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: Australia RBA Interest Rate Decision
Date: Tuesday 7 March 2017 at 03:30 GMT
Markets affected: AUD/USD, GBP/AUD
Trending hashtags: #aud, #interestrate
The Reserve Bank of Australia kept the interest rate at 1.5%, as it has for the last six meetings. With positive economic data released recently most analysts were expecting the bank to keep the rate unchanged. Bank Governor, Philip Lowe, had pretty much signalled before the meeting that to support inflation and financial stability, that rates would stay on hold. The current rate is the lowest it’s been historically, after being slashed twice during 2016. The cash rate hasn’t seen an increase in almost seven years and analysts are split as to whether we might see a raise this year with some even forecasting more cuts.
Event: EU Gross Domestic Product (YoY, Q4)
Date: Tuesday 7 March 2017 at 10:00 GMT
Markets affected: EUR/USD, EUR/GBP
Trending hashtags: #eu, #gdp
The Eurozone’s Gross Domestic Product for the fourth quarter of 2016 increased by 0.4% making a 1.7% change compared to Q4 in 2015. Markets were expecting this result which shows moderate but consistent growth for the region.
Event: US ADP Non-Farm Employment Change
Date: Wednesday 08 March 2017 at 13:15 GMT
Markets affected: EUR/USD, USD/JPY
Trending hashtags: #usd, #adpemployment
The ADP Research Institute reported that in February, the US saw the most workers added in almost three years, proving that the economy was strong enough to deal with the increased interest rates. The report on Wednesday showed that payrolls surged 298,000, about 100,000 more than expected. Quick to respond to the positive news, Fed Fund futures prices leaped to a 91% chance of an interest rate hike at next week’s Fed meeting. The USD increased positively against a number of its main currency pairs and saw gold reach new lows by the end of the day.
Event: EU European Central Bank (ECB) Interest Rate Decision
Date: Thursday 09 March 2017 at 12:45 GMT
Markets affected: EUR/GBP, EUR/USD
Trending hashtags: #eu, #ecb, #interestrate
The European Central Bank kept interest rates at 0% as expected. Central bank president, Mario Draghi noted that while the region’s economy is improving, loose monetary policy will remain to keep economic recovery on track. With a number of key elections coming up in the region, the ECB will continue with its bond-buying plans until December of this year. The EUR rose 0.6% to trade at $1.06 on the back of more hawkish statements and assurances from Draghi that the euro is here to stay.
Trade of the Week
Time in: Wednesday 08 March 2017 at 13:15 GMT
Market : XAU/USD
Investment: $500 with 200:1 leverage
Time out: Wednesday 08 March 2017 at 14:15 GMT
If you had sold the gold with a $500 margin at the price of $1,213.44 per ounce and closed the deal once after the US ADP Non-Farm Employment Change report on Wednesday at 13:15 GMT which saw the gold drop 0.05%, you might have made $516. Note this example does not take into account spread.