Transitional Care Cuts Hospital Re-Entry Rates, Costs

A study published earlier this year finds that 1 out of 5 older patients who are discharged from a hospital will return within a month, costing Medicare about $17 billion a year. A program in Philadelphia assigns nurses to follow up with discharged patients in order to prevent readmission.

The Currency Market Keeps on Eye on U.S.-China Dialogue

The U.S dollar remained weak against its major currencies in range-bound trade on Monday as U.S. equity markets remained in negative territory, indicating waning desire among investors for riskier assets. Also Monday, U.S. and Chinese officials began meeting for two days of economic talks, though many analysts questioned whether anything substantial would emerge. Nevertheless, traders will be on alert for any commentary regarding the U.S. dollar's status as a reserve currency. China is the biggest foreign investor in U.S. government debt, and any decline in demand could push up borrowing costs.

USD - Dollar Goes Volatile on Optimistic Homes Sales Data

The U.S. Dollar experienced an extremely volatile trading day on Monday, as the New Home Sales data was released from the U.S. economy. The result was a better-than-forecast 384,000 homes versus the previous release of 346,000 homes. This is a whopping 11% increase, the biggest monthly increase since December 2000. This led to many analysts stating that this is the end of the U.S. housing slump. The result led to volatile USD trading. Moreover, the Dollar closed lower against some of its main currency pairs, due to optimistic data from regions such as the Euro-Zone.

At one point in trading the USD actually reached a 7-week low vs. the EUR at 1.4299. This was following the extremely optimistic German consumer confidence figures. However, the pair finally closed 33 pips higher at the 1.4246 level. The USD recorded its second daily loss in a row of 30 pips against the British Pound, as the GBP/USD finished trading at the 1.6484 level. This comes about as optimistic data from Britain continues to drive up the British currency. The USD/JPY pair finished higher, to close at the 95.17 rate. This comes about as the Yen falls from higher risk appetite.

Looking ahead to today, forex traders can expect plenty of news coming out of the U.S. The most important of this being the CB Consumer Confidence figures at 14:00 GMT, the speech by Federal Reserve Chairman Ben Bernanke at 22:00 GMT, and the speech by Treasury Secretary Timothy Geithner from 23:00 GMT. These 3 events are set to determine the level of the Dollar as Tuesday's trading takes off. The big 3 pairs to watch today are the EUR/USD, GBP/USD, and USD/JPY, as traders anticipate a weaker U.S. currency as the U.S. economy continues to recover.

EUR - EUR Boosted by German Consumer Confidence Figures

The EUR hit a 7-week high versus the USD in Monday's trading, following the Gfk German Consumer Climate figures. The result showed a 14 month high 3.5, significantly higher than the forecasted 2.9. This helped the EUR strengthen throughout Monday's trading. The reason why this data is so significant is due to Germany being the largest economy in the Euro-Zone. The EUR also was helped as U.S. New Home Sales jumped 11%. The EUR is likely to continue benefiting from the optimistic economic news.

The EUR/USD cross hit 1.4299, before closing 33 pips higher at the 1.4246 level. However, the European currency fell by 15 pips vs. the British Pound to 0.8635. This may be due to investors buying-up Pounds as risk appetite increases with more and more signs of global economic recovery. The EUR/JPY pair climbed by over 35 pips to the 1.3532 level, as traders continued to ditch the JPY due to preferring riskier assets, such as the EUR and GBP. Therefore, overall, the EUR did make some reasonable gains in Monday's trading.

Today, we won't be expecting much economic news coming out of the Euro-Zone. However, Britain and Switzerland are likely to be the key drivers of the European currencies later today. Britain is set to release the CBI Realized Sales figures at 10:00 GMT. Switzerland is scheduled to publish the UBS Consumption Indicator at 06:00 GMT. The results of both of these are set to drive both the GBP and CHF in today's trading. Additionally, the EUR will go volatile on both of these publications, and on key data coming out of the U.S. throughout today's trading.

JPY - Yen Falls to 3-Week Low vs. Dollar

The Yen fell to a 3-week low against the Dollar yesterday, in response to the rise in new U.S. home sales. The Yen also weakened on speculation that declines in currency volatility will spur carry trades. In carry trades, investors borrow at a low rate in one country and invest in another country with higher returns. This behavior is likely to continue as the main economies improve, and traders sell-off the safe-haven JPY. Thus the Japanese currency fell over 30 pips against the USD, EUR and GBP.

It is likely that the Yen will continue to decline today, as forex traders continue to take into account the optimistic economic data that was published from the U.S. and the Euro-Zone. The JPY will go very volatile in late trading, as Japanese Retail Sales are published at 23:50 GMT. It would be a wise choice for forex traders to open their JPY positions now in order to have the opportunity to profit from volatile market behavior as Tuesday's trading commences.

Crude Oil - Crude Oil Hits 3-Week High

Crude Oil hit a 3-week high of $68.94 a barrel on Monday, as the USD declined in response to positive housing data from the U.S. However, weaker earnings figures in some instances pushed Oil down from its peak, as the commodity finished trading at about $68.06 a barrel. Crude was also helped by a weaker Dollar in earlier trading due to positive economic news from Germany. However, it seems that in this instance, risk appetite wasn't strong enough to hold-up the value of Crude Oil on Monday.

As for today, Crude prices may rise if the USD weakens considerably, and there is increasingly optimistic economic news led by the U.S. Additionally, traders need to feel that there is enough demand to support Crude Oil at its current price level. In order to take advantage of the current trends, it is advisable for forex traders to begin opening their positions in Crude Oil and other commodities prior to volatile market conditions.

The Currency Market Keeps on Eye on U.S.-China Dialogue

Bernanke: ‘I Had to Hold My Nose’ To Bail Out Banks

Federal Reserve Chairman Ben Bernanke said last year's taxpayer-financed bailout of big financial companies was necessary to avoid "a second Great Depression." His comments came during a town hall-style meeting designed to reassure Americans about the economy.

Dollar Falls as Investors Turn to Riskier Assets

The rally in global stock markets has led to a sell-off of the safe haven currencies and pushed investors to higher riskier assets as many see the global recession coming to an end. The encouraging global economic data has also been helping push Crude Oil to the $69 price level.

USD - USD Depreciates, Consumer Confidence Growing

The steady improvement to risk appetite over the previous week has helped push the EUR/USD above 1.4200 at the start of this week's trading. While the greenback has been trading relatively flat versus the other major currencies, it is nonetheless accelerating towards intense volatility at the start of this week. The rally in global stock markets has helped convince investors to pull away from the safety of the dollar in exchange for riskier assets. In the forex market, this means a diversification towards the EUR, CAD and even AUD.

A sudden surge in the Asian stock markets at the end of last week has helped reduce demand for safe-havens like the USD and JPY, but their attraction has remained steady enough to prevent vast drops in value. Confidence may be climbing the world over, but investors may not yet be brave enough to jump whole heartedly back into riskier investments. A demand for safe-havens remains despite the boost in optimism.

Looking ahead this week, we'll complete another part of the picture for the US housing market with the New Home Sales report expected later today at 14:00 GMT. A more intricate look into American optimism will be delivered on Tuesday with the CB Consumer Confidence report, and week's end will provide traders with a look into the first portion of this year's second quarter GDP, which tends to have the most impact of the 3 reports released on this figure. These reports will no doubt put the USD at center-stage for the duration of the trading week and investors would be unwise to skip over this week's news events surrounding the US economy.

EUR - EUR Strengthens as GBP Sinks; Risk Appetite Climbing

The spectacular results from last week's PMI and German Ifo Business Climate report helped push the EUR higher against most of its currency pairs. However, the British Pound suffered heavy losses at the end of last week's trading due to worse-than-forecasted GDP results. Climbing back above the 1.42 level against the USD, and even spiking upwards of 0.8650 against the Pound Sterling, the EUR's gains were unmatched last week.

Precisely opposed to the value of the EUR, as pertaining to risk appetite, the Euro-Zone currency indeed strengthened due to the perception that its regional economy is stabilizing. This belief has helped stoke the notion that recovery is on the way by the end of this year. The subsequent return to riskier assets helps devalue safe-havens such as the Dollar, while pushing more diverse currencies, such as the EUR, higher against the other currencies.

No doubt the devaluation of the Pound also led to a boost in the value of the EUR by the sheer weight of regional competition. As the wave of risk appetite took hold last week, the GBP may not have offered investors the necessary level of security, which also helped boost the gains made by the EUR.

While economic releases from the Euro-Zone led the market last week, and also helped revive demand for the EUR, this week's trading will see no such thing. The EUR is surprisingly absent from this week's calendar as the US economy takes the wheel. If US data can encourage the recent return to risk appetite, then the EUR's rally may continue this week.

JPY - JPY Anticipating European Market Opening

The recent rise in risk appetite has helped the mild return of the Yen-denominated carry trade. With the JPY climbing modestly against most pairs, the gains seem to be muted as investors weigh the JPY as a safe-haven or carry-trade, and the balancing act has led to a series of consolidation trends in the JPY crosses.

It appears the Japanese Yen has leveled-off versus almost all of the major currencies in anticipation of a rather large impending movement. If the rally in Asian stocks continues from last week, investors may see the JPY lose value as the carry-trade returns with full force. For the time being, it appears as if traders the opening of the European markets to weigh in on positions placed at the end of last week. If expectations are correct, forex market participants could see a sharp drop in the value of the Yen in today's early trading hours.

Crude Oil - Oil Reaching $70 as Market Optimism Surges

As the US Dollar has declined over the last few trading days, the value of a barrel of Crude Oil has been appreciating. The steady climb back towards $70 a barrel has helped boost the GDP of many oil-producing Arab countries. The downside is the ever-present and growing connection between Middle Eastern economic growth and fluctuations in the price of oil, which has wrought havoc on these countries over the past few months despite efforts to diversify investment and industry.

Market optimism has helped return many investors away from the USD and into riskier assets. This helps boost the demand for commodities as a method of portfolio diversification. While the current price range of Crude Oil may not be justified by recent supply and demand levels, it nevertheless reflects the value derived by speculation of future growth. The surge in market optimism helps bring about the purchase of Crude Oil as investors anticipate industry growth world-wide. If this week's news events continue to boost this optimism, Crude Oil may easily climb above $70 in the days ahead.

Article Source - Dollar Falls as Investors Turn to Riskier Assets

What’s with MLM home based business? Interesting Points to Take Into Consideration

Considering a MLM home based business?

If so, it could be an incredibly lucrative home based business choice for you. But you should also know exactly whether or not what you are getting into is truly a MLM home based business or something else. It may be a scam waiting to pounce on you. And also, you need to weigh out the positives and negatives of a MLM home based business before you decide that if it is the suitable business for you.

Making sure you are actually getting involved in a genuine MLM home based business is essential to save yourself some difficulties later on. A MLM home based business involves the direct selling of products or services through the recommendations or endorsements of independent representatives.

If you are the representative, you are given a payment on any sales that came from your endorsements.

Be aware of that most products sold through a MLM home-based business are not essentially advertised through mainstream media or in stores.

The confusing part of determining if your MLM home based business is legitimate can be quite hard due to there are a number of pyramid schemes out there that are dangerously similar to a legitimate MLM home based business concepts.

Keep in mind, a pyramid method is dishonest, and getting involved in one can cause you more problems than you can possibly imagine.

You will need to do your research into the MLM home based business that you are considering so that you are sure that the kind of MLM home based business you are going to run is valid and legal.
Usually if your investment is proportioned to the product or service you are selling, your MLM home based business is valid.

There are numerous advantages to having a MLM home based business.

Firstly, you will be working from home where you can virtually set your own hours, which is probably why you are considering a MLM home based business in the first place.

Moreover, you will not have to manufacture any products, for the reason that you are usually selling things that are already made. The MLM home based business will generally come with a pre-determined marketing plan.

Lots of people suffer through the process of determining the most effectual methods for marketing their products, but with a MLM home based business, you are relieved of that stress.

The disadvantage of having your own MLM home based business, though, depends on your personality.

If you have good leadership skills and is a self-starter, then a MLM home based business will pose a little hardship to you.

However, if recruiting and selling gives you hives, then starting and maintaining a MLM home based business may be more of a challenge, since your success depends on your ability to create a downline of recruits.

But then, having your own MLM home based business means that you can live out your dream of being your own boss and having flexibility in your work timetable.

You do not need any prior skill, and you can trust in your personality to employ and maintain your downline. You only have to hard working and consistent in getting downlines. Do your research to make sure your MLM home based business is a lawful business. This way, you can truly enjoy the freedom and the profits that the MLM home based business offers.

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Use Index Funds, Not Mutual Funds and Save 80% In Fees

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50 Ways to FAIL On Twitter

Like many others, I scoffed at Twitter when I first heard of it. What use could sending short messages to people I don’t know be?  The mental leap from IM and Facebook status updates to Twitter makes it easier, but business use seemed pointless at first.  As I noticed more of my Search, Social and PR industry peers using Twitter, it seemed a good idea to test out.

While I don’t have a million followers, or even 100,000, I’ve found out that for my purposes, quality is the key and the quality followers that i have I am lucky to be associated with are appreciated a lot more. Being strategically useful and helpful builds trust, attracts influential followers (vs bots and spammers) and results in a new channel for social networking.  Individual tweets may or may not be useful, but when you add them up over time, a bigger picture emerges.

Twitter Marketing tips are not hard to come by. Ease of use combined with the overall ease of publishing online makes available more than enough advice on using Twitter as a consumer as well as for brand monitoring, marketing, customer service, real-time search, competitive intelligence and even direct sales.

Yes, there’s plenty of advice on what you should do with Twitter, but based on increasing mis-behaviors, there are many ways to fail.  Below is a list of 10 “Don’ts” on Twitter from me, followed by 40 more provided by the smart Tweeple who responded on Twitter :

• Don’t auto reply follows with a link to your free piece of crap ebook. This sentiment is shared several times below.

• Don’t provide an obscure description of who you are and what you do

• No photo or an image that only makes sense to you and your imaginary friends

• Don’t mention a great resource with no link

• Not customizing your background

• Don’t post 10 messages in succession (also repeated below)

• Don’t follow over 1000 people in a 2 hour period

• Don’t write about the cat/hamster/potted plant over and over again

• Don’t swear often and expect business people to take you seriously (Unless you work for Outspoken Media)

• Don’t over-abbreviate.

Here are a few “Twitter FAIL” tips from Tweeple following @leeodden

• @glenngabe DON’T tell people on the public timeline that someone else is on vacation.  Saw this happen last week… Can get a house robbed!

• @glenngabe DON’T reply on the public timeline when you meant to DM (or when it should be a DM…)

• @cyandle don’t retweet EVERYTHING…

• @kholloway Don’t expect me to follow you if you have 0 updates

• @aimclear DO research content you recommend, add value to the bookmark, Success is gained by offering value, Friends made by being a friend.

• @aimclear Don’t compliment gratuitously in public

• @shelisrael  Don’t tell people not to do something on Twitter. It will just give them ideas.

• @kenburbary Obvious but annoying, DON’T auto DM spam (also mentioned by @CarrieHill @Justin_Freid @NicoleElise)

• @RonArden Twitter don’ts: don’t send spam and don’t send me ads for things. This is the quickest way to get me to unfollow someone.

• @doctordns Just don’t be stupid – some people will take whatever you write and use it against you. If not now, then when you least expect it!

• @JeremyMeyers “don’t” spend all your time on twitter talking about twitter (also mentioned by @timjahn)

• @thelostagency dont tweet broken links, and if you are retweeting check link is accurate and not spam/broken

• @rickburnes Don’t pretend that Twitter alone is a marketing plan (you only get referrals from Twitter if you have great content to refer to).

• @steveplunkett don’t ever argue.. in writing on twitter…

• @Aerocles Don’t tweet breaking news that’s more than one hour old, we’ve all heard/seen it already

• @brandonfritz@leeodden Don’t St@lk

• @KateOnline Don’t take credit for tweets that did not originate from you (also mentioned by @matthewdiehl)

• @glager Dont report on every piece of news you can get your hands on

• @kimgarretson Don’t tweet about your need for coffee in the mornings. This has moved past cliche to downright irritating.

• @Ms_Write Test links before tweeting them. Nothing worse then a dead link.

• @MBenti Before you use twitter for your business b/c it’s the “thing to do”, take time to observe and figure it out for yourself.

• @Zarniwhooper Don’t retweet something and leave off the original Twitter poster. Always give credit to those who wrote it first.

• @KaseyInCharge here’s a “don’t”: don’t talk about ways to increase followers. so annoying. people are here for conversation…

• @AmberGallihar Don’t repost the same tweet more than three times. We saw it.

• @Zarniwhooper Don’t say anything that could get you fired or prevent you from getting a job.

• @Zarniwhooper Don’t be boring. A simple rule is “Never tweet about food or the weather. And never your bathroom habits. Seriously. Never.

• @steveplunkett no foul language in same tweet as a URL. (SafeSearch Anchor text)

• @Saudiqua Don’t tweet emotional rants!

• @bobmutch ya don’t share stuff you are doing or going to do that is too personal

• @melaniemitchell don’t sell to people who don’t care about what you have to say.

• @michaelpearsun Don’t worry about your follower count. It’s about quality.

• @michaelpearsun Don’t let spammers into your feed

• @marrina Re-tweet of a re-tweet. So annoying.

• @patiomensch First, you must call it a list of “don’ts”  (ah, the spelling Fail)

• @EstrellaBella10 Don’t post multiple back-to-back updates on Twitter. Many people have complained about that.

• @myklroventine Don’t try to explain it to Letterman

• @imeldak Don’t join things that gets you thousands of ‘instant’ followers. Quality of followers is always better than quantity

• @anon Don’t post a link to a picture of yourself with a large knife, especially if you are a governor

• @anon Responses to ethics charges are probably best left for a forum where you can respond with more than 140 characters

Last, but not least: @marrinaHelp compile a list of “dont’s” for Twitter

That should get our “What not to do on Twitter list” party started. What are your Twitter dont’s?

For Some Pilots, Home Is An LAX Parking Lot

Commercial airline pilots have created a city of trailers and RVs in a parking lot along the edges of the nation's third busiest airport. Living there allows them to avoid lofty L.A. rent at a time when pilots' high-flying salaries have sunk to new lows.

Forex Trading Weekly Forecast – 07.27.09

US Dollar on the Brink of a Trend Defining Plunge Ahead of 2Q GDP

Fundamental Outlook for US Dollar: Bearish

- Fundamentals support a recovery in US and global growth, but how does risk appetite factor in?
- Bernanke sees signs of stabilization, calls focus on the deficit
- Do technicals call for a dollar collapse or recovery?

It was a tenuous week; but the dollar was able to ultimately hold its own through the close. However, just because momentum behind the earnings-driven rally in risk appetite has stalled does not mean that the world’s most liquid currency has avoided a collapse all together. Sentiment winds have died down; but they can easily jostle the safe-haven dollar should another economic catalyst surface. This makes for an uncertain future when combined with the fundamental influence that the 2Q GDP report will have on the currency. Now, not only do traders have to interpret the data, they will also have to judge whether it has a greater impact on risk appetite or growth considerations for the beleaguered dollar.

Looking ahead to next week, the most immediate threat to the greenback’s stability is the intensity and direction of risk appetite. While this currency is deeply mired in speculation surrounding the economy’s leading or lagging growth potential, interest rate expectations, and deficit projections among other influences; risk appetite has proven itself to be insuperable. With the Federal Reserve vowing to keep the benchmark lending rate at levels that insure a carry status when conditions do turn around and politicians ensuring the economy will struggle with record levels of debt for years to come, there seems little doubt that the dollar will maintain its position on the opposite of risk appetite. But, considering the stalled progress most of the dollar and yen crosses saw last week; is there a strong shift in sentiment in the works? With EURUSD and GBPUSD just off of key levels of resistance, the pressure is growing. However, the primary source of momentum this past week – the second quarter earnings season – is already on the decline. If left up to the markets alone, equities have already forged new highs for the year; but commodities, fixed income and risk-sensitive currency pairs have not pushed to comparable levels. Oddly enough, one of the most likely catalysts for risk going forward also happens to be the most attention grabbing indicator on the US docket: GDP.

According to economists forecasts, the world’s largest economy contracted at a 1.5 percent on an annualized pace through the second quarter. This would be a marked improvement from the 5.5 percent and 6.3 percent rate of the recession through the first quarter of 2009 and fourth quarter 2008 respectively. This would certainly confirm policy officials expectations for a return to positive growth by the end of this year or beginning of the next; but through the near-term it is still a call for speculation to rank the economy’s performance against that of its major counterparts. China recently reported a sharp advance to a 7.9 percent pace of expansion while the UK printed a record 5.6 percent contraction. And, then there are still those economies that have yet to report their numbers. Japan suffered a record-breaking 14.2 percent slump through the first quarter, but is expected to snap back according to BoJ and Cabinet officials. The Euro Zone awaits it August 13th release, but the Bundesbank has already stated Germany saw only a ‘slight contraction’ through the second quarter. This will increasingly become a consideration of nuance.

The other facet of the US 2Q GDP release is that it will be accepted as a gauge of global growth. This further complicates the issue. Should the reading be good, the influence on risk appetite could outweigh the implications for US returns and actually drag the dollar down; and vice versa. Another important consideration is the timing of this release. Due Friday, speculators may decide to move the dollar before the data crosses the wires. If this is the case, the GDP report could factor into long-term projections but not short-term volatility.

Euro Threatened with Mounting Deflation Risk, US Bond Auction

Fundamental Forecast for Euro: Bearish

- German Producer Prices Fall Most in Over Two Decades
- Euro Zone, German PMI Results Top Expectations, Stay in Below 50
- Sentiment Points to Continued Euro Gains Against the US Dollar

The Euro looks vulnerable in the week ahead as headline inflation figures point to the increasing likelihood of deflation while a the US Treasury holds a record-setting bond auction that stands to boost the Dollar at the expense of the single currency. Germany’s Consumer Price Index is set to show the annual pace of inflation turned negative for the first time in 23 years in July after holding at a standstill in the previous two months. The broader Euro Zone measure of consumer prices has already turned negative, shedding -0.1% in June and likely to slip another -0.4% in July. If expectations of falling prices become entrenched, the currency bloc could be facing a long-term period of stagnation as consumers and businesses are encouraged to wait for the best possible bargain and perpetually delay spending and investment.

For their part, the European Central Bank has seemingly struggled to formulate an effective policy response to the deflationary threat thus far. Jean-Claude Trichet and company have focused on banks as the vehicle through which to make money cheaper and put a floor under falling prices, promising unlimited lending to the region’s financial institutions including an unprecedented 442 billion euro in 12-month bank loans. The ECB will also implement a 60 billion bond-buying scheme. To the central bank’s credit, borrowing costs have indeed moved lower: although the ECB publicly maintains target interest rates at 1%, it has allowed the average cost of overnight lending (referred to as EONIA) to drift far below that. Indeed, borrowing in Euros has been consistently cheaper than doing so in British Pounds since late June, even though the Bank of England’s stated interest rates are substantially lower at 0.5%. However, the lower cost of credit between banks has not translated into lending, and so has offered little stimulus to the overall economy. Indeed, loans to Euro Zone businesses and households grew just 1.8% in May, the lowest since records began in 1991. Banks may be choosing to hang on to cash as a buffer against $1.1 trillion in as yet unrealized losses linked to the subprime mess, according to the IMF, as well as the fallout from looming defaults and/or devaluations among the EU’s newly-minted central European members. In any case, the door is open for traders to punish the Euro as the ECB’s inability to ensure that looser monetary conditions translate beyond the interbank market make deflation all but certain.

An unprecedented bond auction in the United States may also weigh on the single currency. The US Treasury’s announced last week that it will sell a record $115 billion in bonds next week in a bid to help finance the rapidly growing public deficit, pushing 10-year notes to register the largest daily loss in nearly seven weeks and sending yields to the highest level in a month. We have argued for some time that the US Dollar will benefit as the government floods the market with new debt: Treasury prices will head sharply lower, putting tremendous upward pressure on the long-term interest rates. This will make USD-denominated assets attractive to yield-seeking investors, driving demand for the greenback. Because the Euro is the second-most traded currency after the greenback, it often serves as the de-facto anti-Dollar, with short term studies showing a hefty -85.8% correlation between average indexes of the two units’ values. This means that any meaningful turn in sentiment in favor of the US Dollar will weigh heavily on the Euro, not just in the pairing against the greenback but across the board.

Japanese Yen Looks for the Next Engine for Risk Appetite

Fundamental Forecast for Japanese Yen: Neutral

- Earnings season draws to a close; but where does that leave risk appetite?
- Japan’s trade balance improves as both imports and exports plunge
- Yen crosses don’t offer a clear cut technical outlook

Direction from the Japanese yen is often the product of risk appetite; and the fundamental outlook for next week doesn’t suggest this essential correlation will break any time soon. However, this connection may actually complicate the future for speculators rather than make it more straightforward. The primary source of what has essentially been a market-wide advance in risk appetite these past two weeks seems to have petered out. Earnings releases are in decline and there are very few individual releases on the docket that can initiate a global shift in sentiment on its own. Among other potential catalysts – like growth speculation – there are many contingencies and shades of gray that could make the yen a very difficult currency to trade going forward.

First and foremost, the market will have to reconcile its predilection for earnings data. Ever since Goldman Sachs reported record profits through the second quarter (a strong sign considering it is a financial firm, struggling with a global recession and it had just repaid a rescue loan from the US government), market participants have been putting their sidelined funds back into the capital markets to make a competitive return. However, through the end of this past week, we have seen upside surprises diminish and the notoriety of those companies names attached to the earnings reports recede. Looking back on the week four Fed ‘Stress Tested’ banks report losses and many more blue chips missed forecasts. Looking ahead, there are very few major reports due; but more importantly, there are far fewer days when a group of notable earnings releases will be reported at the same time (and therefore can generate enough influence to catalyze risk appetite. One of the last opportunities for a earnings related swell is on Thursday when ExxonMobile, MetLife, Walt Disney, Dow Chemical, Travelers and Colgate are scheduled to release.

If we are to see the market move away from earnings, where should we expected the market’s drive to come from? Sentiment can be a catalyst of its own. Left to their own devices, speculators are capable of reviving and breaking major trends. Equities across the world were able to capitalize the rise in optimism over the past two weeks and record new highs for the year. If the market decides that this has turned the tides for yields and investment flows, the rest of the markets may look to play catch up and in turn leverage risk appetite in the process. There may also some fundamental factors choosing a rise or fall in sentiment. There are many growth-related indicators on the docket to feed the outlook for the world’s recovery; but it is Friday’s US GDP figure that will truly establish the progress of the global economy. The consensus calls for a significant moderation of the nation’s contraction. However, whether we receive a positive or negative surprise (or no surprise at all), that is a long time to wait when market conditions seem to require an immediate resolution.

British Pound May Find Support On Improving Housing Market

Fundamental Outlook for British Pound: Neutral

- U.K. GDP contracted by 5.6% annually, which was the most since records began in 1955
- U.K. Retail Sales rose more than expected by 1.2%, Led by a 4.7% increase in textiles
- BoE voted 9-0 to keep rates and QE measures unchanged

The British pound ended a week of choppy price action heading lower as the 2Q GDP preliminary reading showed a deeper than expected contraction of 0.8% against expectations of 0.3%. Economic growth on the year dropped by a 5.6% which was the most since record keeping began in 1955. The growth figures raise concerns that the BoE would need to add to their quantitative easing efforts in order to ensure an economic recovery. The release of the MPC’s minutes from the July meeting showed that after considering additional measures the committee unanimously voted to stand pat but would review their alternatives again in August when they release their quarterly inflation report. A 1.2% increase in retail sales spurred hope that domestic consumption would start to improve as non-food sales rose 1.6% pointing to an increase in discretionary spending. However, elevated unemployment levels and the service sector declining by 1.0% in the second quarter will make future growth challenging.

Although the drop in growth is alarming, the improving outlook for the global economy which was evident in the massive rally in equities during the week could keep the MPC on hold. Bank of England Deputy Governor Charles Bean said this week that the economy may have stopped shrinking which could signal the potential for an improvement in the central bank’s growth estimates when they release their latest report on August 12. The growth numbers and the corresponding inflation outlook will determine the future course of action.

The economic calendar this week will give us further insight into the U.K. housing market and prevailing credit conditions. The Nationwide Building Society is expected to show that house prices rose 0.2% in July as thawing credit markets are underlining demand. Indeed, mortgage approvals are forecasted to rise to 47,000 from 43,400 in June which would be the highest since April, 2008 but still far below the ten year average of 97,000. The BoE lending report mortgage lending was showing sign of improving but that credit for consumers and businesses remains a challenge. The GBP/USD has been trading at the top of its recent range of 1.6000-1.6700 which could leave it susceptible to a move lower. However, we have seen solid near-term support from the 20-Day SMA at 1.6371, which is starting to converge with the 50-Day SMA at 1.6260- a level that has held since March.

Written by John Kicklighter, Ilya Spivak, John Rivera and David Song, Currency Analysts
Article Source - Forex Trading Weekly Forecast - 07.27.09