Overall data this week will show US economy is not headed for recession – dollar and yen will rise, stocks and bond move sideways
Marla Guthrie
Oct. 7, 2007

The data this week will show that US economy is not headed for recession any time soon. The Fed initiative to cut the rates will come down and dollar will further recover.

As a matter of fact, Fed may have completed its rate cut imitative for the time being. The Bank of Japan can raise rates any time. ECB will increase liquidity and lower rates. The Bank of England and Australian Central bank will lower rates to tackle their faltering economies.

The bond market is already beaten up. Longer-term bonds will rise and stocks will fall. But for this weak both the markets can move sideways.

Analytic models show the following:
Univ of Michigan Confidence index will rise from 83.4 to 85.
Import Prices will increase from -0.3% to 0.8%
Trade Balance will stay steady at $-58.8B
PPI Ex-food & energy will remain the same at 0.2%
Producer Price Index with food & energy will rise 0.6% from a decline of -1.4% from previous month
Retail Sales will fall -0.2% from a rise of 0.3%
Retail Sales Ex-autos will fall -0.4% just like the previous month

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