USD Bulls not Satisfied Post FOMC Minutes

• GE GDP figures generally somewhat lower than expected.
• SW PPI MoM/YoY (Jul) out at 0.7%/3.3% vs. 0.5%/3.1% expected.
• GE IFO Business Climate (Aug) out at 94.8 vs. 97.2 expected.
• GE IFO Curr. Assessment (Aug) out at 103.2 vs. 104.4 expected.
• GE IFO Expectations (Aug) out at 87.0 vs. 90.5 expected.
• SZ UBS Consumption Indicator (Jul) out at 1.848 vs. 2.246 prior.
• US S&P/CaseShiller Home Prices (Jun) out at 167.69 vs. 167.20 expected.
• US S&P/CS Composite-20 YoY (Jun) out at -15.92% vs. -16.20% expected.
• US S&P/Case-Shiller US HPI (2Q) out at 155.32 vs. 159.20 prior.
• US S&P/Case-Shiller US HPI YoY (2Q) out at -15.4% vs. -16.2% expected.
• US Consumer Confidence (Aug) out at 56.9 vs. 53.0 expected.
• US New Home Sales (Jul) out at 515K vs. 525K expected.
• US New Home Sales MoM (Jul) out at 2.4% vs. -0.9% expected.
• US House Price Index MoM (Jun) out at 0.0% vs. -0.4% expected.
• US House Price Purchase Index (2Q) out at -1.4% vs. -1.5% expected.
• US Richmond Fed Manufacturing Index (Aug) out at -16 vs. -10 expected.
• US Weekly ABC Consumer Confidence out at -50 vs. -49 prior.
• US Construction Work Done (2Q) out at -2.6% vs. 1.5% expected.
• NZ NBNZ Business Confidence (Aug) out at -20.5 vs. -43.2 prior.

THEMES TO WATCH – UPCOMING SESSION

Key Risk Events (All times in GMT)

US July Durable Goods Orders (12:30)

US Fed's Lockhart speaks on Inflation (12:35)

US Weekly API/DOE Energy Inventories (14:35)

GE August CPI (TBA)

 

As we expected, the FOMC minutes did not bring anything new to the table. The Fed is still worried about the downbeat in global growth and elevated inflation.  Among the voting members, only Fisher voted for an increase in the benchmark rate. As stated in prior minutes, FOMC will continue to monitor the development, expecting inflation to moderate and act if needed. In our view, this points towards no changes in the benchmark rate for the remainder of 2008.

Looking at the market triggers today and for the remainder of the week, the calendar is pretty heavy. Today, the release the Durable Goods will attract the market's attention, tomorrow GDP figures as well as quarterly Core PCE and the week will finish with Personal Income & Spending and monthly and yearly PCE figures. Also Chicago PMI and Michigan Confidence will be released on Friday.

The USD has weakened since the FOMC statement yesterday and we are biased towards additional USD-weakness for the remainder of the week. Intra-day, we are buyers on dips towards 1.4645 and see further upside above day highs at 1.4743 (just above 50% fibo in recent wave) for a test of 1.4780 and then a test of the 1.48-figure. Should the figures surprise to the upside, downside in EURUSD opened below 1.4615.