Press review - page 101

Sergey Golubev
Moderator
113440
Sergey Golubev  
EUR/USD Fundamentals - weekly outlook: March 3 - 7

The euro rose to two-month highs against the dollar on Friday after data showed that U.S. growth was revised sharply lower in the fourth quarter and euro zone inflation rose more than expected in February.

Monday, March 3
  • In the euro zone, Spain and Italy are to release data on manufacturing activity. Meanwhile, ECB President Mario Draghi is to speak in the European Parliament in Brussels.
  • The U.S. is to release data on personal spending, while the Institute of Supply Management is to release data on manufacturing activity.
Tuesday, March 4
  • In the euro zone, Spain is to release data on the change in the number of people unemployed.
Wednesday, March 5
  • The euro zone is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Spain and Italy are to release data on service sector activity.
  • The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Meanwhile, the ISM is to publish a report service sector activity.
Thursday, March 6
  • The ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
  • The U.S. is to publish the weekly report on initial jobless claims and data on factory orders.
Friday, March 7
  • In the euro zone, Germany is to publish data on industrial production.
  • The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.
Sergey Golubev
Moderator
113440
Sergey Golubev  
GBP/USD Fundamentals - weekly outlook: March 3 - 7

The pound moved higher against the dollar on Friday after data showed that U.S. fourth quarter growth was revised sharply lower, stoking concerns that the Federal Reserve may slow the rate of reductions to its asset purchase program.

Monday, March 3
  • The U.K. is to release data on manufacturing activity and net lending to individuals.
  • The U.S. is to release data on personal spending, while the Institute of Supply Management is to release data on manufacturing activity.
Tuesday, March 4
  • The U.K. is to release data on construction sector activity.
Wednesday, March 5
  • The U.K. is to produce data on service sector activity, a leading indicator of economic health.
  • The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Meanwhile, the ISM is to publish a report service sector activity.
Thursday, March 6
  • The BoE is to announce its benchmark interest rate.
  • The U.S. is to publish the weekly report on initial jobless claims and data on factory orders.
Friday, March 7
  • The U.K. is to release data on consumer inflation expectations.
  • The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.
Sergey Golubev
Moderator
113440
Sergey Golubev  

2013-03-03 01:45 GMT (or 02:45 MQ MT5 time) | [CNY - HSBC Final Manufacturing PMI]

if actual > forecast = good for currency (for CNY in our case)

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HSBC confirms China manufacturing index at seven-month low

Chinese manufacturing activity contracted in February at its worst rate in seven months, British banking giant HSBC said Monday, the latest data indicating trouble in the world's number two economy.

Chinese manufacturing activity contracted in February at its worst rate in seven months, British banking giant HSBC said Monday, the latest data indicating trouble in the world's number two economy.

HSBC said its final purchasing managers' index (PMI) for China, which tracks manufacturing activity in factories and workshops, fell to 48.5 last month.

It was a slight increase on the flash PMI of 48.3 the bank released 11 days ago, but it remained the weakest reading since July when the figure stood at 47.7, according to the bank's data.

The index is a closely watched gauge of the health of the Asian economic powerhouse. A reading above 50 indicates growth, while anything below signals contraction.

In January, the index showed contraction for the first time in six months to hit 49.5.

Sergey Golubev
Moderator
113440
Sergey Golubev  

2013-03-03 09:30 GMT (or 10:30 MQ MT5 time) | [GBP - Manufacturing PMI]

if actual > forecast = good for currency (for GBP in our case)

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British Manufacturing Sector Growth Quickens In February

U.K. manufacturing sector expanded for the eleventh successive month in February, and to a slightly larger extent than in the prior month, survey data published by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) revealed Monday.

The seasonally adjusted manufacturing purchasing managers' index advanced to 56.9 in February from 56.6 in January, which was revised down from 56.7. PMI readings above 50 indicate growth in activity, while those below show contraction. The index has now stayed above the neutral mark for the eleventh straight month.

Sergey Golubev
Moderator
113440
Sergey Golubev  

2013-03-03 13:30 GMT (or 14:30 MQ MT5 time) | [CAD - RMPI]

if actual > forecast = good for currency (for CAD in our case)

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Canadian RMPI rises 2.6% in January

Canada's raw materials price index rose for the second consecutive month in January, official data showed on Monday.

In a report, Statistics Canada said the raw materials purchase price index increased by a seasonally adjusted 2.6% in January, blowing past expectations for a 1% gain.

Sergey Golubev
Moderator
113440
Sergey Golubev  

Russian Central Bank Opens Fire With Rate Hike (based on Forbes article)

As expected, geopolitical Russian-Ukrainian tensions are weighing on market sentiment. However, it's rhetoric that is keeping everything in modest check for the time being, despite the situation escalating progressively throughout the weekend.

Behind the scenes, talking is taking some of the capital markets’ nervous edge off Russian President Vladimir Putin's "bully boy" tactics thus far. American President Barack Obama held extended conversations with the Russian leader over the weekend, whilst also securing commitment from the Group of Seven for a joint condemnation of Russia’s violation of Ukrainian territory. Putin obviously needs to defend his actions and has held talks with Europe, specifically German Chancellor Angela Merkel, to defend his intentions regarding the troop movements and agreeing to an Organization for Security and Cooperation-led (OSCE) "fact-finding" mission.

Throughout all of this, it's only natural that the USD, CHF, and JPY are in high demand. Other safe haven flows have given a boost to the bund, U.K. gilt, and U.S. Treasury futures, as well as gold – however, the appetite for risk aversion remains cautious for the moment.

Sergey Golubev
Moderator
113440
Sergey Golubev  

USDCAD Technicals (based on dailyfx article)

  • USD/CAD Technical Strategy: Flat
  • Support: 1.1053-61 (Feb 25 low, 14.6% Fib exp.), 1.0909 (Feb 19 low)
  • Resistance: 1.1155 (23.6% Fib exp.), 1.1194 (Feb 21 high), 1.1223 (Jan 31 high)


Sergey Golubev
Moderator
113440
Sergey Golubev  

2013-03-04 00:30 GMT (or 01:30 MQ MT5 time) | [AUD - Current Account]

  • past data is -12.5B
  • forecast data is -10.0B
  • actual data is -10.1B according to the latest press release

if actual > forecast = good for currency (for AUD in our case)

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Australia Current Account Deficit A$10.1 Billion

Australia saw a seasonally adjusted current account deficit of A$10.139 billion in the fourth quarter of 2013, the Australian Bureau of Statistics said on Tuesday.

That missed forecasts for a shortfall of A$10.0 billion following the upwardly revised A$12.5 billion deficit in the third quarter (originally a deficit of A$12.7 billion).

The primary income deficit climbed A$536 million or 6 percent to A$9.898 billion.

Sergey Golubev
Moderator
113440
Sergey Golubev  

What is a Fundamental? (based on dailyfx article)

  • Fundamentals tack economic changes
  • Traders want to buy the currency with strong fundamentals
  • Check the economic calendar for upcoming events

Trade analysis is normally grouped into two categories, Technical and Fundamental. Normally when developing a trading strategy, traders will choose one or even a combination of both forms of analysis when developing a trading plan. While its always important to know and understand key technical levels, it is also good to know what is fundamentally driving market price.

What is a Fundamental

So what is a market fundamental? A market fundamental is a piece of specific data or event that causes money to flow either in or out of an underlying asset. As a trader we attempt to find the strongest currency and pair it with a weaker one. This means when trading a fundamental strategy, we will be looking for a series of data points that makes one more attractive than the other.

Knowing this, traders should be factoring in things such as employment data, inflation, interest rates and even political turmoil before buying a particular currency. If the underlying fundamental data is improving or getting stronger we have found a candidate currency to buy relative to another with poor performance.

Economic Calendar

So now that you are a little more familiar with what a fundamental is, now we need to find all this data so we can make an educated trading decision. Every good fundamental trader should have access to an economic calendar. This is where we can see which data points are being released from week to week.

Traders should keep an eye on the calendar at all times, as data hits or misses expectations this will ultimately change our fundamental outlook on a currency.


Which Events to Track

The final question is which events we should follow. This is a fair question, because there is a slew of economic data released each week! To help make things easier, the high importance events have been marked on the economic calendar as high priority/impact. These are the events that our normally monitored by policy makers such as central banks and have the ability to immediately influence market price. While these events are certainly important, just watching events such as this week’s employment figures for the US may not give us an overall opinion of the market.

The key to trading fundamentals is to combine a variety of data points to then make an educated trading decision. As we continue our study of fundamentals we will take a look at the main influences on an economy and how they can mold our trading opinion.

Watch the Market

As a fundamental trader, it is important to know how different events affect the valuation of a currency. This will allow you to monitor, track and trade currencies in real time.

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Related article : Building an Automatic News Trader

The Forex Guide to Fundamentals, Part 1: What is a Fundamental?
The Forex Guide to Fundamentals, Part 1: What is a Fundamental?
  • Walker England
  • www.dailyfx.com
Trade analysis is normally grouped into two categories, Technical and Fundamental. Normally when developing a trading strategy, traders will choose one or even a combination of both forms of analysis when developing a trading plan. While its always important to know and understand key technical levels, it is also good to know what is...
Sergey Golubev
Moderator
113440
Sergey Golubev  

2013-03-04 03:30 GMT (or 04:30 MQ MT5 time) | [AUD - Cash Rate]

if actual > forecast = good for currency (for AUD in our case)

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RBA Holds Cash Rate At Record Low; Signals Period Of Stability In Policy

Australia's central bank on Tuesday maintained its main cash rate at a record low for a seventh successive month, and indicated a period of stability in monetary policy, as inflation pressures remained high.

The Reserve Bank of Australia, or RBA, kept the policy interest rate unchanged at 2.5 percent following its rate-setting meeting. The decision was in line with economists' expectations.

In a post-decision statement, Governor Glenn Stevens said that the monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target.

RBA: Cash Rate Target
  • www.rba.gov.au
Monetary policy decisions are expressed in terms of a target for the cash rate, which is the overnight money market interest rate. A media release is issued at 2.30 pm after each Reserve Bank Board meeting, with the Board's decision taking effect the following day. (Prior to December 2007, media releases were...