if actual > forecast = good for currency (for EUR in our case)
[EUR - Trade Balance] = Difference in value between imported and exported goods and services during the reported month.
Eurozone's trade surplus increased unexpectedly in June, data showed Monday.
trade surplus rose to EUR 16.8 billion in June from EUR 15.4 billion in
May, Eurostat reported. Economists had expected the trade surplus to
decrease to EUR 15.1 billion.
Exports increased 3 percent year-over-year and imports grew 2 percent in June.
On a seasonally adjusted basis, the trade surplus fell to EUR 13.8 billion in June from EUR 15.2 billion in May.
Trading the News: U.K. Consumer Price Index (based on dailyfx article)
A slowdown in the U.K.’s Consumer Price Index (CPI) may help to close
the weekly opening gap in the GBP/USD should the inflation report drag
on interest rate expectations.
What’s Expected:Why Is This Event Important:
The Bank of England (BoE) may continue to soften its hawkish tone for
monetary policy as the central bank cuts its outlook for U.K. wage
growth, and a weaker-than-expected CPI print is likely to trigger a
bearish reaction in the GBP/USD as market participants scale back bets
of seeing a rate hike in 2014.U.K. firms may conduct heavy discounting amid weak wage growth paired
with the slowdown in private sector consumption, and a dismal CPI
reading may instill a more bearish outlook for the GBP/USD as it reduces
the BoE’s scope to normalize monetary policy sooner rather than later.
The pickup in private sector lending along with expectations for a
faster recovery may generate another stronger-than-expected inflation
print, and the pound-dollar may continue to push off of the 200-Day SMA
(1.6662) should the data print boost rate expectations.
How To Trade This Event Risk
Bearish GBP Trade: U.K. CPI Slips to 1.8% or Lower
June 2014 U.K. Consumer Price IndexGBPUSD M5 : 64 pips price movement by GBP - CPI news event
MetaTrader Trading Platform Screenshots
GBPUSD, M5, 2014.08.19
MetaQuotes Software Corp., MetaTrader 5, Demo
GBPUSD M5 : 46 pips price movement by GBP - CPI news event
[USD - CPI] = Change in the price of goods and services purchased by consumers.
Consumer prices saw only a modest increase in the month of July,
according to a report released by the Labor Department on Tuesday, with
higher prices for shelter and food offset by decreases in prices for
energy and airline fares.
The Labor Department said its consumer
price index ticked up by 0.1 percent in July after rising by 0.3 percent
in June. The modest increase by the index matched economist estimates.
uptick in consumer prices was partly due to higher food prices, which
climbed by 0.4 percent in July after inching up by 0.1 percent in June.
other food at home index increased by 0.7 percent, its largest increase
since August of 2011, while the index for non-alcoholic beverages rose
by 0.5 percent.
Meanwhile, the report showed that the energy index
pulled back by 0.3 percent in July after surging up by 1.6 percent in
the previous month.
Strategy Video: EURUSD Breaks Support to Extend Fundamental, Technical Trend
EURUSD has cleared support and
further progressed a four-month reversal into a fully developed bear
trend. However, does this most recent push promise momentum? The medium
and long-term fundamental and technical picture paint a very appealing
view. The turn off resistance from a decade-long wedge pattern has
aligned itself to a larger change in underlying fundamentals: through
growth, rate speculation and perhaps eventually risk trends and capital
flows. The opportunity is significant, but the market's momentum behind
the theme is still lacking. What should we look for in an active trade?
How quickly should we expect a setup to play out under these
circumstances? We focus on the EURUSD in today's Strategy Video.
[GBP - Bank of England Minutes] = The BOE's MPC meeting minutes contain the interest rate vote for each
MPC member during the most recent meeting. The breakdown of votes
provides insight into which members are changing their stance on
interest rates and how close the committee is to enacting a rate change
in the future.
BoE Split On Rates For First Time In More Than 3 Years
Bank of England policymakers split on rate decision this month, for
the first time in more than three years as two members said the current
economic situation warrant an immediate rate hike from a historic-low.
the August Monetary Policy Committee meeting, Ian McCafferty and Martin
Weale sought a quarter-point hike in the bank rate to 0.75 percent,
while all other seven members voted to keep the rate unchanged at 0.50
Members were unanimous on holding the rate at 0.50 percent since July 2011.
the stock of purchased assets, the nine-member board unanimously voted
to leave the the programme unchanged at GBP 375 billion.
members McCafferty and Weale said economic circumstances were
sufficient to justify an immediate rise in the Bank Rate. Their
arguments sparked market expectations for an action this year itself.
EURUSD touched multi-month low (based on dailyfx article)
Trading the News: U.K. Retail Sales (based on dailyfx article)
A pickup in U.K. Retail Sales may spur a more meaningful rebound in the
GBP/USD as it raises the prospects for a stronger recovery in the
second-half of 2014.
What’s Expected:Why Is This Event Important:
The growing dissent within the Bank of England (BoE) should continue to
prop up interest rate expectations as a the central bank sees less spare
capacity in the U.K. economy, and we may see a greater rift at the next
meeting on September 4 should the fundamental developments coming out
of the region raise the outlook for growth and inflation.Easing price pressures along with the ongoing improvement in the labor
market may generate a better-than-expected sales report, and a marked
pickup in household spending may spur a meaningful rebound in the
GBP/USD as it puts increased pressure on the BoE to normalize monetary
policy sooner rather than later.However, subdued wage growth paired with the ongoing slack in the real
economy may drag on private consumption, and a dismal print is likely to
spur a further decline in the British Pound as market participants
scale back bets for an early rate hike.
How To Trade This Event Risk
Bullish GBP Trade: U.K. Retail Sales Climbs 0.4% or Greater
GBPUSD, M5, 2014.08.21
GBPUSD M5 : 23 pips price movement by GBP - Retail Sales news event
[EUR - German Manufacturing PMI] = Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry. It's a leading indicator of economic health - businesses react quickly
to market conditions, and their purchasing managers hold perhaps the
most current and relevant insight into the company's view of the economy
German Private Sector Growth Slows In August
Germany's private sector growth slowed in August as contraction in
manufacturing deepened further, flash data from Markit Economics showed
The composite output index dropped to 54.9 in August
from 55.7 in July. The current sequence of continuous activity growth
now stretches to 16 months.
The service sector remained the
driving force behind the overall expansion in August. Although the
services Purchasing Managers' Index fell to 56.4 from 56.7 in July, it
remained above the expected score of 55.5.
manufacturing PMI dropped to 52 in August from 52.4 a month ago. The
index was expected to fall more sharply to 51.5.
"The PMI data
available for the third quarter so far point to a swift recovery in GDP
from the ground lost during the second quarter," Oliver Kolodseike, an
economist at Markit, said.