Economic Data

Analysis
Weekly Outlook – Dec 13th – Dec 18th, 2010

A Comprehensive Report on Major Economic Indicators

Major Economic Events Next Week

Monday (13th Dec) Tuesday (14th Dec) Wednesday (15th Dec)

EC – Industrial Production M/M US – FOMC Rate Decision

Oct - Survey: 1.30%, Prior: -0.80% Survey: 0.25%, Prior: 0.25%

US – Advance Retail Sales US – Industrial Production M/M

Nov - Survey: 0.60%, Prior: 1.20% Nov - Survey: 0.30%, Prior: 0.00%

US – Empire Manufacturing
Dec - Survey: 5, Prior: -11.14

Thursday (16th Dec) Friday (17th Dec)

US – Housing Starts EC – Trade Balance

Nov - Survey: 550K, Prior: 519K Oct - Survey: €2.5B, Prior: €2.9B

US – Building Permits
Nov - Survey: 560K, Prior: 552K

US – Philadelphia Fed Index

Dec - Survey: 14.5, Prior: 22.5

1
Economic Data
Analysis
Weekly Outlook – Dec 13th – Dec 18th, 2010

A Comprehensive Report on Major Economic Indicators

The Dollar Index

The dollar index fluctuated with some Figure 1: The Dollar Index and Euro – Weekly Chart
losses initially during the week with later
90.00 1.6000
recovering towards closing of the week. 88.00 1.5500
1.5000
The greenback settled the week with 86.00
1.4500
0.92% gains against the world’s six 84.00 1.4000

major currencies. Reports showed that 82.00 1.3500

80.00 1.3000
jobless claims fell which gave some 1.2500
78.00
confidence to the job market. Moreover, 1.2000
76.00 1.1500
European debt woes worsened further 74.00 1.1000
1-Jan-10 1-Mar-10 1-May-10 1-Jul-10 1-Sep-10 1-Nov-10
after Fitch downgraded Ireland’s credit
rating which pushed investors towards Dollar Index (LHS) EUR/USD (RHS)

the greenback’s perceived safety. Source: Bloomberg & KCTL Research

The upcoming week will see a host of data releases from the U.S. and other economies. Most of the U.S.
economic indicators are carrying positive data expectations which may help the dollar extend its gains. In
crucial data releases, retail sales, industrial production and housing starts along with building permits may
boost market confidence. Empire manufacturing index is also expected to improve from the previous month.
Moreover, Europe’ PMI numbers and German’s IFO survey are also likely to provide grim picture of the
Europe’s economy. Another key event will be FOMC meeting, which meets this week to discuss its monetary
policy. Fed Chairman Bernanke has given some hints earlier last week to expand its balance sheet further, in
addition to recently announced $600 billion bond purchase programme. This remark came after reports
showed that U.S. unemployment rate heightened to 9.8% in November. If quantitative easing is done further,
the dollar may see some gains paring. Overall, the dollar’s outlook looks positive. Actual data releases and
FOMC monetary policy meet will provide further direction to markets.

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Economic Data
Analysis
Weekly Outlook – Dec 13th – Dec 18th, 2010

A Comprehensive Report on Major Economic Indicators

Important Economic Indicators

Dec 14th (15:30) EC – Industrial Production s.a. M/M (Oct) Survey: 1.30%, Prior: -0.80%

This measures the change in the total inflation-adjusted value of output produced by manufacturers,
mines, and utilities. It's a leading indicator of economic health - production reacts quickly to ups and
downs in the business cycle and is correlated with consumer conditions such as employment levels and
earnings. Rising industrial production can be seen as positive for the euro.

Dec 14th (19:00) US – Advance Retail Sales (Nov) Survey: 0.60%, Prior: 1.20%

This measures the change in the total value of sales at the retail level. This is the earliest and broadest
look at vital consumer spending data. It's the primary gauge of consumer spending, which accounts for
the majority of overall economic activity. Any increase in this indicator contributes to the overall
economic expansion and thus, is positive for the USD.

Dec 15th (19:00) US – Empire Manufacturing Index (Dec) Survey: 5, Prior: -11.14

It's a leading indicator of economic health - businesses react quickly to market conditions, and changes in
their sentiment can be an early signal of future economic activity such as spending, hiring, and
investments. Above 0.0 indicates improving conditions, below indicates worsening conditions. The
indicator is expected to improve in December month which can be seen as positive for the USD.

Dec 16th (19:00) US – Housing Starts (Nov) Survey: 550K, Prior: 519K

Dec 16th (19:00) US – Building Permits (Nov) Survey: 560K, Prior: 552K

Housing starts is the annualized number of new residential buildings that began construction while
building permits point to annualized number of new residential building permits issued during the
period. Building permit is an excellent gauge of future construction activity because obtaining a permit is
among the first steps in constructing a new building. Therefore, housing start is slightly overshadowed by
building permits. However, an increase in both the indicators will produce wide effects on other
industries as well and be seen as positive for the USD.

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Economic Data
Analysis
Weekly Outlook – Dec 13th – Dec 18th, 2010

A Comprehensive Report on Major Economic Indicators

Economic Calendar

Date Time Country Event Month Survey Prior Impact

12/14/2010 15:00 UK CPI (MoM) NOV 0.30% 0.30% Marginally Negative

12/14/2010 15:30 EC Euro-Zone Ind. Prod. sa (MoM) OCT 1.30% -0.80% Positive
12/14/2010 15:30 GE Zew Survey (Current Situation) DEC 84.5 81.5 Positive
12/14/2010 15:30 EC ZEW Survey (Econ. Sentiment) DEC 10.5 13.8 Negative
12/14/2010 15:30 GE ZEW Survey (Econ. Sentiment) DEC 3.9 1.8 Positive
12/14/2010 19:00 US Advance Retail Sales NOV 0.60% 1.20% Marginally Positive
12/14/2010 19:00 US Producer Price Index (MoM) NOV 0.60% 0.40% Marginally Positive
12/14/2010 20:30 US Business Inventories OCT 1.00% 0.90% Marginally Positive
12/15/2010 00:45 US FOMC Rate Decision 14-Dec 0.25% 0.25% Neutral
12/15/2010 19:00 US Consumer Price Index (MoM) NOV 0.20% 0.20% Marginally Positive
12/15/2010 19:00 US Empire Manufacturing DEC 5 -11.14 Positive
12/15/2010 19:30 US Total Net TIC Flows OCT -- $81.7B **********
12/15/2010 19:30 US Net Long-term TIC Flows OCT -- $81.0B **********
12/15/2010 19:45 US Industrial Production NOV 0.30% 0.00% Positive
12/15/2010 19:45 US Capacity Utilization NOV 75.00% 74.80% Marginally Positive
12/15/2010 20:30 US NAHB Housing Market Index DEC 16 16 Neutral
12/16/2010 12:00 IN India REPO Cutoff Yld 16-Dec 6.25% 6.25% Neutral
12/16/2010 12:00 IN Cash Reserve Ratio 16-Dec 6.00% 6.00% Neutral
12/16/2010 12:00 IN Reverse Repo Rate 16-Dec 5.25% 5.25% Neutral
12/16/2010 14:00 GE PMI Manufacturing DEC A 58.2 58.1
12/16/2010 14:00 GE PMI Services DEC A 59.0 59.2
Marginally Negative
12/16/2010 14:30 EC PMI Composite DEC A 55.3 55.5
12/16/2010 14:30 EC PMI Manufacturing DEC A 55.2 55.3
12/16/2010 14:30 EC PMI Services DEC A 55.2 55.4
12/16/2010 15:30 EC Euro-Zone CPI (MoM) NOV 0.10% 0.40% Marginally Negative
12/16/2010 19:00 US Housing Starts NOV 550K 519K Positive
12/16/2010 19:00 US Housing Starts MOM% NOV 6.00% -11.70% Positive
12/16/2010 19:00 US Building Permits NOV 560K 552K Positive
12/16/2010 19:00 US Building Permits MOM% NOV 1.50% 0.90% Positive

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Economic Data
Analysis
Weekly Outlook – Dec 13th – Dec 18th, 2010

A Comprehensive Report on Major Economic Indicators

Date Time Country Event Month Survey Prior Impact

12/16/2010 19:00 US Current Account Balance 3Q -$126.0B -$123.3B Negative

12/16/2010 19:00 US Initial Jobless Claims 11-Dec 425K 421K Negative
12/16/2010 19:00 US Continuing Claims 4-Dec 4120K 4086K Negative
12/16/2010 20:30 US Philadelphia Fed. DEC 14.5 22.5 Negative
12/17/2010 14:30 GE IFO - Business Climate DEC 109 109.3
12/17/2010 14:30 GE IFO - Current Assessment DEC 112.5 112.3 Marginally Negative
12/17/2010 14:30 GE IFO - Expectations DEC 106 106.3
12/17/2010 15:30 EC Euro-Zone Trade Balance OCT 2.5B 2.9B Marginally Negative
12/17/2010 20:30 US Leading Indicators NOV 1.10% 0.50% Marginally Positive

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