8:30am (NY Time) US ADV GDP q/q Forecast 4.5% Previous 2.2%
ACTION: USD/JPY USD/CHF BUY 4.8% SELL 4.2%
Our main focus tomorrow will be on the fourth quarterly (Q4) release of U.S. Advanced GDP number. Analysts are split with their expectations on this release as it could go either way. We are looking for a minimum deviation of 0.3% on the forecasted figure of 4.5%. Therefore if we get a 4.8% on the advanced 4th quarter GDP, it would be US Dollar positive. We will BUY USD/JPY. However, if we get a 4.2% release, then we would be SELLING USD/JPY. With USD being regarded as safe-haven currency, if we get a worse than expected number, we might still see USD getting stronger as traders scramble to BUY US Treasuries, making USD stronger than most european currencies such as Euro and Sterling, especially in this risk aversion driven market.
This is a preview of US Advanced GDP q/q 01/29/10. Read More...
8:30am NY Time Canada GDP m/m Forecast 0.3% Previous 0.2%
ACTION: USD/CAD BUY 0.0% SELL 0.6%
We’ll be looking at the Canadian GDP release (m/m) today, and GDP is defined (by wikipedia) as “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.” As GDP is basically the measurement of the “economy” as a whole and it certainly has a strong impact on the cash rate of the CAD, it’ll be a highly anticipated news event… with that being said however, we’ll also have the USD quarterly advanced GDP release at the same time… The whole world will be focused on that release, therefore I’d definitely look at the US release first before jumping in any trades…
This is a preview of Canada GDP m/m 01/29/10. Read More...
RBNZ is once again expected to keep rates unchanged at the current level of 2.50% in this meeting, as unanimously agreed by all economists surveyed from different news companies. As a matter of fact, aside from the bullish statement during last RBNZ rate decision from Governor Bollard, there seems to be no other fundamental reasons supporting a rate hike for NZD in the near future.
This is a preview of New Zealand RBNZ Official Cash Rate 01/27/10. Read More...
FOMC is going to release its short-term interest rate decision for the first time in 2010 and mosts analysts agree that FOMC will keep current rates unchanged until Q3 or Q4 of this year, if not 2011. As the Federal Reserve may need more economic data to justify a surprise hike in the interest rate, this rate decision will probably go as expected (or unchanged).
This is a preview of US FOMC Federal Funds Rate Decision 01/27/10. Read More...
10:00am (NY Time) US New Home Sales Forecast 372K Previous 355K
ACTION: USD/JPY or USD/CHF BUY 440K SELL 300K
We’ll be looking to the the New Home Sales, which is expected at 372K; our tradable deviation is going to be 70K, so if the release is lower, it would strengthen risk aversion sentiment and we should look to SELL USD/JPY or possible the USD/CHF pair; if the number is higher, it would fuel risk appetite sentiment, we may see a rally in USD/JPY or USD/CHF.
This is a preview of US New Home Sales 01/27/10. Read More...
We’ll be lookign to trade the quarterly CPI release out of Australia. As reflected in recent RBA rate statements, Australia is facing rise in inflation, and this number could surprise to the upside. RBA hiked rates last few rate decisions, and with a surprise better than expected release, we could have justification for further rate hike.
This is a preview of Australia CPI q/q 01/26/10. Read More...
4:30am (NY Time) UK GDP q/q Forecast 0.4% Previous -0.2%
ACTION: (GBP/USD) BUY 0.7% SELL 0.0%
We’ll be trading the much anticipated UK Prelim GDP q/q for Q4 2009. As we know, GDP is defined as “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.” GDP is the basically direct measure of the economy’s health, and a stronger GDP means that the central bank will more likely to raise interest to curb inflation.
This is a preview of UK Prelim GDP q/q 01/26/10. Read More...
10:00am NY Time US Existing Home Sales Forecast 5.95M Previous 6.54M
ACTION: USD/JPY BUY 6.35M SELL 5.55M
We’ll be trading the Existing Home Sales, and since Housing news is one of the more important news event out of the US, this news release will certainly cause some volatility especially if our tradable figures were hit. It is important to consider that if we get a better than expected release, USD could suffer somewhat from risk appetite sentiment as signs of housing recovery translate into equity gains; however, a worse release may boost USD demand as investors seek safe-haven shelter in U.S. Treasury. But the reaction of USD may be different against other pairs… for instance, a better release should be bearish for EUR/USD; a worse than expected release will be bad for USD/JPY…
This is a preview of US Existing Home Sales 01/25/10. Read More...
8:30am NY Time Canada Core Retail Sales Forecast 0.3% Previous 0.2%
ACTION: USD/CAD BUY -0.3% SELL 0.9%
We’ll be focusing on Core Retail Sales release from Canada and not the headline release; the core release as a forecast expectation of 0.3% with a previous release at 0.2%. Core Retail Sales release is a month on month release, and it’s a measurement of the activities at the retail level of Canada, excluding most volatile Automobile Sales Components, which makes up about 25% of Retail Sales headline number. A better release means more consumer spending, which leads to better economy, thus better for its currency. And of course the CORE reading provides a far more accurate look of the actual economy as the automotive component could fluctuate per season.
This is a preview of Canada Core Retail Sales m/m 01/22/10. Read More...
We’ll be looking to tradethe Retail Sales release today from UK, it is a month on month release and it’s a direct measurement of consumer activities at the retail levels. A higher release is generally good for the economy, thus better for it’s currency; a lower release is considered as negative for the economy and not good for it’s currency. Retail Sales makes up a hugepart of the GDP, and the effect of this release could be very profound given the current risk averse condition of the market.
This is a preview of UK Retail Sales m/m 01/22/10. Read More...
Today we’ll trade the Retail Sales release out of New Zealand… Retail Sales release is the measurement of consumer spending in the retail sector, as it reflects the strength of the economy and the strength of consumer spending. We’ll be looking for a difference (or deviation) of at least 0.6% from the Forecasted number, therefore a positive 1.2% (or better) will be somewhat bullish signal for NZD and a 0.0% (or worse) will be a bearish signal for NZD. We’ll look for entries after the release in the direction of the signal, provided that the market shows initial confirmation in the direction of the release first, coupled with a decent retracement for proper risk to reward ratio, then we’ll make our entry.
This is a preview of New Zealand Retail Sales 01/20/10. Read More...
4:30am NY Time UK MPC Meeting Minutes Forecast 0-0-9 Previous 0-0-9
ACTION: GBP/USD N/A
MPC, Monetary Policy Committee, from Bank of England (BOE) will be releasing their meeting minutes over the Rate Decision meeting held 2 weeks ago along with the actual vote count over the rate decision and the APF program. If you recall, MPC decided leave both interested rate and APF unchanged but BOE Official Sentance was particularly bullish during the last week and brought about expectations of the end of QE (Quantitative Easing) program. This action provided an immediate short-term bullish rally for the British Pound as traders and speculators both are expecting a much more bullish stance from BOE.
This is a preview of UK MPC Meeting Minutes 01/20/10. Read More...
Our focus will be on the headline CPI number. If we get a better than expected number of 0.0% by 0.3%, we should be looking to BUY NZD/USD; if we get a lower -0.3%, then we’ll see NZD/USD move down.
With recent RBNZ (Reserve Bank of New Zealand) unexpected hawkish statement by Governor Bollard, market is widely expecting RBNZ to hike interest rate mid this year, following its neighbor Australia as both economies are closely correlated. As this release will undoubtedly push that speculation to a new level since it would either give RBNZ Governor Bollard justification to hike rates, or turn speculation of an early rate hike off.
This is a preview of New Zealand CPI q/q 01/19/10. Read More...
9:00am (NY Time) CA BOC Rate Decision Forecast 0.25% Previous 0.25%
ACTION: USD/CAD Depend on Market Condition
BOC (Bank of Canada) will renders its Overnight Rate decisions for the first time in 2010, and today’s meeting will be watched by traders and speculators since interest rate policy serves as a tool to curb inflation and maintain price stability, this news event is probably the most important event for the day.
This is what I wrote for the last BOC rate decision, I think the situation still remains mostly unchanged:
This is a preview of BOC Overnight Rate Decision 01/19/10. Read More...
We’ll be trading the CPI release out of UK today and our surprise factor (or deviation) is at 0.3%. If the yearly Inflation number increases to a surprise of 2.9%, which is over BOE’s inflation target, we will BUY of GBP/USD. If the Inflation number decreases to 2.3% or remain at the same level as last release, (1.9%) we’ll look to SELL GBP/USD. Historically, even with a small difference of 0.1%, market tend to overreac. If our deviation is hit, there is a probability of over 80% that the market will move 50 pips within the next 30 minutes.
This is a preview of UK CPI y/y 01/19/10. Read More...
We’ll be trading the Core CPI release today and our surprise factor (or deviation) is 0.2%; if the release number (core) increases to a minimum 0.3% then we will BUY USD (either SELL EUR/USD or BUY USD/JPY). If the CPI number decreases to -0.1% or less, we’ll SELL USD (BUY EUR/USD or SELL USD/JPY). Historically even at a difference of 0.1%, market islikely to to exaggerate its move, therefore if either of our tradable releases is hit, there is about 80% of chance market will move 50 pips. If you remember what I wrote last time, this is exactly the same consensus expectation as the market is looking at a low yet steady growth in U.S. Inflation for quite some time now…
This is a preview of US Core CPI m/m 01/15/10. Read More...
We’ll be focusing on the Core Retail Sales figure out of U.S. today. We have both retail sales (healine and core, also know as ex auto) scheduled to be released at exactly 8:30am along with Trichet’s press conference; however, since Trichet may delay his press conference a bit, we should focus on this news and then possibly go back to Trichet later. Obviously it is important to trade other pairs than the EUR/USD.
This is a preview of US Core Retail Sales 01/14/10. Read More...
8:30am NY Time ECB Chairman Trichet Press Conference
ACTION: N/A
We’ll be listening to ECB (European Central Bank) Chairman Jean-Claude Trichet releasing official ECB Interest Rate Statement along with a brief Q&A Session… Here is an overview of the situation:
This is a preview of ECB Trichet Press Conference 01/14/10. Read More...
ECB (European Central Bank) is expected to leave its official interest rate once again at 1.00%, or unchanged. Analysts surveyed seem to agree that it is too soon for ECB to hike interest rate. ECB will probably keep rates unchaged at the current level until possible until 2011 as the Euro Zone is still plagued with the imbalanced economic recovery of its member countries, especially with the recent news out of Greece… Therefore there would be no real justification for a rate hike, regardless of what speculators are thinking. However, in order to fight against growing concerns over inflation, ECB has already started a series of withdrawals of their liquidity program since last year, which means that chances for a surprise rate hike would be much less possible, although the gesture of winding down their stimulus is undoubtedly positive for the EURO.
This is a preview of ECB Minimum Bid Rate Decision 01/14/10. Read More...
We’ll be looking forward to trade the Australian Employment Change release today as this news release is very similar to US Nonfarm Payroll Changes, but for Australia. This release is considered as a high impact report (and possibly trend changing) as the job’s market have a direct influence over the entire economy, which in turn affects inflation, and inflation will affect future RBA monetary policy. If the actual release is better, it would be good for AUD and we would be looking to BUY AUD/USD, if the actual release is worse, it would be bad for AUD and we should be looking to SELL AUD/USD.
This is a preview of Australian Employment Change m/m 01/13/10. Read More...
We’ll focus on the NFP release today, which is expected at -3K with a previous release of -11K; if you remember what happened last NFP, you’d know that the last release surprised the market and revived the end of the year USD rally and caused a major trend change by the much better than expected release of -11K from an expectation of -120K. However, in order for USD to maintain its bullish rally well into 2010, it is important that today’s release is either inline with expectation or in the positive territory.
This is a preview of US NFP (Nonfarm Payroll) Employment Changes 01/08/10. Read More...
We’ll be trading the Canadian Employment Changes today, which is going to be the first of two high impact news releases for this Friday, with NFP being the second event scheduled just 90 minutes later. We are looking for a surprise factor (trigger, deviation) of 30K, therefore if we get a positive 50K of release, we’ll look to SELL USD/CAD; on the other hand, if we get a -20K of release, we’ll look to BUY the USD/CAD pair.
This is a preview of Canada Employment Changes 01/08/10. Read More...
We’ll be trading the IVEY PMI from Canada today, it is the equivalent of both ISM PMI’s out of US where purchasing managers of all sectors of the economy participate in this survey. As with PMIs, they are considered as leading indicators, and a reading of above 50 would be considered as expansion in the economy whereas a reading below 50 would be considered as contraction in the economy.
This is a preview of Canada IVEY PMI m/m 01/07/10. Read More...
7:00am (NY Time) UK Offcial Bank Rate Decision Forecast 0.50% Previous 0.50%
ACTION: GBP/USD N/A
Bank of England’s Monetary Policy Committee (MPC) is scheduled to release their interest rate decision today once again for 2010, and consensus expectations are to keep rates at 0.50% and the APF (Asset Purchasing Facility) at 200 Billion Pound, which are probably no surprise to most traders. However, the important focus today will be the tentative statement accompanying the rate decision, which may reveal BOE’s future monetary policy.
This is a preview of BOE MPC Official Bank Rate Decision 01/07/10. Read More...
10:00am NY Time US ISM Non-Manufacturing PMI Forecast 50.5 Previous 48.7
ACTION: BUY 53.0 SELL 48.0 USD/JPY
Our focus will be on the ISM Non-Manufacturing PMI, or better known as the Services PMI, which is a leading indicator of the nation’s Services sector, as many investors look at this release for directional references on the near-term future of the economy. With the current analyst’s expectation above the 50 level at 50.5, in the event that 53.0 is reached, we could see USD strength returning to the market as JPY weakens across the board; however, if the opposite is true, or 48.0 figure is released, expect to see stronger JPY and stronger EUR as USD suffers on a disappointing outlook.
This is a preview of US ISM Non-Manufacturing PMI (Services) 01/06/10. Read More...
FOMC will be releasing its meeting minutes from the last interest rate decision in 2009. If you recall, the last FOMC meeting were somewhat neutral and disappointing as traders were looking for a more bullish tone from the statement. One of the important phrases that traders were looking for was “…keeping rates low… Extended period.”, which if the Feds were to eliminate the “extended period.” part, it would signal a change in the overall monetary policy… However, FOMC decided to keep the phrase and most of the FOMC Statement remain unchanged from the previous release… Here is the complete context:
This is a preview of US FOMC Meeting Minutes 01/06/10. Read More...
7:30pm NY Time AU Retail Sales Forecast 0.4% Previous 0.3%
ACTION: BUY 1.0% SELL -0.2% AUD/USD
We will be to look for a deviation of 0.6% from the forecast release of 0.4% and we will focus on the Retail Sales release instead of the Trade Balance, but of course we will only trade if there is no conflict between both releases, or it is probably best to sit out as the market may be extremely difficult to read. If we get a 1.0% or -02%, we’d get in either on a LONG or SHORT trade depending on the release with a high probability of seeing the market move over 50 pips in the next 2 hours.
This is a preview of Australian Retail Sales m/m 01/06/10. Read More...
8:15am NY Time US ADP NFP Change Forecast -74K Previous -169K
ACTION: USD/JPY BUY -10K SELL -140K
We will be trading the ADP NFP Employment Release. Since ADP is the largest private payroll processing providers in the U.S., and it releases its version of Non-Farm Payroll numbers about 2 days before the actual NFP based on it’s proprietary data, it is undoubtedly a very high impact release. However, about 80% of the time ADP’s release will go in tandem with the official NFP, but the for the 20% of the exceptions, we’d get figures that could be totally off. This is an excellent indicator for the general risk sentiment of the market as U.S. Employment situation is a global concern; and of course this release sometimes serves as a preview of the NFP on Friday; if the numbers comes out as a surprise of at least 70K more or less from the Forecast of -74K, we should look to trade in the direction of the surprise.
This is a preview of US ADP Non-Farm Employment Change 01/06/10. Read More...
We will be trading the Services PMI figure today and our minimum deviation is 2.0 from the forecast release figure. If we get at least 58.7 or better, we could see further demand in the GBP and we should BUY GBP/USD or GBP/JPY pairs. If we get a 54.7 or worse release, GBP could weaken and we should look to SELL GBP/USD or GBP/JPY pairs.
Because PMI’s are leading indicators and are likely to set the tone for January 2010 for GBP, especially the Services PMI’s as from UK since UK’s economy is 72% services based; therefore traders look at this release for early direction in UK’s economy.
This is a preview of UK Services PMI 01/06/10. Read More...
Looking at the current market condition, I am seeing most traders along with their liquidities returning this week, which may provide some excellent market conditions as we kick off our own trading this week.
The last two weeks of 2009 was very quiet in the sense of scheduled news and unexpected news as most traders took some time off in celebration of yearend holidays. We saw USD maintaining its gains since the last rally, as the market has been at more or less a standstill… Equity market maintained its gains until the last trading day of 2009, and Crude Oil reclaimed the $80 mark once again.
This is a preview of FOREX – Market Outlook for 2010 – Forex Fundamental Analysis. Read More...
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