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: Eurozone GDP Preliminary Data (QoQ, YoY)
Date: Tuesday 14 February 2017 at 10:00 GMT
Markets affected: EUR/USD, EUR/GBP
Trending hashtags: #euro, #gdp
Eurozone Gross Domestic Product came in under expectations at 0.4% instead of 0.5% for Q4, and 1.7% instead of expected 1.8% for year-on-year. Countries across the region were a mixed bag with Greece also coming in under expectations with GDP at 0.3% (expectation was 0.9%), Portugal showed improvement at 1.9% (previous reading was 1.6%), Italy’s figure came in at 1.1% (expectation was at 1.0%), and Germany stayed steady at 1.7% (previously also 1.7%).
Event: US Producer Price Index
Date: Tuesday 14 February 2017 at 13:30 GMT
Markets affected: EUR/USD
Trending hashtags: #usd , #ppi
U.S. Producer Prices index was expected at a modest 0.3%, as per the previous reading, but outshone forecasts with a 0.6% month-on-month growth. The year-on-year result was 1.6%, slightly better than expectations of 1.5%. The result for January was a four year high as manufacturers reported an increase in raw material prices like crude oil. However, the strong US dollar is holding back any spill over into consumer inflation.
Event: Janet Yellen Speaks
Date: Wednesday 15 February 2017 at 15:00 GMT
Markets affected: EUR/USD, JPY/USD
Trending hashtags: #usd, #fed, #yellen
Janet Yellen injected confidence in the US economy and indicated an interest rate hike would not be far off. Stocks and the US dollar all surged on the optimistic news with equities hitting four year highs. US stocks closed on Tuesday with a 4-week straight record close with the S&P 500 gaining 92.5 points closing at a high of 20,504.41. The Nasdaq gained 0.3% closing the day also at a record high of 5,782.57. Asian stocks also rose on the back of the announcement but the real winner on the day was the US Dollar which rose to a four week high as Yellen noted inflation and wage growth are on track – two indicators that the Fed might raise rates throughout the year. The US dollar index which compares the USD against a bundle of currency pairs rose 0.3%. The USD rose against the yen by 0.5% to ¥114.17, and rose similarly against the EUR at 0.518% to $1.0572 (this move was also due to low EU GDP data released earlier in the day), and the greenback rose 0.23% against the sterling to $1.2464.
Event: Australian Employment Data
Date: Thursday 16 February 2017 at 00:30 GMT
Markets affected: AUD/USD
Trending hashtags: #aud, #jobs
Jobs data for January once again exceeded analysts’ expectations as did the December release with 13,500 new jobs added versus an outlook of just 10,000. December’s figure was revised up from 13,500 to 16,500 showing employment to have increased four months in a row with each consecutive month beating the previous for the last three. And while unemployment also fell economists are concerned that full time employment has dropped compared to part time employment and total hours worked remains week.
Trade of the Week
Time in: Wednesday 15 February 2017 at 14:00 GMT
Market : US500
Investment: $500 with 200:1 leverage
Time out: Wednesday 15 February 2017 at 21:00 GMT
If you had bought US500 with a $500 margin at the price of 2,331.01and closed the deal after Janet Yellen’s speech on Wednesday at 15:00 GMT which saw the S&P 500 gain by 0.8%, you might have made $836. Note this example does not take into account spread.