FOREX TRADE

This weeks key indicators:

While a rebalancing of the global economy is imperative for a renewed period of sustained growth, in the short term two areas central to recovery will be the US consumer and Chinese investment – foundation stones of the last boom.

Thursday sees US retail sales data for May released. Sales volumes are forecast to have risen by 0.3 per cent during May, after an unexpected fall of 0.4 per cent in April, taking the annual rate down slightly to -7.7 per cent.

The University of Michigan survey of US consumer confidence for June is published on Friday. The headline index has risen for the past three months, up from 56.3 in February to 68.7 last month. Analysts expect another rise, to 69.2.

The most important releases in a heavy week for Chinese data are Thursday’s report on fixed-asset investment, and industrial production for May, released on Friday.

The Chinese stimulus package was focused on infrastructure projects, and investment is expected to be up 31 per cent for the January to May period compared with the first five months of last year.

Industrial output is forecast to have bounced back in May, up 7.9 per cent year-on-year, compared with 7.3 per cent in April.

Germany has been one of the hardest hit of the larger economies as its industrial base has reeled from the sharp decline in world trade.

The country’s new factory orders, out on Monday, are expected to fall back slightly.

Germany’s industrial production data for April, released on Tuesday, is expected to show a fall after remaining flat in March.

In the UK, the latest monthly report on the housing market from the Royal Institution of Chartered Surveyors, out on Tuesday, is likely to show further signs that activity in the market is picking up slowly.

Sales per surveyor are expected to rise for a fourth straight month, and the balance of those reporting higher prices during the past three months is forecast to rise.

The markets will have to digest a constant barrage of rumours and supposition over the future of Gordon Brown as well as the incumbent government this week, with any continued uncertainty likely to weigh up on the UK markets.

UK industrial production and manufacturing production numbers will be watched for signs of improvement on Wednesday after the data last month showed record year-on-year declines.

In indicies, today the FTSE is expected to open down. The DAX is expected to make a modestly lower start, down 8 points at 5,069, and the CAC is looking about 7 points lower at 3.332.