Weekly economic overview for Oct 18th

Weekly economic overview for Oct 18th

18 October 2015, 21:07
Isauro Martinez Tamez
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Hello traders and welcome to the new trading week, you will now see the most important fundamental news that might affect your trading.

First of all the unscheduled news, or the russian hackers that made it to get reuter's advices to traders, the advices themselves are not bad after reuter's have certified people that are legally authorized to give professional advice, but the problem is when those get public, because that might affect the market, and if market is "free" thus not controled by a certain group of people, then it shouldn't change anything, but if this means the markets have this condition, international measures may be taken, and then the overall market might be affected, in trading conditions this means that a chain reaction might happen if we see movement in the Dow Jones, and change of tendencies in major currencies in the long run.

Now for the scheduled news, we have the ECB president, Mario Draghi, speaking about the QE program, which he is not interested anymore and this means it might end "soon" (around 2 years from now) this means no cheap debt, mainly driven by international data about the interest hike from the fed, which is now unclear, and also high expectations in an euopean economy recovery.

The fed also had several members speaking, they are giving mixed signals about the interest rate, some say that it is very important for the fed not to be driven by international data but yet for internal data, others say it's important to keep an eye in the international markets and its influence in the US economy, nothing is clear about the interet rate hike the fed anounced last year and the traders were expecting that by now rates would be around twice as high the current. Personally I think the interest rate hike won't be done until March next year, and that is if nothing else happens.

For the US also the Institute for Supply Management indicated that the not-manufacturing supplies are still expanding but not as good as expected, this might have as consequence a drop in the manufacturing index, and if true, then the USGDP might be affected as well.

Now we go for the big fish, the England Central Bank decision not only to keep their interest rates but also they almost "promise" they won't raise their interest rates anytime soon, even if the fed decides to, at the first it hit the GBP but after several hours it regained more than the 150 pips they had lots, in my point of view this means bank of England see a very strong economy for themselves and don't want to move any piece to keep it that way, whcih might be dangerous for the current globalization stage we are in.

Finally the Canadian economy show that their economy is recovering quite fast from a previous interest rate drop, beating by far the expectations of the employment change and slightly missing the Industrial purchases Ivey index.

Therefore the fundamental forecast for this week is as follow:

EUR: Neutral

USD: Bearish

GBP: Bullish

JPY: Bullish 

CAD: Bullish

CHF: Bullish

NZD: Neutral

AUD: Bullish

MXN: Bearish 

Last week results: 

Currency: Forecast / Current True False Close

EUR: Neutral / Neutral-Bearish

USD: Bearish / Bearish

GBP: Bullish / Neutral-Bullish

JPY: Neutral-Bullish / Neutral-Bullish

CAD: Bullish / Neutral-Bullish

CHF: Neutral / Neutral

NZD: Neutral / Bullish

AUD: Bullish / Bearish

MXN: Neutral-Bearish / Neutral

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