Based on Bearish GBP Momentum at Risk on Hawkish BoE Inflation Report article
Trading the News: Bank of England Inflation Report
The Bank of England’s (BoE) Inflation Report may heavily influence the
near-term forecast for the British Pound as market participants see the
central bank implementing its exit strategy ahead of schedule.
Why Is This Event Important:
There’s speculation that Governor Mark Carney will rein in the optimism
surrounding the U.K. economy, but the central bank may adopt a more
hawkish tone for monetary policy as the stronger recovery raises the
risk for a prolonged period of above-target inflation.
Potential Price Targets For The Release
The BoE implemented forward-guidance for monetary policy as they pegged a
7.0% threshold for unemployment, but we saw Governor Mark Carney
refrain from implementing a growth target as the central bank continues
to operate under its inflation-targeting framework. In turn, the initial
dip in the British Pound was short-lived, with the GBPUSD climbing
above the 1.5400 handle, and the sterling continued to gain ground
throughout the day as the pair closed at 1.5486.
2013-11-12 09:30 GMT (or 10:30 MQ MT5 time) | [GBP - Claimant Count Change]
if actual < forecast = good for currency (for GBP in our case)
British unemployment claims declined more than expected by
economists in October, while the jobless rate edged lower in the
three-months to September, data from the Office for National Statistics
The claimant count for October fell by 41,700
from a month earlier to 1.31 million, the lowest level since January
2009. Economists had forecast a decline of 30,000. The claimant count
rate fell to 3.9 percent from 4 percent in September.
unemployment rate fell to 7.6 percent in July-September from 7.8
percent in April-June 2013. The figure matched economists forecast.
There were 2.47 million unemployed people in the country in the
2013-11-12 10:30 GMT (or 11:30 MQ MT5 time) | [GBP - BOE Inflation Report]
Highlights of his comments are below.
Trading the News: German Gross Domestic Product (based on Euro Rebound at Risk on Slowing 3Q GDP- More Dovish ECB Ahead? article)
Germany’s 3Q Gross Domestic Product (GDP) report may highlight a
weakening outlook for the euro-area as the region’s largest economy
faces a slowing recovery. In turn, a dismal development may heighten the
bearish sentiment surrounding the single currency as it spurs bets for
additional monetary support.
Time of release: 11/14/2013 7:00 GMT, 2:00 EST
Primary Pair Impact: EURUSD
Forecast: 0.1% to 0.3%
Why Is This Event Important:
Following the surprise rate cut last week, it seems as though the
European Central Bank (ECB) will further embark on its easing cycle as
President Mario Draghi maintains his pledge to keep interest rates at
the current level or lower, and the Governing Council may adopt more
non-standard measures over the coming months as growth and inflation
How To Trade This Event Risk
Bearish Euro Trade: German 3Q GDP Misses Market Forecast
After holding flat during the first three-months of 2013, Europe’s
largest economy grew 0.7% in the second quarter to emerge from the
recession, while the euro-area expanded 0.3% during the same period amid
forecasts for a 0.2% print. Nevertheless, the initial uptick in the
EURUSD was short-lived, with the pair slipping back below the 1.3275
region, and the single currency struggled to hold its ground throughout
the day as it closed at 1.3252.
2013-11-14 09:30 GMT (or 10:30 MQ MT5 time) | [GBP - Retail Sales]
if actual > forecast = good for currency (for GBP in our case)
U.K. Retail Sales Fall In October
U.K. retail sales volume dropped 0.7 percent month-on-month in
October due to a notable 1.3 percent fall in non-food store sales, the
Office for National Statistics said Thursday.
The drop in sales volume follows a 0.6 percent rise in September. It was forecast to remain flat in October.
automotive fuel, retail sales volume slipped 0.6 percent, partially
offsetting the 0.8 percent rise in September. The rate of decline also
exceeded the expectations for a 0.1 percent fall.
AUD/USD Technical Analysis (based on Forex: AUD/USD Technical Analysis – Bears Aim to Challenge 0.92 article)
Eurozone Economy Moves Closer To Stagnation
The Eurozone economy moved to near-stagnation in the third quarter,
underscoring the fragile nature of recovery in the region as Germany and
France failed to maintain the growth momentum. Further, the relapse in
economic activity will possibly make the task of the European Central
Bank difficult to take inflation back to the target level.
USDJPY 98.90 serves as key pivot now; buying a dip (based on USDJPY Highlights a Number of Trade Setups for Next Week article)
Trading Strategy: Order to go long at 99.90, stop 98.80. A breakout
could be phenomenal so allow the market to dictate upside (if it plays
The Week Ahead: Where in the World to Invest?
It was another week where the stock market surprised the majority by
continuing higher despite the already lofty levels of the major
averages. The S&P 500 broke through short-term resistance on
Wednesday and closed the week just below the 1800 level.
Oftentimes, there is selling when a market average reaches a round
number like 1800 but it is also possible this time that a strong close
above this level will move more money off the sidelines. Mutual fund
managers have a relatively high level of cash on hand and many are not
keeping pace with their benchmarks. A failure to match or exceed the
benchmarks could jeopardize their year-end bonuses.
Many continue to voice concern over the high level of bullish sentiment,
which implies that the smaller investors have joined the party. But
Charles Schwab CEO Walter Bettinger commented on CNBC that only about
half of their clients think it is a good time to be investing in
equities. Furthermore he said “Our clients are engaged, but they’re very
cautious about the markets overall.”