Trading the News: U.K. Gross Domestic Product (based on dailyfx article)
Trading the News: U.K. Gross Domestic Product (GDP)
The U.K.’s 3Q Gross Domestic Product (GDP) report may spur a lower-low
in GBP/USD should the advance reading drag on interest rate
What’s Expected:Why Is This Event Important:
A marked slowdown in the U.K. economy may continue to spur a 7-2 split
within the Monetary Policy Committee (MPC) as Governor Mark Carney
remains in no rush to normalize monetary policy, and the GBP/USD may
face a further decline over the remainder of the year as the Fed
prepares to exit it easing cycle.Lower business outputs paired with the slowdown in private-sector
consumption may dampen bets of seeing a stronger recovery in the U.K.,
and a dismal 3Q GDP print may trigger fresh monthly lows in the GBP/USD
especially as the BoE retains a rather neutral tone for monetary policy.Nevertheless, the expansion in building activity along with the ongoing
improvement in the labor market may pave the way for a
better-than-expected growth report, and a positive development may spur a
larger dissent within the BoE as the fundamental outlook for the U.K.
How To Trade This Event Risk
Bearish GBP Trade: U.K. GDP Slows to 0.7% or Lower
Forum on trading, automated trading systems and testing trading strategies
Something Interesting in Financial Video October 2014
newdigital, 2014.10.25 16:56
Trading Video: EURUSD Traders Buckle Up for FOMC, ECB Stress Tests, Risk Trends
EUR/USD Politics and Growth :
"Full-on quantitative easing of the sort the Fed is now winding up remains politically difficult to countenance.
On Monday the ECB will announce how many covered bonds, which are
backed by high-quality assets so holders may be reluctant to give them
up, it bought in its first week in the market."
Weekend Edition with John O'Donnell
Great bullish move to the upside for all 4 major indices this week, yet fear still has not abated. John and Merlin
take a look at the market and offer insights as to what’s driving it,
and how we should approach it. They also talk about the trading industry
as a profession and the best way to get involved with the financial
markets. Finally, John tips the scales for his weekly weigh in!
if actual > forecast (or actual data) = good for currency (for USD in our case)
[USD - Pending Home Sales] = Change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction.
U.S. Pending Home Sales Show Modest Rebound In September
After reporting a notable pullback in U.S. pending home sales in the
previous month, the National Association of Realtors released a report
on Monday showing a modest rebound in pending sales in the month of
NAR said its pending home sales index inched up by 0.3
percent to 105.0 in September after falling by 1.0 percent to 104.7 in
August. Economists had been expecting pending home sales to increase by
about 0.5 percent.
A pending home sale is one in which a contract
was signed but not yet closed. Normally, it takes four to six weeks to
close a contracted sale.
With the modest monthly increase, the
pending home sales index is up by 1.0 percent compared to September of
2013, reflecting the first year-over-year increase in eleven months.
Yun, NAR chief economist, said moderating price growth and sustained
inventory levels are keeping conditions favorable for buyers.
supply for existing homes was up in September 6 percent from a year
ago, which is preventing prices from rising at the accelerated clip seen
earlier this year," Yun said. "Additionally, the current spectacularly
low mortgage rates should help more buyers reach the market."
Strategy Video: Volatility Underpricing FOMC Risk Suggests Explosive Markets Ahead
Heading into major event risk, we typically see expectations for
volatility and the cost of hedges rise. Yet, as we close in on
Wednesday's FOMC decision; we find the anticipation for market reaction
is surprisingly stoic. Not only are activity levels generally higher now
than they have been in past months; but the forecasts for the central
bank's bearings have grown increasingly extreme towards the dovish view -
at the same time the market grows increasingly aware of its dependency
on temporary global stimulus. This disparity in impending event and the
market's position reflects a similar type of mispricing to traditional
scenario analysis. Yet, here, the result is greater volatility.