FUNDAMENTAL REVIEW 03.10.12

 

It seems that Australian dollar will continue its free fall

 

After the fateful decision of RBA to lower the benchmark interest rate by 0.25% points to the level of 3.5% of the Australian currency continued its decline against their counterparts to four-week low. 

This decline is primarily due to the probability of a further decline in interest rates and the change in the economic situation in China, to which Australia is in a close trade relations.

Further weakening of the Chinese economy may lead to a cycle of interest rate cuts RBA.

 

Activity in the services sector in Australia in September, continued to shrink. According to the index of business activity in the services of the Australian Industry Group / Commonwealth Bank index fell by 0.5 points to 41.9 points. Value below 50 indicates a drop in activity.

The continuing stagnation in the economy, it seems, will continue to put pressure on the national currency and, possibly, can be expected to decline in the short term to the minimum values of the beginning of September.

The single currency is consolidating amid the ongoing "struggle" of the Spanish authorities to the pressure that is on them has a market, the rating agencies and the ECB, together with the European Stability Fund, forcing the resort to financial aid.

 

Hard savings plan is good in Spain and even too good, but the markets have doubts on this point, which results in ongoing since the middle of last week, the pair Eurodollar consolidation.

 

Today we should pay attention to the statistics on employment of ADP from the U.S. and the index of business activity in the non-manufacturing sector of the ISM. Good short-term statistics will pressure the U.S. dollar.

 

Statistics today:

Moscow time

12.00 Eurozone Final data on the index of business activity in the service sector in September n / a; 46,0; 46,0

12.30 UK index of business activity in the service in September n / a; 53,1; 53,7

12.30 Change of UK mortgages are not used for the purchase or repair of houses Q2. 2012 n / a; -8,6 billion pounds -8.8 billion pounds

13.00 Eurozone retail sales in August n / a; 0,0% m / m, -0.2% m / m

16:15 U.S. Change the number of employees (excluding agriculture), according to ADP September n / a; 148.000; 201.000

18.00 U.S. index of business activity in the ISM non-manufacturing sector in September n / a; 53,4; 53,7

18:30 U.S. Change oil 24.09-30.09 n / a; n / a; -2,4 million barrels.