thursdays movement in particular was down to one thing the potential unwinding of the Yen carry trade. The carry trade involves borrowing in a low interest currency (The Yen) and investing in a high interest currency like Sterling. This is a great way of generating returns until either the Japanese government raise interest rates or the currency exchange rate changes.

Currencies that have been the main beneficiaries of carry trade investments have been the ones with the highest interest rates. As the carry trade looks to unwind it is these currencies that are hit the hardest, often in proportion with the size of their interest rates. The Euro, Sterling and dollar all fell against the Yen on Thursday, but the worst hit were two countries with the Wests highest interest rates. With rates in the region of 8% Australia and New Zealand have been prime carry trade beneficiaries and consequently their currencies have dropped spectacularly against the Yen. The New Zealand Dollar fell 17% from its recent peak against the Yen at one stage.

On Friday morning the Japanese market looked as though it was going to drag the market back down again, until the US Federal reserve came to the rescue. The Fed cut the discount rate which is the rate at which investors borrow from the Fed. This was 100bp above their base rate, but while keeping the base rate steady they have cut the penalty rate from 100 bp to 50 bp. This has been seen by some commentators as their last attempt to hold the market in. If this doesnt work there is a possibility of them cutting rates next week. If this happens, be prepared to for the market to shoot back up again.

Aside from the possible surprise rate cut, next week is a seasonably light week in terms of economic announcements. Friday is the heaviest day with GDP data from the UK and durable goods orders in the US. Most interesting will be the US new home sales data, we know that the US housing market is in dire straights, but exactly how bad it is might have a real impact on the markets.

Next week the market could trade day by day on the news flow. A shock profits warning or hedge fund announcement could see further falls, while the absence of any further bad news could cause a sharp snap back.

Further falls and a snap rally are both equally possible, but there is more of a downside risk potential. The main unknown to the upside is an emergency rate cut, but this may not happen now that the market reacted well (at the time of writing) to the Feds penalty rate cut. The unknowns to the downside dont bear thinking about. The way this sub prime debt has been parcelled up means that it is very difficult to know just who is exposed to what.

If you are willing to trade in these challenging conditions a No Touch 100 points higher than the S&P spot price yields 15% over 20 days.

Dave Evans

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