Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

The Week Ahead for the USD and US Markets

The USD started the past week strongly, making good headway against most of its counterparts. However it dropped sharply on Thursday, from 83.3 to 82.6 according to US Dollar Index. The depreciation was mainly caused by Bernanke’s comments and a slew of European data showing signs of a recovery.

The stock market ended the week strong S&P 500 and Dow Jones Indexes rose 3.2% and 3.5% respectively. The star of the week was the NASDAQ Composite making a steep incline up 4.2%.

The increases are attributable to better better-than-expected second quarter earnings reports and better than expected European data.

In comparison with the several bullish data releases reported in Euro Zone, recent US releases haven’t been quite as bullish for the USD and this trend is expected to continue next week. The week ahead will prove to be busy, especially on Friday. The GDP, Consumer Confidence and other important indicators will be released. Any each of them can have a significant impact on the US stock and currency markets.


Monday, 26 July


Today the New Home Sales is going to release following last week’s Existing Home Sales data. The New Home Sales peaked= at 504K in April. However, the figure for May decreased dramatically to only 300K, whose forecast was 446K. Now the expectation for June is adjusted to a lower level at 317K. Taking last week’s Existing Home Sales data (0.19M more than forecast) into account, the New Home Sales is likely to rise.

Tuesday, 27 July


At 10:00 am, the Conference Board Inc. will report its Consumer Confidence for July. This is an important report and a leading indicator of consumer spending (a major driver for overall economic activity). The forecast for this month has already been modified downwards to 51.5.


Wednesday, 28 July


The Census Bureau will release the Core Durable Goods Orders at 8:30 am. This release measures the total value of new purchase orders placed with manufacturers for durable goods. Expectations are for the release to come in at 0.6%

Thursday, 29 July

Jobless Claims is released by the Department of Labor on Thursday. The impact of this indicator fluctuates from week to week, with recent stress test results and other good data from the Euro zone traders will be paying attention and looking for some kind of confirmation from the jobs market.

Friday, 30 July

At 8:30 am GDP figures for the 2nd quarter will be released, GDP measures annualized change in the inflation-adjusted value of all goods and services produced by the economy and offers a broad measure of economic health. This is the earliest release for the 2ndquarter and thus tends to have the most impact on the markets. GDP growth for the 1stquarter’s third estimate was 2.7% in an annual basis, after being revised down from the previous estimate 3.0% and the initial estimate of 3.2%, which means an increase in imports and decrease in exports. Investors will judge the markets based on these data. At the same time, GDP price index, which can measure the level of inflation, grew annualized 1.1% from the previous estimate.

At 9.55 am Consumer Sentiment for July 2010 will be announced, Consumer sentiment reflects the consumer attitudes to the economy. It is directly related to the consumer spending power. The consumer sentiment index released in the mid-July plunged, down to 66.5.

Key words for the week: New Home Sales, Consumer Confidence, Durable Goods Orders, Petroleum Status Report, Jobless Claims, GDP, Employment Cost Index, Consumer Sentiment

Disclosure: no positions