U.K. property prices posted a record one-month drop in prices in May to push home the fact that the bubble has burst and the drop in prices appears to be gathering pace. The credit crunch and the weakening economy were slated as the guilty parties as householders see inflation eating into their monthly budgets.
It will pose a question for the BOE in terms of whether to slash rates like the Fed or to retain a stiff upper lip and vote for the test book stable price affirmation with inflation expected to top 3.0%.
The following economic releases are due today:
Q1
U.S. GDP Annualized (QoQ) 0.9% U.S. Personal Consumption (QoQ) 1.0%
Stats out so far today have been repeats of the same old stuff. Australians reduced private capital spending in Q1 while the Japanese consumer is conspicuously absent from retailers as more budget is having to be directed towards fuel and food.
Following yesterday's weaker European releases versus the mildly stronger from the States Asia has followed through with modest Dollar buying as the market continues to react to each figure coming out. Clearly the sentiment is confused and this is clear from statements that identify reasons to sell the Dollar one day and buy the next.
Today's release calendar is a typically busy month-end barrage of European data that could well provide more decisive direction should the data be mostly weak. We see the Bloomberg retail PMI numbers followed by a big glob of confidence numbers from the Euro-zone and this does seem to carry risks of Euro weakness.
Much of the correction higher in the Euro has been based on the threat of higher interest rates from the ECB. A more consistent show of weak confidence running from the consumer through to business, economic and industrial confidence would place a big question mark over the ECB's resolve in the face of a weakening economy.
Perhaps it will begin to encourage them to understand that price stability also requires a confident consumer.
Disclaimer: All information on this web site is subject to change. The use of this web site constitutes acceptance
of our user agreement. All publisher financial articles at
FXtree.com are those of the individual authors and do not represent trading recommendations
of FXtree.com or its staff.
