Economic Calendar for week 24th - 28th Sept 2007

All times now GMT NOT BST.

Monday Sept 24th:

UK - 08:30 - Public Sector Net Borrowing.
EU - 09:00 - Industrial New Orders M/M..

Tuesday Sept 25th:

FR - 06:45 - Consumer Spending M/M.
EU - 08:00 - IFO Business Climate Index.
EU - 08:00 - IFO Business Expectations Index.
UK - 08:30 - Business Investment Q/Q.
US - 13:00 - National Home Price Index.
US - 14:00 - Existing Home Sales.
US - 14:00 - Consumer Confidence.
US - 14:00 - Richmond Fed Index.

Wednesday Sept 26th:

GE - 06:00 - Consumer Confidence.
UK - 08:30 - GDP Q/Q.
UK - 08:30 - Current Account.
US - 12:30 - Durable & Core Durable Goods Orders.

Thursday Sept 27th:

GE - 07:55 - Unemployment Rate.
EU - 08:00 - M3 Money Supply Y/Y.
UK - 10:00 - CBI Distributive Trades Realized.
US - 12:30 - GDP Annualised & GDP Deflator Annualised Q/Q.
US - 12:30 - Unemployment Claims.
US - 14:00 - New Home Sales.

Friday Sept 28th:

UK - 09:30 - Consumer Confidence.
US - 12:30 - Core PCE Price Index M/M.
US - 12:30 - Personal Spending M/M.
US - 13:45 - Chicago PMI.
US - 14:00 - Consumer Sentiment.
US - 14:00 - Construction Spending M/M.

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

The week ahead.

Many traders will be breathing a heavy sigh of relief this week as the economic calendar lightens comparatively. The US interest rate decision weighed heavily on trading action last week. The FOMC announcement had top billing and it certainly didnt disappoint. Many analysts were expecting a 25 base point cut, with much speculation on when the next cut would be. The 50 base point cut took many by surprise and the market reacted with typical enthusiasm.

Bernake and Co became the heroes of the hour on Wall Street, with them seemingly averting the credit crunch and saving the day. The Dow Jones rose 2.5% on Tuesday, and the following day, the Nasdaq 100 came within 4 points of its July peak. Crisis, what crisis? In fact some commentators are now labeling the latest concerns a faux credit crunch.

The decision has sparked some strong movement in the currency market with the Dollar falling hard against the Euro. The Euro remained strong across the board with the ECB maintaining their tightening bias. The Loonie, as the US Dollar/ Canadian Dollar exchange rate is called, fell hard due in part to the rise in oil prices. The USD and CAD are now standing at parity (1USD = 1 CAD), the lowest levels for well over 30 years.

Over in the UK, the queues outside Northern rock disappeared as the Government and Bank of England intervened with various measures and reassurances, aimed to calm jittery investors and savers.

Next week is a relatively lighter week on the economic news front. Notable announcements are the US existing home sales on Wednesday, and new home sales on Thursday. With the US housing market being at the forefront of the current situation, this data could bring fresh perspective on the intermediate future. Although it is too soon for the recent rate cut to have any impact, Wednesdays core durable goods orders and Fridays PCE price index will give clues as to the implications of the 50 base point cut.

Opinions on the Feds rate cut have been mixed, with Wall Street enjoying the move and some economists questioning its wisdom. As the impact of the announcement settles down, some are questioning what the Fed knows, that the rest of us dont. What was it that spooked the Fed into a half point cut? The implications are that the large cut was made because of the state of the economy, particularly the housing market and job growth.

Last Friday saw options expiration day, and according to research from www.sentimentrader.com, since 1990, the week following options expiration in September has shown a positive return on the S&P 500 just 2 out of the last 17 times. Taking out the week following 9/11, the average return for the week is -1.3% with the maximum gain being +0.6. One must always take such seasonality studies with a pinch of salt, but coupled with the dramatic rise we saw on one day last week, it could lend credence to the argument that were short term over bought on the US markets.

A no touch trade, 90 points higher on the S&P, returns around 7% over 14 days. This means that as long as the market rallies slowly, stays still, or drops, you win.

You may also wish to have a look at BetOnMarkets.coms new Double Contra which pays out if the market never touches the two barriers you set above and below the current price. If it touches just one or neither of these you win. If volatility reduces during the relatively news light week, it could be an interesting play, particularly if you weight it to the downside.

Dave Evans

Economic Calendar for week 17th - 21st Sept 2007

All times now GMT NOT BST.

Monday Sept 17th:
EU - 09:00 - Trade Balance.
US - 12:30 - Empire State Business Conditions Index.

Tuesday Sept 18th:
UK - 08:30 - CPI & Core CPI Y/Y.
UK - 08:30 - RPI Y/Y.
GE - 09:00 - ZEW Economic Sentiment.
EU - 09:00 - ZEW Economic Sentiment.
US - 12:30 - PPI & Core PPI M/M.
US - 13:00 - TIC Net Long-Term.
US - 17:00 - NAHB Housing Market Index.
US - 18:15 - Interest Rate Statement.

Wednesday Sept 19th:
EU - 06:00 - PPI M/M.
UK - 08:30 - MPC Meeting Minutes.
US - 12:30 - CPI & Core CPI M/M.
US - 12:30 - Housing Starts.
US - 12:30 - Building Permits.
US - 14:30 - Crude Oil Inventories.

Thursday Sept 20th:
UK - 08:30 - Retail Sales M/M.
UK - 08:30 - Public Sector Net Borrowing.
UK - 08:30 - M4 Money Supply M/M.
UK - 08:30 - BSA Mortgage Approvals.
US - 12:30 - Unemployment Claims.
US - 14:00 - Leading Index.
US - Tentative - Fed Chairman Bernake Speaks.
US - 16:00 - Philadelphia Fed Manufacturing Index.

Friday Sept 21st:
EU - 08:00 - Current account.

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

The week ahead.

Last week the credit crunch continued to dominate headlines with banks and housing stocks being hit the hardest. The Bank of Englands Governor King alluded to the situation being akin to a run on the banks. Specifically he was referring to the situation whereby major banks are withholding funding in the asset backed commercial paper market. LIBOR, the rate at which banks are willing to lend to each other rose to a nine year peak last week. The three month lending rate at one point rose to more than 100 base points above the Bank of Englands target rate.

The bank of England eased the situation somewhat by relaxing restrictions on the amount of money financial institutions need to hold with the central bank, encouraging them to lend more to each other. Libor dropped for the third straight day on Friday, but overnight on Thursday there was a severe reminder of just why banks were being so wary in lending to each other. Northern Rocks fresh profit warning and surprise move to tap the BoE for emergency funding spooked investors further.

Governor King predicted that banks would move to the more traditional model of funding lending through deposits. As a reflection of this, some banks have increased the interest offered in their deposit accounts, but at the same time have increased the rates charged to mortgage borrowers.

The BoE hinted that if the situation worsens it may act with an interest rate cut. Until then, with borrowers being hit with a de facto rate hike, it may not be long before the credit crisis expands to the wider economy. We will know more about this next week with the minutes from the last MPC meeting being released on Wednesday and retail sales data on Thursday.

Tuesday 18th of September 18.15 GMT sees one of the most important FOMC interest rate statements in recent history. It is likely that markets will grind to a halt coming into the decision and then unwind like a coiled spring on the announcement. The US Federal reserve has come under intensive pressure from Wall Street to cut rates to ease the credit crisis.

Yet it is not an easy decision to make, the US housing market has been in severe decline for a while and householders at the thick end of the sub prime crisis will no doubt be grateful for a rate cut. On the other hand inflationary pressures do remain. Oil continues to surge to record highs and commodities such as wheat have risen spectacularly in recent months. The latter even prompted a pasta protest in Italy, with Italians calling for the government to do something about the spiraling cost of the national dish. Wednesdays US housing starts data and Bernakes speech on Thursday will both influence an excited market post rate decision.

Predicting the market in the short term is near impossible as so much depends on the US rate decision and accompanying statement next week. The quarter point cut is the more likely option for the moment, but even if this is how it pans out, the potential for another cut at future meetings will be equally market moving. If you were willing to trade in the face of so much uncertainty, a volatility play may be the better option with markets expected to move considerably on Tuesdays announcement in the US. A 14 day up or down trade trades returns around 10% on the S&P 500 with the triggers set as 1420 and 1525. If the market touches either of these levels within the next 14 days you win.

Dave Evans

Economic Calendar for week 10th - 14th Sept 2007

All times now GMT NOT BST.

Monday Sept 10th:

FR - 07:55 - Industrial Production M/M.
UK - 08:30 - PPI Input & PPI Output M/M.
US - 19:00 - Consumer Credit M/M.

Tuesday Sept 11th:

UK - 08:30 - Trade Balance.
EU - Tentative - ECB President Trichet Speaks.
US - 12:30 - Trade Balance.
UK - 14:30 - Leading Index M/M.

Wednesday Sept 12th:

UK - 08:30 - Average Earnings Index +Bonus Q/Y.
UK - 08:30 - Claimant Count Change.
UK - 08:30 - Unemployment Rate.
EU - 09:00 - Labor Cost Index Q/Q.
EU - 09:00 - Industrial Production M/M.
US - 14:30 - Crude Oil Inventories.
UK - 23:01 - RICS House Price Balance.

Thursday Sept 13th:

EU - 06:45 - Nonfarm Employment Q/Q.
EU - 06:45 - French CPI M/M.
UK - 08:30 - Retail Sales M/M.
US - 12:30 - Unemployment Claims.

Friday Sept 14th:

EU - 06:00 - German CPI M/M.
US - 12:30 - Retail Sales M/M.
US - 12:30 - Core Retail Sales M/M.
US - 12:30 - Current Account.
US - 12:30 - Import Price Index M/M.
UK - 13:15 - Industrial Production M/M.
US - 13:15 - Capacity Utilization Rate.
US - 14:00 - Consumer Sentiment.
US - 14:00 - Business Inventories M/M.

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

The week ahead.

Interest rate statements dominated the headlines last week. Statement was the operative word because the Bank of England surprised many by offering a statement with a no change announcement. It is very rare for the BOE to offer a statement without a change in rates, and the last few times they have done this, rates were cut the following month. This is perhaps unlikely to happen this time, but coupled with the billion pound cash injection last week, at least it seems the Old Lady of Threadneedle is softening her non-interventionist stance.

As expected the ECB kept rates on hold, while keeping their tightening bias. The FOMC meeting next week continues to rise in importance, with the Fed sending out further mixed messages on its intentions. Many are pricing in a quarter point rate cut, but it is what the bank says in their statement, and the markets reaction that could be crucial. Assuming there is a cut, the question on everyones lips is; could there be more cuts to follow, or will this be the only one?

Many voting Fed members went on record last week with hawkish comments. Hoenig said that there is a lack of strong evidence that the financial-market turmoil has infected the economy. Poole said that the Fed officials cannot be slaves to market expectation and that we shouldnt take for granted that the economy is going into nosedive. Anyone relying on a substantial Fed bailout may wish to think again. Fridays weak NFP threw a curveball at the Fed who now have an extremely hard few months ahead of them. Elsewhere oil prices rose to nearly $80 per barrel, on news of potential conflict in the Middle East, and inventories falling sharply.

Notable economic announcements next week are the US trade balance and industrial production figures. These will provide recent data on the strength of the US economy. Well also gain an insight into how well consumers are bearing up in the face of this financial instability, with retail figures from the US and the UK. News that mortgages are set to rise, despite headline rates remaining the same in the UK, may not have time to trickle into these figures.

As we saw on Friday, risks still remain to the downside. The inter bank lending rate has shot up, causing many to question just what they know about each others exposure in the debt market. Therefore a no touch with a 17 day term, 95 points above the S&P 500 spot price, could return value at 8% ROI.

Dave Evans

Economic Calendar for week 3rd - 7th Sept 2007

All times now GMT NOT BST.

PLEASE NOTE - People in the UK should add one hour to these times while in daylight saving.

Monday Sept 3rd:

US - ALL - Holiday: Labor Day.
GE - 07:55 - Manufacturing PMI.
EU - 08:00 - Manufacturing PMI.
UK - 08:30 - Manufacturing PMI.
US - 23:01 - BRC Retail Sales Monitor Y/Y.

Tuesday Sept 4th:

UK - 08:30 - Construction PMI.
EU - 09:00 - PPI M/M.
EU - 09:00 - Retail Sales M/M.
EU - 09:00 - GDP Q/Q.
US - 14:00 - ISM Manufacturing Index & ISM Manufacturing Prices.
US - 14:00 - Construction Spending M/M.
UK - 23:01 - Consumer Confidence Index.

Wednesday Sept 5th:

GE - 07:55 - Services PMI.
EU - 08:00 - Services PMI.
UK - 08:30 - Services PMI.
UK - 09:30 - BRC Shop Price Index Y/Y.
US - 14:30 - Pending Home Sales M/M.
US - 18:00 - Beige Book.

Thursday Sept 6th:

UK - 08:30 - Industrial Production M/M.
UK - 08:30 - Manufacturing Production M/M.
GE - 10:00 - Factory Orders M/M.
UK - 11:00 - Interest Rate Statement.
EU - 11:45 - Interest Rate Announcement.
US - 12:30 - Nonfarm Productivity Q/Q.
US - 12:30 - Unit Labor Costs Q/Q.
US - 12:30 - Unemployment Claims.
EU - 12:30 - ECB President Trichet Speaks.
US - 14:00 - ISM Non-Manufacturing Index.
US - 14:00 - ISM Non-Manufacturing Prices.
UK - 23:01 - NIESR GDP Estimate.

Friday Sept 7th:

US - 12:30 - Nonfarm Employment Change.
US - 12:30 - Unemployment Rate.
US - 12:30 - Average Hourly Earnings M/M.
UK - 14:00 - Wholesale Inventories M/M.

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

The week ahead.

Yet another interesting week and indeed month on the stock market is behind us. Markets continue to crash on bad news and then rally the next day on good news.

The bad news?

Well theres plenty of that. Barclays bank in the UK was forced to tap the Bank of Englands emergency lending facility at 1% above the base rate to the tune of £1.6bn. This has been explained as being due to a technical failure, but coupled with resignation of the chief of BarCap many people are questioning the financial stability of major financial institutions. Barclays put their losses due to investments in debt vehicles at just £75 million, but many in the city are skeptical that this is all there is. The complicated nature of these debt vehicles means that it is difficult to know exactly how much exposure there is.

The Case-Shiller housing numbers pointed to a severe down turn in the US housing market. The US housing market is usually regional with different areas experiencing booms and busts at different times. This is the first time in a while that all 10 cities measured were found to be in decline.

The good news?

The market rallied last week in part due to a letter from Fed Chairman Bernake to Senator Chuck Schumer. The part that got investors excited is as follows:

"FOMC has stated that it is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets."

It is worth noting however that while these comments may be reassuring, there is no concrete confirmation that the Fed will act by cutting rates. Bernakes later statement on Friday kept the same open line, but inferred that a rate cut was at least possible.

The second piece of good news was the Wall Street Journal announcement that George Bush said that the US government will be outlining initiatives and reforms to help subprime mortgage homeowners. On closer reading however the deal may not be as wide ranging as many people interpreted it to be. As ever, more information and interpretation will come out in the wash.

NFP data will headline next week, but jobless claims will also be a heavy announcement particularly as the FOMC inferred it will be paying close attention to very recent data. Aside from a surprise rate cut from the US, the main action next week will come from European interest rates with both the MPC and ECB making rate announcements. The MPC are a racing certainty to announce no change, but the ECB could still surprise. They too are expected to keep rates on hold, but there is still a chance that they might upset Sarkozy with a rate hike.

Most traders who were away on vacation and those who sold in May (as the old adage goes) were coming back as it was coming up to labor-day last week. This infusion of more cash can create two situations:

1) It could prop up the market as there will be more buyers, who didnt suffer the losses of the month of August.
2) More sellers as rather than going long, they will short the market and increase the market fall.

This could present the markets with a further injection of volatility which could be profitable for the short term trader. For that you might want to use an up and down play on the sp500 over 11 days, and 45 points each way, which returns around 12%ROI. Alternatively you could make a no rate cut play and place a no touch above the previous highs on the S&P500 due to expire before the next FOMC interest announcement on the 16th.

Dave Evans