James Trescothick

Education Manager at easyMarkets. 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 Retail Sales

Date: Wednesday 15 March 2017 at 12:30 GMT

Markets affected: EUR/USD, GBP/USD

Trending hashtags: #usd, #retailsales

Retail sales missed the mark coming in at only a 0.1% change and disappointed analysts that were expecting a 0.2% change. This was the smallest increase in six months which signals that the US economy has lost further momentum in the first quarter.  January’s figure of 0.4% increase was revised upwards to 0.6%. February’s low result for retail sales highlight that while we’ve been seeing strong jobs data coming out of the US this year, wages have yet to lift spending. Delays in tax refunds are what some economists are blaming the disappointing figure on as well as the new law which requires more stringent scrutiny of tax credits claimed by lower-income taxpayers.

Event: US Consumer Price Index

Date: Wednesday 15 March 2017 at 12:30 GMT

Markets affected: EUR/USD

Trending hashtags: #usd, #cpi

Consumer Prices in the US came in at the expected 2.7% change, a little ahead of the previous reading of 2.5%. January’s figure was already the best figure over a 12 month period for the last 5 years, so an even better result for February is pointing to greater purchasing power for the US dollar. It seems that inflation is not having an undesirable effect on the dollar and this would have supported the Fed’s decision for an interest rate hike later in the day.


Event: US Fed Interest Rate Decision

Date: Wednesday 15 March 2017 at 18:00 GMT

Markets affected: EUR/USD, GBP/USD, USD/JPY, S&P500, NDQ, DOW

Trending hashtags: #usd, #interestrate, #fed

As the markets had pretty much expected and even priced in, the Fed voted to raise the interest rate by 0.25% on Wednesday bringing the rate up to 1.00%. What did take analysts by surprise was how the markets reacted. Stocks and precious metals rose on the back of the announcement while the USD fell. Gold surged 2% and the US dollar index dropped 1%. The central bank didn’t add any updates regarding the economy and left forecasts for GDP, unemployment and core PCE inflation unchanged. The intention to keep raising rates was reiterated and it seems the markets are in for another two hikes throughout the year.

Event: Japan Interest Rate Decision

Date: Thursday 16 March 2017 at 02:00 GMT

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

Trending hashtags: #jpy, #nikkei

The Bank of Japan continues to keep its interest rate in negative territory. Following the Fed’s raising its rate a quarter of a percent, the BOJ, decided to maintain their rate at -0.1%. The board also decided to keep 10-year government bond yield at around 0% even while making positive comments on the nation’s economy.

 Trade of the Week

Time in: Wednesday 15 March 2017 at 17:00 GMT
Market : XAU/USD
Investment: $500 with 200:1 leverage
Time out: Wednesday 16 March 2017 at 03:00 GMT

P&L: $2,027

If you had bought gold with a $500 margin at the price of $1,200.39 per ounce and closed the deal once after the Fed interest rate decision on Thursday at 03:00 GMT which saw gold soar 2%, you might have made $2,027. Note this example does not take into account spread.

 

http://www.nasdaq.com/article/us-retail-sales-post-smallest-gain-in-six-months-20170315-00558

http://www.tradingeconomics.com/japan/interest-rate

https://www.fxstreet.com/economic-calendar

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