U.S. Economy: Housing & Unemployment - Weekly Report 19–23/05/2014

Starting with Monday the 19th May. The first key trading event of the week is the German Buba Monthly Report. This is of interest to traders who will be watching for any news on inflationary measures. Recent comments from Buba are seen as a show of faith in combating low inflation but whether they decide to automatically support an ECB interest cut * even if the inflation forecasts for 2016 are revised down * remains to be seen.

On Tuesday, we move to the UK for CPI data at 8 am. Consumer price inflation dropped to 1.6 percent in March, the lowest level since October 2009 which is below the Bank of England’s two percent target. This will either prompt a lowering of CPI projections for April or they could hold steady, taking some pressure off the Bank to act. Banc De Binary analysts advise traders to watch for possible trading opportunities on GBP pairs.

On Wednesday, we cross to the U.S. for the release of the minutes of last month’s FOMC meeting. The tone of the last FOMC meeting was perceived to be dovish with Fed Chair Janet Yellen stating that interest rates were unlikely to rise unless recovery gained strength. Binary options traders will be alerted to the minutes of this meeting which will provide them with vital information regarding future monetary policy by the U.S. Central Bank, which of course, is an important driver of the Euro/dollar.

We move to Thursday where we stay in the U.S. for the latest Unemployment Claims data. Last week’s figures provided evidence that fewer Americans filed applications for unemployment benefits as jobless claims fell to 297,000, reaching the lowest level in 7 years. A further decrease in jobless claims could be on the cards which is likely to apply downward pressure on the Eurodollar.

Which brings us on to Friday’s New Home Sales data. The unexpected hiccup in the housing market reflected in the recent below-par home sales data is one of the biggest threats to the U.S. economy. The downturn may be seen to have changed in April, as analysts predict that building work started on more new homes. So, with new home sales forecast to increase to 430,000, that’s good news for the U.S. economy and the dollar. If Friday’s figures beat forecasts, Banc De Binary analysts will be looking at PUT options on the Eurodollar.