Major Market Mover: Eyes On Minutes…

A bottom is not found yet, the housing starts and permits plunged yesterday heavily to almost a 17 year low, signaling that there is no recovery in the US housing market, besides to the construction that is still struggling pushing to more unemployment and layoffs by the employee

According those negative data the US dollar plunged against majors giving them the chance to escalate higher after the bears got mugged badly in the past two weeks. The Euro rose to record a high of 1.4806 in yesterday's session, but it plunged again to trade in the Asian session at 1.4762 levels; with the Pound holding still at 1.8641 levels affected by the sever weakness faced in their internal fundamentals, as now markets are waiting for the BOE minutes with expectations that it would be dovish with some constraints of high inflationary pressures.

Like others the Royal lands fell in the same dilemma of rising inflation and falling growth, but last week they had to officially say that in public, they couldn’t prevent the spillover from the US housing slump and the Credit Crunch that was created by the Americans.

A sluggish growth along with rising consumers' prices will continue to prevent the MPC from cutting rates or hiking rates, as they just waiting to see when prices will ease especially after oil prices plunged down in the end of July extending it to August, if prices eases the Mervin and his committee would be thinking about cutting rates just to salvage the economy from a contraction or a threat of recession.

Though the picture is not clear yet, the inflation report last week cleared the view but what would the Britons do is not obvious, like other economies they are stuck in the middle and the best solution at the time being is to keep rate at 5.00% until they see when the commodities are going to ease.

Not just the minutes; the Kingdom will be releasing some important fundamentals of inflation, expectations clears that the money supply in the Royal lands eased on the month to 0.5% from the previous rise of 1.8%, along to the yearly that would be easing to 10.7% from the previous 11.4%. Expectations points to a change in public borrowing into a surplus from the deficit of 9.2 billion; whereas the deficit was not favorable by the economy.

Markets attention would be headed toward the rising the British data for today, to see if the minutes would add any thing new on the inflationary report that was released earlier; as the calendar lacks any other major fundamentals the Americans would be just waiting for the Crude Oil Inventory report later today.

Crown Forex

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