Euro fell against the U.S. dollar in anticipation of tomorrow's publication of data on the volume of industrial production and GDP in the eurozone.

According to the median forecast of analysts industrial production in June will grow by 0.9%, whereas in the previous month figure fell by 0.3%. GDP in the second quarter is also likely to grow by 0.2%. Recall that at its last meeting this month, the European Central Bank left its key interest rate unchanged at 0.5%.

We also add that the dollar is rising on expectations that the U.S. data, which will be released this week will give the Fed reason to start reducing the asset purchase program faster.

Investors and analysts believe that the short-term prospects for the dollar are determined by output data, including retail sales on Tuesday - expected strong data.

Earlier this year, discussing the possibility of reducing the stimulus from the Fed propped up the dollar, but in the last week, the dollar was down due to lower expectations reduction of redemption of bonds by the Fed in September.

The yen fell against the dollar, although it has regained some lost ground. Note that this trend was accompanied by a release of the report on Japan's GDP. As shown by the data, which were presented by the Cabinet Office, in the past quarter gross domestic product grew by 2.6 percent year on year after expanding 3.8 percent in the previous quarter. The median estimate of economists, growth was up 3.6 percent. Nominal GDP growth, unadjusted for price changes, accelerated to 2.9 percent year on year.

In the second quarter, the growth was driven by private consumption, public investment and net exports, today's report showed. Consumer spending, which accounts for about 60 percent of the economy, rose 0.8 percent from the previous quarter. Deflator of gross domestic product, the broadest measure of prices throughout the economy, fell 0.3 percent in the period from April to June compared with a year earlier, the smallest decline since the third quarter of 2009. In June, prices rose 0.4 percent from a year earlier, this is the highest level since 2008.

In general, data from Japan can not be called negative: GDP growth in its third quarter in a row, although it is weaker than expected. We also add that the yen, which has traditionally been seen as a defensive asset in the period of market turmoil, could be supported if the Japanese stock market will continue to decline on weak economic data. On the other hand, follow consider the possibility of intervention of the Bank of Japan to further easing of monetary policy in the event of data weak data, and it can life negative for the yen.

European stocks closed little changed at a 10-week high as a rally in mining companies offset slower-than-forecast economic growth in Japan.

The Stoxx Europe 600 Index increased less than 0.1 percent to 306.08 at the close of trading, having earlier risen as much as 0.2 percent ad declined 0.6 percent. The benchmark gauge added 0.6 percent last week as better-than-forecast economic data in Europe and China outweighed concern that the Federal Reserve will reduce the pace of its bond-purchase program. The measure has rallied 9.4 percent this year.

Japan’s Topix lost 0.6 percent on a report that showed the nation’s economy expanded an annualized 2.6 percent in the second quarter, slowing from a revised 3.8 percent in the previous three months. The median forecast of economists surveyed by Bloomberg was for 3.6 percent growth.

Still, the German Economy Ministry is predicting that growth in the second quarter was about 0.75 percent, according to a person familiar with the forecast, who asked not to be identified because the projection is confidential. That exceeds the 0.6 percent median of economist estimates. The Federal Statistics Office will release the data on Wednesday.

Euro-area stocks have risen half as much as global benchmarks this year, leaving them cheaper than equities in the U.S. and Asia as the region’s economy starts to recover from the longest recession on record.

National benchmark indexes advanced in 10 of the 18 western European markets today.

FTSE 100 6,574.34 -9.05 -0.14% CAC 40 4,071.68 -4.87 -0.12% DAX 8,359.25 +20.94 +0.25%  

Fresnillo, the world’s biggest primary silver producer, rallied 6.6 percent to 1,103 pence, leading a gauge of mining shares to the best performance among 19 industry groups in the Stoxx 600. Randgold Resources Ltd. advanced 2.5 percent to 4,841 pence. Gold and silver climbed for a fourth day.

Prudential Earnings

Prudential, the U.K.’s biggest insurer by market value, rose 4.1 percent to 1,232 pence, the highest price since at least September 1988. Operating profit climbed to 1.42 billion pounds ($2.2 billion) in the first half from 1.16 billion pounds a year earlier. That beat the 1.3 billion-pound estimate of 17 analysts provided by the company.

Catlin Group Ltd. rose 1.1 percent to 495.4 pence as HSBC Holdings Plc raised the second-largest Lloyd’s of London insurer by market value to overweight from neutral, meaning investors should buy the shares.

Opap SA gained 4 percent to 7.49 euros after Emma Delta, a Cyprus-based fund, signed a contract to buy a 33 percent stake in the Greek gambling company.

Telekom Austria slid 1.6 percent to 5.63 euros. Second-quarter earnings before interest, taxes, depreciation and amortization fell to 330.3 million euros ($439 million) from 364.8 million euros a year earlier. That compared with the average 332.7 million-euro analyst estimate.

Deutsche Boerse AG lost 2.7 percent to 53.94 euros. Equinet Bank AG trimmed its rating on the operator of the Frankfurt stocks exchange to sell from hold, citing the risk of consensus earnings downgrades.

The price of oil fell slightly, partly due to the strengthening of the dollar, as well as correction after a significant increase at the end of last week (2.5% on Friday).

Not unimportant factor that contributed to lower prices, was the release of GDP data for Japan. According to estimates of the Cabinet Office, in the past quarter gross domestic product grew by 2.6 percent year on year after expanding 3.8 percent in the previous quarter. The median estimate of economists, growth was up 3.6 percent. Nominal GDP growth, unadjusted for price changes, accelerated to 2.9 percent year on year. In the second quarter, the growth was driven by private consumption, public investment and net exports. Consumer spending, which accounts for about 60 percent of the economy, rose 0.8 percent from the previous quarter.

Note that the Japanese authorities predict a slowdown in economic growth to 1% in 2014-2015 fingoda.

However, we add that positive data from China, are a factor of stabilization of prices below. The first is to provide a report on industrial production, which showed that in July, its volume increased by 9.7% (the highest since February). This suggests that China's demand for oil will increase further. Data on imports of China last week and included the growth of oil imports.

Traders said the market expects the U.S. economic data, including the July retail sales, due out on Tuesday. Note that they will be able to shed some light on how the policy will continue to be held by the Federal Reserve System.

Another important event of the week will also be a report on oil, which will be released on Wednesday.

The cost of the September futures on U.S. light crude oil WTI (Light Sweet Crude Oil) fell to 105.75 dollars a barrel on the New York Mercantile Exchange.

September futures price for North Sea Brent crude oil mixture rose to $ 108.25 a barrel on the London exchange ICE Futures Europe.

The cost of gold futures rose sharply, rising at the same time to the highest level in almost three weeks, despite the strengthening of the dollar against the background of technical buying.

In addition, it was reported that gold holdings in the largest gold exchange-traded fund in the world - Holdings in the SPDR Gold Trust rose on Friday by 0.2% to 911.13 tonnes, recording the first increase since June 10. Since the beginning of this year, the outflow of gold from the fund amounted to 14 million ounces, roughly equivalent to $ 19 billion at current prices.

Note that traders reported buying gold from those who agreed to sell in anticipation of lower prices in the future, while automatic buy orders that were placed near the important levels, have helped increase the growth of gold prices.

We also add that the precious metal has received support from Friday's data on wholesale inventories in the U.S., which unexpectedly fell in June, registering the second monthly decline in a row, prompting economists to cut growth estimates for the second quarter and increased speculation that the Federal Reserve may continue the action to stimulate the economy.

Market participants are now awaiting data on U.S. retail sales, which will be presented tomorrow, and will help to assess the timing of the program to purchase assets of the Fed.

The dynamics of today's trading statement also affected by the China Gold Association, who said that gold consumption in China has jumped to 706.36 tonnes in the first half of the year, compared to 832.18 million tons in 2012.

The cost of the October gold futures on COMEX today rose to $ 1340.40 per ounce.

EUR/USD $1.3100, $1.3300, $1.3375, $1.3400, $1.3445/50

USD/JPY Y96.00, Y97.10, Y97.15

GBP/USD $1.5450, $1.5600, $1.5615

GBP/JPY Y150.00

EUR/CHF Chf1.2275

AUD/USD $0.9100, $0.9150

USD/CAD C$1.0300, C$1.0380

New Zealand's house prices declined in July from a month earlier, a report from the Real Estate Institute of New Zealand showed Monday.

The national median house prices fell 2.3 percent month-on-month to NZ$385,000 in July. However, house prices increased 6.6 percent compared to July 2012.

The REINZ stratified housing price index, which adjusts for some of the variations in mix that can impact on the median price, was 8.6 percent higher than in July 2012 and fell 0.5 percent compared to June.

There were 6,777 unconditional residential sales in July, a 14.7 percent increase on July 2012 and an increase of 10.5 percent compared to June. This was the best result for the month of July in six years.

However, the market continued to experience a significant shortage of listings, the report said.

U.S. stock-index futures declined amid data showing Japan’s economic growth slowed last quarter.

Global Stocks:

Nikkei  13,519.43 -95.76 -0.70%

Hang Seng 22,271.28 +463.72 +2.13%

Shanghai Composite 2,101.28 +49.05 +2.39%

FTSE  6,559.7 -23.69 -0.36%

CAC 4,063 -13.55 -0.33%

DAX 8,305.95 -32.36 -0.39%

Crude oil $105.59 -0.36%

Gold $1328.60 +1.25%

Upgrades:

Downgrades:

Other:

Stifel raises its Cisco (CSCO) tgt to $30 from $28

Needham lowers its Apple (AAPL) tgt to $595 from $710

EUR/USD

Offers $1.3480/85, $1.3450, $1.3430/35, $1.3410/20, $1.3390/400, $1.3380, $1.3350/55, $1.3330/35

Bids $1.3285/75, $1.3235/30

GBP/USD

Offers  $1.5620/30, $1.5595/605, $1.5580, $1.5550/60

Bids $1.5455/50, $1.5440/25, $1.5405/00, $1.5390, $1.5375

AUD/USD

Offers $0.9315/20, $0.9300, $0.9250, $0.9229/25, $0.9185/90

Bids $0.9140/35, $0.9130/25, $0.9100, $0.9091/85, $0.9080, $0.9050

EUR/GBP

Offers stg0.8675, stg0.8665, stg0.8640/45, stg0.8620/30

Bids stg0.8580/75, stg0.8540, stg0.8500, stg0.8485/80

EUR/JPY

Offers Y129.80, Y129.50, Y129.15/20

Bids Y128.20, Y127.90, Y127.50, Y127.20, Y127.00

USD/JPY

Offers Y98.00, Y97.45/50, Y97.15/20, Y96.90/00

Bids Y96.40/35, Y96.20, Y95.95/90, Y95.80, Y95.50, Y95.00

Switzerland's retail sales turnover increased for the third consecutive month in June, provisional results from the Federal Statistical Office showed Monday.

Real turnover grew 2.3 percent from a year ago, following May's 1.5 percent rise. Similarly, excluding fuel sales, overall turnover climbed at a faster pace of 2 percent after increasing 1.6 percent in May.

Sales of food, drinks and tobacco registered a 1.3 percent fall in turnover, while non-food sector logged an annual increase of 4 percent.

Month-on-month, real retail turnover gained 0.5 percent, offsetting the 0.3 percent drop in May. But turnover excluding fuel, advanced 0.3 percent, it said.

European stocks fell from a 10-week high as a report showed Japan’s economy grew less than forecast last quarter. U.S. index futures declined while Asian shares were little changed.

The German Economy Ministry is predicting that growth in the second quarter was about 0.75 percent, according to a person familiar with the forecast, who asked not to be identified because the projection is confidential. That exceeds the 0.6 percent median of 46 economist estimates compiled by Bloomberg. Germany’s Federal Statistics Office will release the data on Wednesday.

Euro-area stocks have risen half as much as global benchmarks this year, leaving them cheaper than equities in the U.S. and Asia as the region’s economy starts to recover from the longest recession on record.

Telekom Austria slid 2.8 percent to 5.57 euros. Second-quarter earnings before interest, taxes, depreciation and amortization fell to 330.3 million euros ($439 million) from 364.8 million euros a year earlier. That compared with the average 332.7 million-euro analyst estimate.

Ladbrokes declined 3.1 percent to 192.9 pence as JPMorgan Chase & Co. cut the stock to underweight from neutral, meaning investors should sell the shares. The brokerage cited the weak outlook for U.K. retail and limited revenue growth in an increasingly competitive online market.

Prudential, the U.K.’s biggest insurer by market value, rose 2.5 percent to 1,214 pence. Operating profit climbed to 1.42 billion pounds ($2.2 billion) in the first half from 1.16 billion pounds a year earlier. That beat the 1.3 billion-pound estimate of 17 analysts provided by the company.

FTSE 100 6,567.41 -15.98 -0.24%

CAC 40 4,059.8 -16.75 -0.41%

DAX 8,272.62 -65.69 -0.79%

Japan's gross domestic product added just 0.6 percent in the second quarter of 2013 compared to the previous three months, the Cabinet Office said in Monday's preliminary report.

The headline figure missed forecasts for an increase of 0.9 percent, which would have been unchanged from the first quarter.

On a yearly basis, GDP was up 2.6 percent - well shy of expectations for 3.6 percent following the 4.1 percent gain in Q1.

Nominal GDP was up 0.7 percent on quarter, also missing forecasts for an increase of 1.0 percent following the 0.6 percent gain in the previous quarter.

The GDP deflator was down 0.3 percent on year versus forecasts for a contraction of 0.7 percent after falling 1.1 percent in the three months prior.

Private consumption added an annual 0.8 percent, beating forecasts for 0.5 percent after rising 0.9 percent in the previous three months.

Capital expenditure fell 0.1 percent on year - well shy of expectations for a 0.7 percent increase after sliding 0.3 percent in Q1.

Upon the release of the data, Japan's Economics Minister Akira Amari told reporters that the numbers show Prime Minister Shinzo Abe's economic policies are slowly starting to have the desired effect of healing the economy.

Amari added that the government must continue to support business spending, which remains weaker than expected.

Also on Monday, the Bank of Japan said that an index measuring the prices of domestic corporate goods in Japan was up 0.5 percent in July compared to the previous month, standing at 102.1.

That beat forecasts for a gain of 0.2 percent following the 0.1 percent increase in June.

On a yearly basis, corporate goods prices were up 2.2 percent, beating expectations for 1.9 percent after climbing 1.2 percent in the previous month.

Export prices were down 0.1 percent on month and 1.5 percent on year, the data showed, while import prices fell 0.5 percent on month and 0.4 percent on year.

Japan's industrial production declined 3.1 percent in June from a month ago, final data from the Ministry of Economy, Trade and Industry showed Monday. The monthly rate was revised from the previous estimate of 3.3 percent decrease.

On a yearly basis, industrial output was down 4.6 percent in June.

According to final data, shipments dropped 3.2 percent, while inventories remained flat on month in June. The inventory ratio grew by 5.9 percent.

At the same time, the capacity utilization logged a month-on-month decrease of 2.3 percent, offsetting the 2.3 percent increase seen in May.

EUR/USD $1.3100, $1.3300, $1.3400, $1.3450

USD/JPY Y97.10, Y97.15

GBP/USD $1.5600, $1.5615

GBP/JPY Y150.00

EUR/CHF Chf1.2275

AUD/USD $0.9100, $0.9150

USD/CAD C$1.0380

Asian stocks outside Japan rose as Chinese property developers and commodities companies climbed. Japanese shares fell after growth in the world’s third-largest economy slowed more than forecast.

Nikkei 225 13,519.43 -95.76 -0.70%

Hang Seng 22,224.9 +417.34 +1.91%

S&P/ASX 200 5,108.65 +53.44 +1.06%

Shanghai Composite 2,101.28 +49.05 +2.39%

Raw-materials suppliers led gains on the regional equities index, with BHP Billiton Ltd., the world’s biggest miner, jumping 2.4 percent in Sydney.

China Resources Land Ltd., the second-largest mainland developer traded in Hong Kong, rose 2.5 percent amid speculation the government will relax a ban on companies raising funds through share sales.

Bridgestone Corp., Japan’s No. 1 tiremaker, advanced 2.8 percent after raising its full-year profit forecast.

02:00 New Zealand REINZ Housing Price Index, m/m July 0.0% -0.5%

04:30 Japan Industrial Production (MoM) (Finally) June -3.3% -3.1% -3.1%

04:30 Japan Industrial Production (YoY) (Finally) June -4.8% -4.8% -4.6%

The Dollar Index rose for a second day before U.S. data forecast to show retail sales rose a fourth consecutive month, adding to the case for the Federal Reserve to reduce stimulus which tends to debase the currency. Retail sales in the U.S. probably climbed 0.3 percent in July after a 0.4 percent advance in June, according to the median forecast of economists surveyed by Bloomberg News before Commerce Department figures tomorrow. The Fed is buying $85 billion of Treasuries and mortgage debt each month to put downward pressure on interest rates.

The yen swayed between gains and losses as investors speculated how slower-than-forecast economic growth in Japan would shape Prime Minister Shinzo Abe’s decision on whether to raise the sales tax. In Japan, GDP (JGDPAGDP) expanded an annualized 2.6 percent in the second quarter, compared with a revised 3.8 percent increase in the first, Cabinet Office data showed today. Economists surveyed by Bloomberg had forecast 3.6 percent growth.

The 17-nation euro rallied from the lowest in six weeks against the Japanese currency before reports which may show industrial production and gross domestic product in the currency bloc rebounded. Economists in a separate Bloomberg poll estimate a report tomorrow will show industrial output in the euro area grew 0.9 percent in June from the month before, when it fell 0.3 percent. The region’s GDP probably grew 0.2 percent in the second quarter from the previous three months, another survey showed before data due on Aug. 14. The European Central Bank left its benchmark interest rate unchanged this month at 0.5 percent.

EUR / USD: during the Asian session the pair fell to $1.3315

GBP / USD: during the Asian session the pair fell below $1.5500

USD / JPY: during the Asian session the pair rose to Y96.65

As policy makers and central bankers continue to enjoy the Summer sunshine, traders at their desks have a very limited calendar to focus on Monday. However, the data calendar picks up on both sides of the Atlantic as the week moves on. Early European data sees the release of the French June current account data at 0645GMT. At 0715GMT, Swiss June retail sales data will cross the wires. Economists are looking for a reading in line with May's 1.8% y/y increase.

02:00 New Zealand REINZ Housing Price Index, m/m July 0.0% -0.5%

04:30 Japan Industrial Production (MoM) (Finally) June -3.3% -3.1%

04:30 Japan Industrial Production (YoY) (Finally) June -4.8% -4.8%

06:00 Japan Prelim Machine Tool Orders, y/y July -12.4%

07:15 Switzerland Retail Sales Y/Y June +1.8% +1.9%

18:00 U.S. Federal budget July 116.5 -95.3

23:01 United Kingdom RICS House Price Balance July 21% 25%

23:50 Japan Core Machinery Orders June +10.5% -7.1%

23:50 Japan Core Machinery Orders, y/y June +16.5% +2.6%

23:50 Japan Monetary Policy Meeting Minutes