FOREX TRADERS

[craddock]

Tomorrow's Economic Releases: US Consumer Confidence Expected To Soil Strong Dollar Sentiment
Monday, 26 June 2006 21:54:39 GMT

Written by DailyFX Research Team

US Conference Board Consumer Confidence (JUN) (14:00 GMT; 10:00 EST)

Consensus: 103.9
Previous: 103.2

Outlook: US Consumer Confidence, a household survey used to forecast economic activity in the next six months, is expected to rebound to 103.9 from May’s sharp decline. Economists see more optimism coming from stronger employment data and less volatile gasoline prices for this month’s survey. Consumer confidence will be critical as high interest rates, energy and commodity prices, a volatile stock market and fear over the health of the real estate sector continue to price risk into the dollar and US assets. Overall economic strength has allowed the labor market to remain strong amid high interest rates. This weighs on the precarious strength in the housing market, which accounts for much of the net wealth the Average American possesses. Should it continue to show signs of cooling, consumers will be less apt to take out home equity loans for leisurely spending, thus making for a significant deceleration in growth. The housing market is clearly slowing down, but data suggest that it is still fighting. This morning’s new home sales rose to 1,234K from last month’s 1180K as a decline to 1,145K was expected.

Previous: Consumer confidence in the world’s largest economy fell by the most since September as high energy costs and interest rates are sobering consumers on the economic outlook. May’s reading of 103.2 kept the indicator in good territory, however it was quite the fall from April’s four-year high of 109.8. The proportion of consumers who expect their incomes to rise in the next six months fell to the lowest in almost three years, while consumers that claim jobs are hard to find rose to 20.5 percent for a yearly high and those that expect better employment opportunities in the next six months fell to 14.6 percent from 15.4 percent. This could join the housing market as one of the markers that the rampant economic growth in the US last year will finally be restrained by less than ideal market conditions that have held the globe in its grip since September of last year.