By Peter Robinson – The U.S. Preliminary University of Michigan (UoM) Consumer Sentiment report is due tomorrow at 13:55 GMT. The previous reading came at 72.2, after it was revised upward from 69.5, highlighting a general growth in consumer confidence. Expectations for this month stand on 73.5, indicating a slight improvement in consumer sentiment.
There is a good reason to believe that consumer sentiment tomorrow would at least turn out to be near expectations, if not higher. This expectation is premised on the array of positive U.S. macro-data in recent months as a result of the U.S. efforts to ease the strain on the economy. The most recent was the Non-Farm Employment Change figure which came higher than expectations. Indeed, Obama’s government increased liquidity and kept low interest rates. The improved U.S. employment conditions would continue to support consumer sentiment as long as fiscal conditions remain.
Consumer Sentiment is an important indicator about the U.S. signaling an expanding or slowing economy. Better-than-expected Consumer Confidence usually supports the local currency but in the case of the U.S., a good outcome may improve confidence all around the world. In fact, if the U.S. economy would signal growth, it would support other countries who export to the U.S. and among these countries are troubled European countries.
The consumer sentiment report is published after another important report due on Friday: Retails Sales. If both indicators are positive it might improve investors’ confidence and put aside recent worries about the European economy. This week so far has been volatile although it was low in macro news. Both these figures could set a new direction to currencies and commodities going into next week.
Forex Market Analysis provided by Forex Yard.
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