Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

FR Business Climate, UK jobs, US House Starts

By Saxo BankMarket OverviewFeb 20, 2013 04:54AM ET,-uk-jobs,-us-house-starts-156019
FR Business Climate, UK jobs, US House Starts
By Saxo Bank   |  Feb 20, 2013 04:54AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
A busy day of news and data ahead, including the release of minutes from the BoE and the Federal Reserve’s FOMC. Germany also updates consumer price inflation today. I’ll be keeping a close eye on three other numbers as well: the business climate indicator for France, the UK labour market report and US housing starts for January.

France Business Climate Indicator (07:45 GMT)
Macro confidence for Germany increased substantially this month, according to yesterday’s release of the ZEW Indicator of Economic Sentiment. The upbeat news softens some of last week’s worse-than-expected decline in fourth-quarter GDP for Germany and Europe. Optimists say that this year’s first quarter will deliver better news. There have been some encouraging numbers in recent weeks, including the latest ZEW update. But is there any reason to think that macro conditions for Europe overall are stabilizing in Q1? Today’s release of the business climate indicator (BCI) for France may offer a clue.

France continues to face a range of economic challenges, but the immediate question is whether the overall trend for the eurozone’s second-largest economy is worsening. Much depends on the choice of indicators. But no matter the answer, the front line for looking ahead includes surveys of business leaders from various sectors, such as France’s BCI. In the January update, this index stabilized at 87. That is well below its long term average of 100, but it is also roughly unchanged from the previous month. Analysts don’t see much more than a marginal increase in today’s number. That, at least, will keep hope alive that France’s economy may be able to tread water for the near term. If so, improving economic conditions in Germany in the months ahead will resonate a bit deeper in the cause of seeing the macro glass as half full in Europe for 2013.
France Busunss Clinate
France Busunss Clinate

UK Labour Market Report (09:30 GMT)
The British pound has lost ground against the euro in recent months, but some analysts think that the EUR/GBP rally has run out of steam. That’s certainly the case based on trading activity so far in February, with the EUR/GBP pair fluctuating within a relatively narrow range of roughly 84.5 to 87.0. If the case for a stronger pound relies on bullish news from Britain, today’s update on the labor market may help launch an attitude adjustment.

One number to watch is the claimant count, which has been trending down in recent months. The number of people claiming unemployment benefits dropped to its lowest level in over a year in December. The British economy still faces a number of substantial headwinds, but a falling number of workers filing for jobless benefits is an encouraging sign for the near-term outlook. The consensus forecast sees another dip in today’s release for January, albeit a modest one. If the number ends up as a bigger-than-expected fall, however, the forex market may be inclined to reassess the prospects for the British economy in the year ahead relative to the eurozone.
UK Labor Market
UK Labor Market

US Housing Starts (13:30 GMT)
Home building had a good run last year. But the positive momentum is expected to take a break in today’s January update. The market is looking for a roughly 4 percent rise in new starts last month versus December’s torrid 12 percent gain. My econometric modeling suggests a smaller loss, but everyone’s generally in agreement: today’s report will deliver red ink.

December’s rate of growth is unsustainable, of course, but a setback will still make the bulls nervous. Housing, after all, has been a critical source of support for the economy over the past year and any sign that the rebound is faltering isn’t easily ignored in an otherwise slow-growing economic climate. But one month a trend does not make. Housing starts are volatile in the short run, and so it will take time to decide if the housing revival has run into a new snag, or not.

Keep your eye on how the actual figure compares with the forecasts, which may tell us something about the trend. In addition, watch the spread between starts and newly issued building permits. The two ultimately track one another closely. The fact that starts got ahead of permits last month suggests that a pullback is due for January.
US Housing
US Housing
FR Business Climate, UK jobs, US House Starts

Related Articles

Marc Chandler
How Long Is Transitory? By Marc Chandler - Jun 20, 2021 11

The Bank of England meeting on June 24th finishes this round of major central bank meetings. At its last meeting, Bailey & Co reduced the weekly bond-buying. The extension of...

Ashraf Laidi
Reflation Goes Off The Rails By Ashraf Laidi - Jun 20, 2021 1

The dominant theme in trading in 2021 was reflation, but that rested on the Fed letting prices run hot. On Wednesday, that was upended and so were bets on inflation in a sharp move...

FR Business Climate, UK jobs, US House Starts

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email