This week was driven by risk appetite sentiment as traders took advantage of the improved economic data including the exceptional US January employment report, China’s January manufacturing PMI reading, better European PMI reports, and strong Empire and Dallas Fed manufacturing surveys… Not mentioning Tuesday’s informal EU leaders’ summit, where 25 EU member states (ex the UK and the Czech Republic) further refined their commitment to the new fiscal pact and the €500B ESM permanent bailout fund, which in turn boosted the risk sentiment further.
Currency Trading Tips
As we end this week and get ready for an extremely busy next week, it’s important to know that today is the end of the week, month, and the 3rd quarter of 2011. We are seeing defensive order flows as traders demand safe-haven currencies such as the USD and JPY, while high yielders like AUD and NZD are getting sold off across the board. With the market likely to exaggerate as usual, I believe we should see a possible rebound towards the early part of the week. Of course, with over 13 high-impact news scheduled, let’s use more caution than usual as the market could be extremely volatile.
Last week we saw market took a turn for the worse as concerns over European debt crisis intensified. The Fed announced the highly anticipated “Operation Twist” but failed to convince the market that the new measure would indeed stimulate economy. IMF issued its world economic outlook, highlighting the current situations in both U.S. and Europe have high risks of slipping back to recession. While in Asia, China’s growth seemed to have reached a plateau as its recent PMI showed contraction in the economy.
Here’s the list for next week’s upcoming tradable news releases.
- Wed September 21, 2011 – 4:30am EDT – UK MPC Meeting Minutes
- Wed September 21, 2011 – 7:00am EDT – CA Core CPI
- Wed September 21, 2011 – 10:00am EDT – US Existing Home Sales
- Wed September 21, 2011 – 2:15pm EDT – US FOMC Interest Rate
- Wed September 21, 2011 – 6:45pm EDT – NZ GDP q/q
- Thu September 22, 2011 – 8:30am EDT – CA Core Retail Sales
Here’s the list for the tradable releases for the week:
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Tue September 13, 2011 – 4:30am EDT – UK CPI y/y
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Wed September 14, 2011 – 8:30am EDT – US Core Retail Sales
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Wed September 14, 2011 – 5:00pm EDT – NZ RBNZ Interest Rate
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Thu September 15, 2011 – 4:30am EDT – UK Retail Sales
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Thu September 15, 2011 – 8:30am EDT – US Core CPI
This week’s focus is going to be Trichet’s Press Conference on Thursday, as EU is currently once again under scrutiny over sovereign debt concerns. Although ECB is not expected to announce any changes to its monetary policy, Trichet will at least have a chance to either calm or surprise the market with new measures. We’ll probably find out more as we approach Thursday as Trichet is likely to comment early on any potential surprises…
The key focus for last week was on Bernanke’s Jackson Hole Speech. But since Bernanke didn’t launch any new policies, market took his comments that “FOMC would consider additional measures at its September Meeting” by extending the meeting to 2 days as a subtle “you know” message that the Fed is working on more easing, pending on more economic data, such as the NFP.
