Senior Analyst

Passionate about the markets, the excitement, the story driving the markets at the time, the fundamentals and even the technicals.

Welcome to the easyMarkets weekly review where we look back over the results of some of the previous week’s economic indicators. It gives us the chance to reflect on how much expectations were met or missed and to examine a successful trade you could have made this week.

Event: US Core PCE Price Index

Date: Tuesday 30 May 2017 at 12:30 GMT

Markets affected: EUR/USD, GBP/USD, USD/JPY

Trending hashtags: #usd, #inflation

Core Personal Consumption Expenditure (PCE) in the US increase 0.2% for the month of April as analysts were forecasting. This inflation figure came above the previous month’s 0.1% rise but on an annual basis reduced to 1.5% from 1.6%. Inflation data has been lower than forecasts recently and the drop in oil prices have been blamed. It is seen as a temporary glitch by the FOMC members who had been expecting inflation to hit their 2% target.

Event: EU Inflation Data

Date: Wednesday 31 May 2017 at 09:00 GMT

Markets affected: EUR/USD, EUR/GBP

Trending hashtags: #eur, #gdp

The Consumer Price Index (EU Norm) for May in the Eurozone fell to 1.4% from the previous month’s 1.9% as analysts were expecting. On an annualized rate it fell from 2% to 1.5%, again in line with expectations. The EU Norm, like the national CPI is considered a proxy to inflation and is released by the Instituto Nazionale di Statistica.

Event: Canada GDP

Date: Wednesday 31 May 2017 at 13:45 GMT

Markets affected: CAD/USD

Trending hashtags: #cad, #gdp

Gross Domestic Product for Canada in March came in at a better than expected 0.5% beating out the previous month’s flat line of 0% and surpassing analysts’ forecasts of 0.2%. On a quarterly basis, Q1 of 2017 performed much better than the previous quarter coming in at 3.7% versus Q4’s upwardly revised figure of 2.7%. However, it still disappointed expectations of 3.9% showing that even with the increase in commodity prices, the Canadian economy still has room for improvement.

Event: China Caixin Manufacturing PMI

Date: Thursday 01 June 2017 at 13:45 GMT

Markets affected: CNY/USD, AUD/CNY

Trending hashtags: #cny, #pmi, #aud

China’s Caixin PMI came in at an 11-month low at 49.6 points for May and dropping beneath the 50% level showing a contraction in manufacturing. April’s figure of 50.3 was already a worrying figure and while analysts expected May to drop further, they were forecasting 50.1 points. The Caixin figure was in contrast to official government figures that came out the previous day painting a more positive picture of 51.2 points. The Caixin tends to measure more small to medium sized businesses while the government data takes into account larger, government backed companies. The Australian dollar took a dive on the back of the disappointing Caixin data and at one point was 100 pips down against the USD. As a major trade partner, the Aussie is particularly sensitive to the state of the Chinese economy.

Event: US ISM Manufacturing PMI

Date: Thursday 01 June 2017 at 12:30 GMT

Markets affected: EUR/USD, GBP/USD, USD/JPY

Trending hashtags: #usd, #pmi

Manufacturing in the US showed a mildly stronger than expected May coming in at 54.9, a tenth of a percentage point higher than the previous month and much better than the forecast of 54.6. Analysts are viewing this as a positive sign and that manufacturing is leading the way in the road to recovery for the US. A low first quarter GDP reading of just 1.2% is expected to be surpassed by Q2, adding further support to the recovery of the US economy. These positive data are supporting the forecast of a Fed rate hike in their next meeting in June. All eyes now turn to the NFP employment data due 12:30 GMT.

Trade of the Week

Time in: Thursday 01 June 2017 at 01:00 GMT
Market : AUD/USD
Investment: $500 with 200:1 leverage
Time out: Thursday 01 June 2017 at 14:00 GMT

P&L: $1,072

If you had sold the AUD/USD with a $500 margin at the price of 0.74538 and closed the deal once after the China Caixin Manufacturing PMI Data which saw the currency pair decrease 1.1%, you might have made $1,072. Note this example does not take into account spread.

http://www.economiccalendar.com/2017/05/30/us-march-pce-price-index-increases-0-2-core-annual-rate-declines-to-1-5/

http://www.cnbc.com/2017/05/31/caixin-china-manufacturing-pmi-for-may-falls-to-11-month-low.html

https://www.dailyfx.com/forex/market_alert/2017/06/01/Australian-Dollar-Sinks-After-China-Caixin-PMI-Contraction.html

http://www.marketwatch.com/story/us-manufacturing-kept-strength-in-may-ism-survey-finds-2017-06-01

 

 

 

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