Week ending 24 July 2009: In a week nearly bereft of fundamental data, corporate earnings remain mixed, with some impressive blowouts contrasting with stunning disappointments. The combination is keeping currencies, equities, commodities, and bond markets scrambling amongst low summer volumes.

Australia’s 2Q2009 PPI printed −0.8% q/q, 2.1% y/y, and CPI 0.5% q/q, 1.5% y/y. July DEWR skilled vacancies fell −1.7% m/m. AUD/USD rose on Monday to resistance at 0.8160 and battled it for the remainder of the forex trading week. Friday New York closing found the pair unable to hold gains above 0.8200, ending at 0.8167 for a gain of 1.7%.

In the U.S., Fed Chairman Bernanke’s testimony before Congress was cautiously optimistic. The May house price index rose 0.9% m/m, the June leading indicators 0.7% m/m. June existing home sales rose 3.6% m/m. Initial unemployment claims for the week ending 18 July rose 554K, continuing claims for the week ending 11 July numbered 6225K; cynics are pointing out that jobless benefits last only six months at most and those who haven’t found work after that time are falling off the end of the scale, leading to a declining rate of continuing claims.

Eurozone July PMIs printed 46.0 manufacturing, 45.6 services, and 46.8 composite. May industrial new orders disappointed, falling −0.2% m/m, −30.1% y/y, and the May current account printed a deficit of €1.2Bn s.a., €13.0Bn n.s.a. In Germany, the Ifo improved to 87.3 business climate, 84.3 current assessment, and 90.4 expectations, while June PPI fell −0.1% m/m, −4.6% y/y. EUR/USD climbed into the upper portion of its current trading range, between 1.4135 and 1.4250, and EUR/AUD fell to close at 1.7400.

The U.K. 2Q2009 GDP contracted −0.8% q/q, more than twice estimates, and 5.6% y/y. June retail sales rose 1.2% m/m, 2.9% y/y, and the May index of services fell −1.0% 3mo/3mo. Interestingly, June M4 money supply contracted −0.2% m/m, declining to 14.2% y/y from 16.6% previous, raising questions regarding the quantitative easing programme currently underway. GBP/USD trended higher for the second consecutive week, closing at 1.6427. EUR/GBP despite several good runs higher and lower traded roughly flat for the week, closing at 0.8650.

The BoC left rates unchanged at 0.25%, as expected. May wholesale sales fell −0.3% m/m as retail sales rose 1.2% m/m, 0.7% ex-autos. USD/CAD trended lower for the second consecutive week, closing at 1.0825, and AUD/CAD dropped sharply beneath support at 0.8920, closing at 0.8839.

New Zealand’s April PMI services declined to 45.0 from 46.2 and June visitor arrivals dropped −3.8%. NZD/USD rose 1.8% but could not sustain gains above 0.6600, closing at 0.6556, and AUD/NZD traded through another flat week, closing at 1.2448.

Japan’s June merchandise trade balance printed the largest surplus since last September at ¥508.0Bn with both exports and imports improving on a y/y basis. May all-industry activity index rose 0.7%. Declining risk aversion and reduced desire for safe-haven protection saw the Japanese yen depreciate against all 16 of the most actively traded global currencies. USD/JPY could not force through resistance at 95.00 despite a strong attempt Thursday, closing at 94.74. EUR/JPY and AUD/JPY both gained for the second consecutive week, 1.4% and 2.3%, respectively, closing at 134.68 and 77.38.