Canadian dollar sets fresh multi-month highs versus euro and Aussie

In trading against its major counterparts, the Canadian dollar staged a sharp rise on Tuesday morning in New York as oil prices inched higher on concerns over Hurricane Gustav.

The loonie surged to new multi-month highs versus the Australian dollar and the euro. At the same time, the Canadian dollar rose to near a 3-week high versus the greenback and a 25-day high versus its Japanese counterpart in the mid-morning trading on Tuesday. Light sweet crude for October delivery added $2.29 to reach $117.40 a barrel on Tuesday morning. Prices had dropped as low as $112.36 in electronic trading. The oil prices climbed on concern that Gustav strengthened to a Category 3 hurricane as it headed towards Haiti on Tuesday morning. Some forecasts see the storm heading into the Gulf of Mexico, which could threaten the oil region. The Canadian dollar advanced to near a 3-week high of 1.0415 against the US dollar by 10:15 am ET. This may be compared to the previous session's 5-day high of 1.0564 that hit around 5:40 am. The greenback-loonie pair is currently quoted at 1.0431. According to a latest report from the U.S, the S&P/Case-Shiller national home price index dropped a record 15.4% in the second quarter compared to the same period last year. The Case-Shiller 10-city posted a record year over year decline of 17% and 20-city indexes were down 15.9%. Economists were expecting the second quarter home price index to drop 16.2%. At the same time, the Department of Commerce released its report on new home sales in July, showing that new home sales surged up 2.4% to an annual rate of 515,000 in July from the revised June rate of 503,000. Economists had expected sales to fall to a rate of 525,000 from the rate of 530,000 originally reported for June. Meanwhile, the US Conference Board said today that its consumer confidence index jumped to 56.9 in August from an unrevised 51.9 in July. The increase came in well above the expectations of economists, who had expected the index to edge up to 53.0. Against the yen, the Canadian loonie edged up to a 25-day high of 105.46 by 10:40 am ET. This may be compared to today's early Asian session low of 103.76. As of now, the loonie-yen pair is worth 105.36. The Bank of Japan said today that the corporate service price index, which measures corporate prices of communications, transportation and advertising, climbed 1.3% on year in July. The figure fell slightly below analysts expectations that were looking for an increase of 1.4% on year and it was up from the 1.2% annual increase in June. On month, the index eased 0.1%. The Canadian dollar surged to a 5-1/2 month high of 1.5267 versus the euro by 10:35 am ET, compared to today's early European session low of 1.5428. The pair traded as German business confidence declined to 94.8 in August from 97.5 in July. Economists had expected the index to fall to 97.2. As of now, the euro-loonie pair is trading at 1.5308. Traders also weighed a detailed report from the Federal Statistical Office that the German economy contracted 0.5% sequentially in the second quarter, after expanding 1.3% in the first quarter. Against the Aussie, the loonie ticked up to a 6-1/2 month high of 0.8925 by 10:15 am ET. The Aussie-loonie pair that closed yesterday's trading at 0.9074 is currently quoted at 0.8945. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

FOREX-Dollar extends gains on consumer confidence data

(Updates with latest market moves, adds reaction to U.S. consumer confidence report for August)

NEW YORK, Aug 26 (Reuters) - The U.S. dollar extended gains on Tuesday after a report showed U.S. consumer confidence was higher than expected in August.

The euro was last trading at $1.4637 <EUR=> compared with 1.4645 before the report. The dollar was last trading at 109.50 yen, up 0.2 percent on the day, from 109.40 yen <JPY=> before the release of the data. (Reporting by Nick Olivari; Editing by James Dalgleish)

Europe Round Up - German Economic Outlook Turns Gloomier

Tuesday, several key data released during the day added to the gloomier outlook for the German economy. Business confidence in the largest Eurozone economy fell to a three-year low, while consumer confidence declined further.

Further, the contraction in the economy during the second quarter was confirmed. Eurozone The German business confidence deteriorated more than expected in August, reaching the lowest level in three years, as the economy experiences a more difficult situation. Firms have assessed the current business situation as clearly unfavorable and projected further negative development in the coming half year. The business survey results released by the Munich-based Ifo research institute revealed that the business confidence index fell to 94.8 in August, declining for three consecutive months. Economists had expected the index to fall to just 97.2 from July's 97.5. Elsewhere, a monthly survey from the GfK Group showed that German consumer confidence, which was depressed by subdued economic outlook reached the weakest level since 2003. Consumer confidence for September dropped to 1.5 points from August's 1.9 points. A detail report from the statistical office showed that the German economy shrank in the second quarter for the first time in almost four years on reduced investment in construction as well as machinery and equipment. The economy contracted 0.5% sequentially in the second quarter, after expanding 1.3% in the first quarter. On a yearly basis, the economic growth stood at 3.1%, larger than the 1.8% in the first quarter. The calendar adjusted Gross Domestic Product, or GDP rose 1.7% compared with 2.6% in the prior quarter. France's Ministry of Ecology and Sustainable Planning and Development said in a report that housing starts declined 11.8% in the three-month period to July. This was slower compared to a 28.2% fall recorded in the three-month to June. Meanwhile, housing permits dipped at a faster pace of 16.6%, compared to a 15.3% decline seen during three-month period to June. Spain's National Statistics Institute lowered its gross domestic product, or GDP growth for 2007 to 3.7% from initially reported 3.8%. At the same time, the statistical office kept the growth figures for 2004, 2005 and 2006 unchanged. According to the statistical office, weak contribution of domestic demand led to a downward revision of growth. The Statistics Finland announced that the country's unemployment rate dropped to 5.2% in July from 6.8% recorded in June. The rate also eased from the 5.9% recorded in the previous year. Economists were looking for a jobless rate of 5.3% for July. The number of jobless stood at 144,000 in July, smaller than the 161,000 in previous year. Rest of Europe The British Bankers' Association said mortgages approved for house purchase continued to be low in July, indicating that the housing market is unlikely to start recovering in the near term. The number of mortgages approved in the UK for house purchases rose to 22,448 in July from 22,369 in June. Approvals for house purchase fell 65% over the previous year. The Swiss UBS consumption indicator decreased significantly in July after recording a temporary increase in June. According to a report from the investment bank UBS, the consumption indicator fell to 1.85 in July, marking the largest correction seen during a single month for just under a year. The indicator fell from 2.22 in June, revised from 2.25 reported earlier. At its current level, the UBS consumption indicator signals that Swiss consumer spending remains healthy, though the outlook is deteriorating. UBS expects real private consumption to grow 1.8% in 2008. However, the UBS said the recent hike in inflation coupled with the economic downturn tarnished this outlook. Denmark's finance ministry lowered its economic growth outlook for 2008 and 2009, citing higher commodity prices fueling inflationary pressures. The ministry projects the economy to grow 1.1% in 2008, down from 1.2% estimated in May. The economic growth is forecast to decrease to 0.5% in 2009, revised from 0.7% initially predicted. At the same time, the government hiked inflation forecast for the current year to 3.5% from 3.3% due mainly to higher prices for energy and food. However, the rate of inflation is expected to slow to 2.7% in 2009. Inflation outlook for 2009 was raised from an earlier prediction of 2.6%. The Statistics Sweden reported that the Producer Price Index or PPI rose 3.3% year-on-year in July, quicker than the 3% rise recorded in June. Economists expected the rate to remain unchanged at 3% for July. On a monthly basis, producer prices rose 0.7% in July, following a monthly growth of 0.5% in June. The consensus forecast was for a monthly increase of 0.4%. The Central Statistical Office announced that the Poland's unemployment rate dropped to 9.4% in July from 9.6% recorded in prior month. A year ago, the rate was 12.1%. The jobless rate declined for the sixth month in a row, falling from 11.7% in January. The jobless number stood at 1.42 million persons, down from 1.46 million recorded in June. The jobless number fell 32,400 from June. The statistical office also reported that Poland's retail sales rose 14.3% year-on-year in July, a notch higher than the 14.2% rise recorded in June. Economists had expected the growth to decline to 14% for July. Month-on-month, overall retail sales increased 1.8% in July versus 2.4% rise seen in the previous month. The rate stood well below the 2.1% rise expected by the economists. In a widely expected move, the National Bank of Slovakia maintained its two-week repo tender limit rate at 4.25%. The central bank also retained its overnight sterilization rate at 2.25% and the overnight refinancing rate at 5.75%. This is for the 16th consecutive month the central bank is holding its rates. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Consumer Confidence Index Jumps To 56.9 In August

Consumer confidence increased by much more than anticipated in the month of August, according to a report released by the Conference Board on Tuesday, with the improvement reflecting a notable increase in confidence in the outlook for the next six months.

The Conference Board said its consumer confidence index jumped to 56.9 in August from an unrevised 51.9 in July. The increase came in well above the expectations of economists, who had expected the index to edge up to 53.0. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Dollar erases early gains versus loonie as oil rebounds

The dollar fell sharply versus the loonie Tuesday morning in New York, moving well off its early highs after the price of oil jumped back above $115. The dollar slipped to 1.0486 from an early high of 1.0560.

With the mid-morning plunge, the dollar moved back toward last Friday's multi-week low of 1.0420. The dollar eased across the board following the release of the latest S&P/Case Shiller Home Price Index for June, which showed that nationwide home prices dropped 15.4 percent in June. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

U.S. S&P/Case-Shiller Home Price Index Drops 15.9% in July Yr-on-Yr

Slovak Central Bank Holds Rates at 4.25% Ahead of Euro Adoption in January 2009

(CEP News) - As expected, the Slovakian Central Bank held its benchmark interest rate unchanged at 4.25% on Tuesday, in line with the European Central Bank's main refinancing rate and ahead of Slovakia's adoption of the euro on Jan. 1, 2009. The moves comes as the country experiences an annual 4.8% inflation rate - 4.4% when harmonized with the euro zone - and a preliminary 7.6% annual growth rate in Q2 2008. Should the European Central Bank continue to hold rates as expected by both markets and economists, it is unlikely the Slovak Central Bank will deviate from the ECB until its adoption of the euro. By Erik Kevin Franco, This email address is being protected from spam bots, you need Javascript enabled to view it, edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it CEP Newswires - CEP News © 2008. All Rights Reserved.

Euro Breaks 1.4600 After German IFO Disappointment, Will U.S. Data Keep Dollar Rally Going?

Previous Articles

• Aug 26 - Euro Breaks 1.4600 After German IFO Disappointment, Will U.S. Data Keep Dollar Rally Going?
  
• Aug 26 - Euro Open: German Economy to Shrink, Threatening Recession
  
• Aug 25 - British Pound Speculative Shorts (COT) Highest on Record
  
• Aug 25 - Forex Forecast: 5 Key Events for the Market This Week 08-25-08
  
• Aug 22 - Forex Trading Weekly Forecast - 08.25.08
  
• Aug 22 - British Pound Vulnerable to Sharp Pullback Next Week
  
• Aug 22 - Pound Plummets As Growth Stalls, Euro Follows Suit
  
• Aug 22 - Euro Open: UK Gross Domestic Product to Print at 15-Year Low
  
• Aug 21 - Forex Emerging Markets Weekly - August 21, 2008
  
• Aug 21 - Forex Trading Forecast: US Dollar to Weaken Before Further Rallies
  
• Aug 21 - Euro Open: Will Switzerland Follow the EU into Recession?
  
• Aug 21 - Pound Reverses Despite U.K. Retail Sales Rebound, Euro Heavy As PMI Remains In Contraction
  
• Aug 20 - Can Chinese Demand Keep Japan Out of Recession?
  
• Aug 20 - Dollar May Drop Without Action From The Fed
  
• Aug 20 - Australian Dollar Could Fall Like a Rock
  
• Aug 20 - BoE Voted 7-1-1 to Leave Rates Unchanged, Besley Votes For Hike.
  
• Aug 20 - Euro Open: Is The Bank of England Closer to Cutting Interest Rates?
  
• Aug 19 - Forex Seasonality Update: We Forecast USDCAD Declines
  
• Aug 19 - Euro Falls As German ZEW Shows Current Conditions Worsening
  
• Aug 19 - A Drop in U.S. Housing Starts Would Validate EURUSD Technical Outlook
  

Written by John Rivera, Currency Analyst

The Euro broke below 1.4600 after the German IFO Survey fell to a three year low. German business confidence fell to 94.8 from 97.5 in July and far below the expected 97.2. The EURUSD was already trading heavy having fallen over 100 points in Asian trading ahead of the German GDP report which showed the country's economy contracted 0.5% in the second quarter.

Talking Points   
•    Japanese Yen: Back Above 109.80
•    Swiss Franc: Consumption Lowest In  Almost A Year
•    Euro:  German Growth Contracts As Business Confidence Falls To 3 Year Low
•    British Pound: Falls On Declining European Outlook
•    US Dollar: Housing Data and U.S. Consumer Confidence On Tap

Euro Breaks 1.4600 After German IFO Disappointment, Will U.S. Data Keep Dollar Rally Going? .

The Euro broke below 1.4600 after the German IFO Survey fell to a three year low. German business confidence fell to 94.8 from 97.5 in July and far below the expected 97.2. The EURUSD was already trading heavy have fallen over 100 points in Asian trading ahead of the German GDP report which showed the country's economy contracted 0.5% in the second quarter. The outlook for Europe's largest economy is now expected to continue to decline in 3Q, which was evident by the fall in the expectations component of the IFO indicator to 87.0 from 90.0, which was the lowest since February, 1993. Additionally, consumer confidence in the country fell to 1.5, the lowest in five years, declining the prospects of domestic growth.

The German economy shrinking for the first time in four years may be a clear sign for the ECB, that a more accommodative monetary policy is needed to prevent the region from falling into a recession. German efficiency and emerging market demand helped it withstand the head winds from the U.S. longer than expected, but the subprime crisis's impact on global growth has finally taken its toll. The central bank's decision to raise credit costs in July has only accelerated the decline and may have brought the region to the brink of a recession, as German growth has masked weakness in other European leaders like Spain and Italy.

The Pound fell to a 25 month low of 1.8368 on the German news, as its prospects for growth declined with its major trading partner's economy heading for a recession. The outlook for the U.K. economy has become bleaker as it is contending with a housing slump in addition to slowing global growth. Although the BBA report showed home loans increasing to 22,448, it was a minor improvement from the lowest on record reading of 22,369 in July. Despite inflation well above their 3% threshold at 4.4%, the BoE may be forced to consider a rate reduction by year's end as export demand and domestic growth continue to slow. 
 
The U.S. calendar is full of releases today with housing, manufacturing and sentiment data on tap. The S&P Case/Schiller housing report is expected to show that home prices fell another 16.2% in June, which is expected to cause new home sales to decline another 0.9%. Although yesterday's existing home sales report showed a rebound, the gain was mainly due to foreclosure, short sales and price reductions, signaling the housing woes are far from over. Nevertheless, as the European and Asian economies continue to slow, the U.S. economy has become increasingly more attractive for investors which should continue to contribute to the dollar's recent strength. An expected improvement in the U.S. consumer confidence report and the Richmond Fed Manufacturing Index will also add bullish sentiment.

Euro Plummets To Fresh Multi-month Lows Against Dollar and yen

During early deals on Tuesday, the Euro plunged to new multi-month lows against the US dollar and the Japanese yen on disappointing economic reports released from German economy today.

The euro also declined to multi-day lows against the British pound and the Swiss franc. German business confidence declined to 94.8 in August from 97.5 in July, the Munich-based Ifo research institute showed. Economists had expected the index to fall to 97.2. The index that measures current situation in the largest Eurozone economy fell to 103.2. The indicator stood below July's revised 105.6 and 104.5 expected by economists. Further, the expectations index came in at 87 in August, below the expected reading of 90.5. German consumer confidence for September dropped to 1.5 points from August's revised 1.9 points, a monthly survey from the GfK Group revealed. The indicator last marked a comparable reading in summer 2003. The index stood below the expected reading of 1.9% for September. The German economy contracted 0.5% sequentially in the second quarter, after expanding 1.3% in the first quarter, a detailed report from the Federal Statistical Office showed. The economy shrank for the first time in almost four years. On a yearly basis, the economic growth stood at 3.1%, faster than the 1.8% growth in the first quarter. The German economy shrinking for the first time in four years may be a clear sign for the ECB, that a more accommodative monetary policy is needed to prevent the region from falling into a recession. The European Central Bank left its interest rates unchanged at 4.25% on August 7. The central bank had maintained the rate at a six-year high of 4% since June last year, before hiking it last month over inflation concerns. The interest rate on the marginal lending facility was held at 5.25%, while the interest rate on the deposit facility was retained at 3.25%. Citing prevailing downside risks to growth, Trichet said in his post-ECB-decision press conference that current information has underlined the reasons for the 25 basis point hike delivered in July. During his speech, Trichet added that inflation would remain at high levels for a protracted period of time. With regard to the future direction of interest rates, Trichet reiterated that policymakers had no bias and never pre commit. He asserted that policymakers would do what is needed to fight inflationary pressures. He expressed "very strong concern" over price and wage-setting behavior in the 15-nation economy. The European currency declined to a new multi-month low of 1.4586 against the US dollar during early deals on Tuesday. If the euro-dollar pair weakens further, it may test support around the 1.444 level. The pair closed Monday's trading at 1.4755. The euro reversed direction against the dollar after hitting a record low of 1.6040 on July 15. The euro extended its downtrend in early August and rose beyond the 1.50 level on August 10 for the first time since late February. Since then, the euro has depreciated 9% against the dollar. In early trading on Tuesday, the European currency touched a 3 1/2 month low of 160.07 against the Japanese yen, compared to Monday's closing value of 161.29. The next downside target level for the euro is seen around 158.6 against the yen. The yen strengthened today as the weakness in stocks prompted investors to sell higher-yielding assets funded in Japan. The euro-yen pair has been in a downward channel since July 23 when it reached a record high of 170.00. Since July 23, the euro has lost around 6% against the yen. In economic news from Japan, the corporate service price index climbed 1.3 percent on year in July the Bank of Japan said today. That came in slightly below analyst expectations that were looking for an increase of 1.4 percent on year, and it was up from the 1.2 percent annual increase in June. The data also represented the 24th straight month of increase for the index. On month, the index eased 0.1 percent. The euro-pound pair fell to a 4-day low of 0.7941 by about 4:05 am ET Tuesday and this may be compared to yesterday's close of 0.7965. On the downside, the euro-pound pair is likely to target the 0.785 level. The pound gained as the number of mortgages approved in the UK for house purchases rose to 22,448 in July from 22,369 in June, the British Bankers' Association, or BBA, announced today. However, mortgage approvals recorded a decline of 65% on an annual basis. Approvals for re-mortgaging dropped around 21% from the prior year to 54,232 in July. The euro gained around 9% against the pound earlier this year to hit a record high of 0.8101 on April 16. Thereafter, the euro-pound pair weakened but rebounded in early May, and since then the pair has been moving between 0.784 and 0.804. Against the Swiss franc, the euro slumped to a 5-day low during early trading on Tuesday. At about 4:05 am ET, the pair reached 1.6153, down from yesterday's New York session close of 1.6172. If the euro-franc pair slips further, 1.610 is seen as the next target level. The Swiss UBS consumption indicator decreased significantly in July falling to 1.85, marking the largest correction seen during a single month for just under a year. The indicator fell from 2.22 in June, revised from 2.25 reported earlier. Further, the UBS said the July reading fell below the average for the past 12 months though the indicator showed a decreasing trend since February. Investors now look forward to the New York session, in which the US consumer confidence, Richmond Fed manufacturing index and the new home sales report are expected to influence trading. At 2:00 pm ET, the Federal Reserve is scheduled to release the minutes of its August 5th meeting. As expected, the Fed left the fed funds target rate unchanged at 2% at its August meeting. Dallas Fed President Richard Fisher cast the only dissenting vote against the decision to pause. The post-meeting policy statement relayed a balanced outlook on growth and inflation, but it did not provide much clarity on the future rate outlook. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Euro Slumps To Fresh Multi-month Low Against Dollar

The Euro trended lower against the dollar during early deals on Tuesday and hit a new multi-month low of 1.4598 at 4:05 am ET. If the euro-dollar pair weakens further, it may test support around the 1.444 level. The pair closed Monday's trading at 1.4755.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Canadian dollar hits new multi-month high against euro

Against the European single currency, the Canadian dollar staged a sharp rise at about 4:00 am Eastern Time Tuesday. The loonie reached a new multi-month high of 1.5389 against the euro, compared to 1.5515 hit late New York Monday.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Euro mixed against majors amid German GDP data

The German Q2 GDP data was released at 2:00 am ET. Amid the release, the euro showed weakness against the dollar, the pound and the yen but was higher versus franc. At about 2:05 am ET, the euro traded at 1.4688 against the dollar and 0.7966 against the pound. Against the yen and the franc, the euro was worth 161.10 and 1.6164, respectively.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

German Q2 GDP Expected To Match Flash Estimate

Tuesday, Germany's Federal Statistical Office is slated to release the detailed national accounts report for the second quarter at 2.00 am ET.

According to the preliminary report released on August 14, the German economic growth had fallen a seasonally and calendar-adjusted 0.5% in the second quarter from the prior quarter. The last time the German economy recorded a decrease was in the third quarter of 2004. At the same time, the statistical office had revised the first quarter GDP sequential growth to 1.3% from an initial estimate of 1.5%.

Further, the preliminary report had shown that the GDP growth on a yearly basis eased to 3.1% in the second quarter from 1.8% in the first quarter. At the same time, the calendar adjusted GDP rose 1.7% compared with 2.6% in the prior quarter.

Economists are expecting the German GDP figures to match preliminary estimates. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Euro Open: German Economy to Shrink, Threatening Recession

The Euro reversed US session gains overnight, falling to challenge the 1.47 level, while the British Pound dipped below 1.85 once again. A busy calendar awaits in the forthcoming European session. Most notably, Germany's economy is expected to shrink in the second quarter, putting the metric at the worst in three years and taking the Euro Zone's biggest economy within 3 months of recession.

South korean won drops to new multi-week low against Japanese yen

The South Korean won showed weakness against its Japanese counterpart during early deals on Tuesday. At about 10:50 pm Eastern Time, the won declined to a new multi-week low of 9.9275, compared to 9.8545 hit late New York Monday.

The yen-won pair is currently trading at 9.9215. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

House Prices Still Falling, Says Lehman Brothers

The S&P Case-Shiller June report will contain Q2 home prices for the 10- and 20-city composites as well as a national index. The composite measures are released on a monthly basis, but since the data are calculated using a three-month average, the June index represents the average for Q2.

Home price depreciation likely accelerated on a y-o-y basis but slowed on a q-o-q basis relative to Q1, note the analysts at Lehman Brothers. We expect the national composite to decline 14.5 percent q-o-q annualized, considerably slower than the 26.9 percent decline in Q1. This should translate to a 16.4 percent decline on a y-o-y basis. We expect the 20-city composite to fall 16.3 percent y-o-y or 12.4 percent q-o-q annualized and the 10-city composite to fall 16.5 percent y-o-y or 14.7 percent q-o-q annualized. We advise some caution when interpreting the quarterly pattern since the data are not seasonally adjusted and typically homes are priced higher in the spring. Our forecast for Q2 home prices would bring national prices down 19 percent from the peak in summer 2006 and back to mid-2004 levels. We judge it likely that home prices still have further to fall, likely not finding a bottom until the end of next year. We expect between a 25 percent and 30 percent peak-to-trough decline in national home prices. The Office of Federal Housing Enterprise Oversight (OFHEO) will release its home price measures for Q2. The data are based on homes with conforming mortgages, thereby largely excluding the jumbo and subprime markets. As such, OFHEO home prices have witnessed a much smaller decline than other measures, such as S&P Case-Shiller, National Association of Realtors or Radar Logic. We expect the all-transactions index, which includes data from home sales and appraisals for refinancing, to decline 0.5 percent q-o-q which would turn the y-o-y rate slightly negative. The seasonally adjusted purchase-only index is likely to fall 2.1 percent q-o-q or 5.6 percent y-o-y. In addition to the national aggregates, OFHEO releases home prices at the state and MSA level. We expect new home sales to fall about 2 percent to 520,000 in July. Builders have reported feeble demand with a record low print on the NAHB buyer traffic index. Mortgage rates have increased over the past few months and, according to the latest Federal Reserve Senior Loan Officer Survey, banks have continued to tighten lending standards for virtually all types of mortgages. Home sales have already fallen 62 percent from the peak and are at the lowest level since 1991. In response to weak demand, builders have pared back aggressively, successfully reducing inventory. Inventory of homes for sale have fallen 22 percent from the peak last spring, but are still too high relative to the dismal sales pace. We expect consumer confidence to improve slightly to 55 in August from 51.9 in July. While economic conditions are still bleak, with rising unemployment and falling home values, the drop in energy prices should provide some comfort to consumers. Other more timely measures of consumer confidence, such as the University of Michigan sentiment and IBD/TIPP index, have ticked higher in August. Attention will be on the conference board's measure on labor conditions which should show that jobs are becoming increasingly difficult to find. The statement from the 5 August FOMC meeting gave a balanced assessment of conditions with no indication of the potential future path of policy. Moreover, only one member, Dallas Fed president Fisher, dissented. The FOMC minutes should provide some insight into whether the revisions to the statement and the fewer-than-expected dissents reflect a new-found consensus or an uneasy compromise - and thereby some possible insight into the likely path of policy over the next few quarters. There are two possible ways a consensus may have arisen among the FOMC members in early August. One would involve some of the more hawkish voting members (specifically Philadelphia Fed president Plosser and Minneapolis Fed president Stern) conceding to the majority's more balanced view, in light of both the relative worsening in the growth outlook and the marginal improvement in inflation expectation measures since the June meeting. In this case, we expect that the near-term balanced set of risks is likely to give way to a preference for easing should the labor market worsen more quickly than the committee currently projects (as we forecast), or additional dislocations occur in financial markets. We view this case as most likely. A second possible way a consensus could have arisen would be if the majority shifted in a slightly more hawkish direction, implicitly conceding a bias towards hikes to insure against high headline inflation becoming embedded in expectations. Subsequent recent speeches by several of the more hawkish committee members, however, suggest a general acceptance of the view that inflation should soon peak and then decline, which would eliminate most of the rationale for rate hikes in the near future. Alternatively, neither might budge, and the statement would then be revealed as an uneasy compromise in an extremely uncertain economic environment. This scenario carries with it a greater chance of (multiple) future dissents, but also would mean that the majority view of roughly balanced risks should dominate the next several policy decisions. In our opinion, the majority has no desire to raise rates for the foreseeable future, barring a significant (but unlikely) deterioration of the projected inflation outlook. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Philippines June Trade Deficit $791 Million

The Philippines posted a trade deficit of $791 million for June, according to information released Tuesday. The government said imports to the Philippines increased 12.7 percent from one year earlier. Imports of electronics parts, assembled into finished products for export, fell 20.3 percent on year in June.

The decrease for May was revised to 15.5 percent. The government said lower purchases of electronics parts were offset by the rising costs of imported fertilizer, rice and fuel. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Claymore Launches First Shipping ETF (SEA)

First ETF to Provide Investors Access to 30 Companies in Fast Growing Shipping Sector

LISLE, Ill., Aug 25, 2008 (BUSINESS WIRE) -- Claymore Securities, Inc., the third-fastest growing exchange-traded fund provider in 2007*, today announced the launch of the Claymore/Delta Global Shipping Index ETF (NYSE Arca: SEA) on NYSE Arca. SEA is the first shipping ETF that provides investors with a cost-efficient means of accessing the rapidly growing global shipping sector.

"Maritime shipping is the primary means of international transportation for raw materials and finished goods, and we are pleased to be the first ETF provider to offer investors access to a global portfolio of 30 maritime shipping stocks with a current combined market cap near $50 billion," said Christian Magoon, President of Claymore Securities, Inc. "As the latest in our series of industry firsts, SEA exemplifies the innovation Claymore strives to deliver to the marketplace."

The ETF will seek to replicate the Delta Global Shipping Index (Index Ticker: DGAGSI), which was developed and is maintained by Delta Global Indices, LLC, a wholly-owned subsidiary of Delta Global Advisors, Inc. The Delta Global Shipping Index includes companies that derive at least 80% of their revenues from the seaborne transport of goods or the operating and/or leasing of ships. Additionally, constituents must have market capitalizations of at least $250 million and a 30-day average daily trading volume of at least $2 million.

"The maritime shipping industry has been growing exponentially thanks to increased participation in global trade by emerging economies like China, India and Brazil," said Chip Hanlon, Chairman and Chief Executive Officer of Delta Global Indices, LLC. "With approximately 80% of all shipments being transported by water, the increase in demand has pushed shipping activity up considerably and gained significant interest among investors."

SEA is listed on NYSE Arca and trades the same way as shares of a publicly traded company. SEA and other Claymore ETFs can be purchased through most brokerage accounts. They can be bought and sold throughout the day on NYSE Arca or the American Stock Exchange, depending on the ETF listing, during normal trading hours. The Fund issues and redeems Shares at NAV only in large blocks of 80,000 of Shares (each block of Shares called a "Creation Unit") or multiples thereof. Only broker-dealers or large institutional investors with creation and redemption agreements and called Authorized Participants ("APs") can purchase or redeem these Creation Units.

*Source: Claymore Securities, Inc., Bloomberg 2007 ETF data