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 were expectations met or missed and to examine a successful trade you could have made this week.
Event: US ISM Manufacturing PMI
Date: Tuesday 03 January 2017 at 15:00 GMT
Markets affected: EUR/USD
Trending hashtags: #usd, #pmi
The US ISM Manufacturing PMI has surpassed expectations for two months running now. December’s figure came in at 54.7, surpassing the outlook of 53.5, and November’s positive figure of 53.2. December’s result is the highest in the last 24 months with new orders, employment and production all showing highs for 2016. This is pointing to a lot of confidence in the US economy with 11 of the 18 manufacturing sectors reporting growth. Business conditions are positive with demand growing and inflationary pressure is raising prices.
Event: EU Consumer Price Index (YoY, December)
Date: Wednesday 04 January 2017 at 10:00 GMT
Markets affected: EUR/USD, EUR/GBP
Trending hashtags: #eur, #cpi/blockquote>
December’s Consumer Price Index CPI for the Euro Area, year-on-year, came slightly above expectations at 1.1% versus the outlook of just 1.0% and passing the previous months result of 0.6%. According to Eurostat, Core CPI also increased from the previous month’s 0.8%, and the figure expected for December, to reach 0.9%.
Event: US FOMC Minutes report
Date: Wednesday 04 January 2016 at 19:00 GMT
Markets affected: EUR/USD,
Trending hashtags: #fomc, #usd
The Federal Open Market Committee report showed the committee were concerned on the strength of the dollar and that more stimuli might raise demand to unsustainable levels. Traders were waiting to gauge the Fed’s response to Trump’s fiscal policy measures. Overall analysts interpreted the report as showing more positive growth for the economy. Added to the previous day’s very healthy ISM reading, strong economic growth seems even more certain. Equities surged after the report with Dow rising 60 points, the Nasdaq up past 0.9% and the S&P 500 increasing 0.6%. The US dollar, in contrast, slid back from its 14-year highs against a number of currencies and slipped to $1.048 against the euro. US dollar weakness was positive for Asian equities and the Nikkei surged to 2.51.
Event: US ISM Non-Manufacturing PMI (Dec)
Date: Thursday 05 January 2017 at 14:45 GMT
Markets affected: EUR/USD
Trending hashtags: #pmi, #usd
The Institute for Supply Management (ISM) for December passed expectations of 56.6 by reaching 57.2 – the same level it did for November. While the Non-Manufacturing ISM is not an influential on GDP as the Manufacturing PMI, a reading over 50 is bullish for the US dollar, and added to Tuesday’s positive reading, it points to a rosy glow for the state of the nation’s economy.
Trade of the Week
Time in: Wednesday 04 January 2016 at 19:15 GMT
Market : EUR/USD
Investment: $500 with 200:1 leverage
Time out: Wednesday 04 January 2016 at 19:35 GMT
If you had bought the EUR/USD with a $500 margin at the price of 1.04865 and closed the deal once after the FOMC report on Wednesday at 19:35 GMT which saw the dollar drop 0.03%, you might have made $320. Note this example does not take into account spread.