Rational FX: RICS house price comes in at 7 points higher than expected [08/02/2011]

Yesterday’s Market Movers

• There was no data out for the UK yesterday
• In the Euro-Zone the Sentix Investor confidence came in better than expected at 16.7. This actually had little effect on the market as other factors played a bigger part.
• Germany Factory orders MoM and YoY came out later in the morning. This came out negatively MoM and better YoY. This saw the Euro weaken throughout the day and reach a 2 week low of 1.1919 against GBP. This weakness MoM shows that the leading economy in the euro zone is still fragile.
• Late on in the US we had the release of the consumer credit figure which came out much better than expected at $6.10B, over $4B better than expected.This shows that the banks are increasing their lending which could start to see inflation on the up again as the public start spending again and consumer confidence grows.

Today’s Market Movers

• In the UK today we have already had the release of the RICS house price balance this came out at -31, 7 points better than expected.  As the housing market is at the forefront of our economy this figure gives us an insight into how the UK economy is currently coping and although we are still in negative we can see the housing market is picking up again.
• In the Euro zone today the only 2 key pieces of data to come out are from Germany in the form of Retail Sales and Industrial Production.
• The first piece of data, Retail Sales, is expected to come out much better than previous MoM. As this data comes from Dec it may be due to a boost of shopping over Christmas, however this could see the Euro strengthen.
• The second piece of data coming out for Germany is the Industrial Production. This is expected to come out better MoM and worse YoY.  Depending on what the results are this could cause some volatility for the single currency.
• The last piece of data out today will be ABC/Washington Post Consumer Confidence ABC/Washington Post Consumer Confidence figureABC/Washington. This figure will give us a good insight into consumer confidence. As this is out late in the UK at 10pm GMT it may cause some volatility in the overnight trading session.