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: UK Consumer Price Index (March)
Date: Tuesday 11 April 2017 at 08:30 GMT
Markets affected: EUR/ GBP, GBP/USD
Trending hashtags: #gbp, #ukinflation
UK Consumer Price Index came in at 2.3% for March, surpassing the Bank of England’s target inflation rate of 2%. This was the same as February’s CPI reading meaning there is even more pressure on UK consumers. This is the highest it’s been since September 2013 and some analysts are beginning to ask whether an interest rate hike is due soon. The sterling rose on the back of the news hitting a high of $1.2445 at one point. The FTSE was up 0.6% or 44 points as the weak pound is supporting companies with overseas income.
Event: Bank of Canada Interest Rate Decision
Date: Wednesday 12 April 2017 at 14:00 GMT
Markets affected: CAD/USD
Trending hashtags: #cad, #interestrate
The Bank of Canada kept the interest rate at 0.5% as analysts were expecting. Governor, Stephen Poloz was more optimistic in his commentary around the announcement than in previous addresses. He’s often had a dovish approach to the economic outlook even with positive economic data releases and has managed to keep the Canadian dollar down to assist exports. He still doesn’t discount the possibility of further easing and cutting interest rates if needed. The CAD rose 0.4% against the USD to $1.3271 following the interest rate announcement.
Event: Australia Employment Change (March)
Date: Thursday 13 April 2017 at 01:30 GMT
Markets affected: AUD/USD, GBP/AUD
Trending hashtags: #aud, #jobs
Employment data out of Australia early Thursday morning GMT time took markets by surprise coming in at a much better than expected 60,900 new jobs added for the month of March (seasonally adjusted). This was the biggest surge in employment data since October 2015 and should provide some confidence to the Reserve Bank of Australia that has recently commented on soft jobs data. The previous month’s figure of -6000 was also revised upwards to 2,800. While analysts were expecting improvements month-on-month from February into March, at most they were looking for a 20,000 change in employment – instead the result tripled their outlook. Unemployment saw a slight increase of 0.1 points coming up to 5.9%. The Aussie dollar rose against the greenback to $0.76
Event: Germany Consumer Price Index (March)
Date: Thursday 12 April 2017 at 06:00 GMT
Markets affected: EUR/GBP, EUR/USD, DAX
Trending hashtags: #eur, #cpi, #dax
German inflation data released by the Statistisches Bundesamt Deutschland came in as expected with no change of the year-on-year Consumer Price Index for March at 1.6%. In what is stereotypically German behaviour, all data points released in the early hours were consistent with the previous month and with analysts, expectations. The CPI for month-on-month change for March stayed the same as February’s level at 0.1%.
Trade of the Week
Time in: Tuesday 11 April 2017 at 08:00 GMT
Market : EUR/GBP
Investment: $500 with 200:1 leverage
Time out: Tuesday 11 April 2017 at 20:00 GMT
If you had sold the EUR/GBP with a $500 margin at the price of 0.85409 and closed the deal after the release of the UK inflation data on Tuesday at 20:00 GMT which saw the pound rise by 0.6%, you might have made $643. Note this example does not take into account spread.