Senior Analyst

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: Australia RBA Meeting’s Minutes
Date: Tuesday 21 February 2017 at 00:30 GMT
Markets affected: AUD/USD
Trending hashtags: #aussie, #aud, #rba

The Reserve Bank of Australia released their 7 February meeting minutes on Tuesday noting an improved global economy and a pickup in manufacturing, industrial production and merchandise trade. Australia’s main trading partners have seen a modest increase in GDP with outlooks for the coming year also being revised upwards due to the expectation that US fiscal policy will expand, though China growth is expected to slow. On a local front, Australian GDP saw a 0.5% decline in September due to unusual weather conditions and disruption to coal supply; it’s not expected to negatively impact GDP growth for 2017 which is targeted at 3%. The cash rate was left unchanged at 1.5%. The AUD/USD fell by 0.25% just minutes after the release due to the negative growth results.

Event: UK GDP Data Q4
Date: Wednesday 22 February 2017 at 09:30 GMT
Markets affected: GBP/USD, EUR/GBP
Trending hashtags: #gbp , #gdp, #sterling

The Office for National Statistics in the UK released Gross Domestic Product for the fourth quarter showing 0.7% growth, beating expectations of 0.6%. However, on a year-on-year basis the GDP came in at only 2%, slightly lower than the previous estimate of 2.2%. The increase was due to growth in the services sector but retail, construction, production and the agricultural sectors all retreated. The pound fell 0.2% on the release of the data to $1.2444. It also fell against the euro after 2-month highs due to reduced business sentiment from €1.1901 to €1.1846.

Event: EU Consumer Price Index – core Y-o-Y (January)
Date: Wednesday 22 February 2017 at 10:00 GMT
Markets affected: EUR/USD, EUR/GBP
Trending hashtags: #eur, #cpi

Eurostat’s release of EU core CPI came in at a steady 0.9% growth, as per the previous reading and what was expected by the markets. Consumer Price Index for January also remained the same as the last reading and what the markets were forecasting at 1.8%.

Event: Canada Retail Sales (December)
Date: Wednesday 22 February 2017 at 13:30 GMT
Markets affected: CAD/USD
Trending hashtags: #cad, #retail

Canada Retail Sales for December came in below expectations of 0% with a change of -0.5%. November’s figure was also revised to -0.1% from an already disappointing at 0.1%. The CAD/USD slipped on the back of the disappointing result.

Event: US FOMC Meeting Minutes
Date: Wednesday 22 February 2017 at 19:00 GMT
Markets affected: EUR/USD, GBP/USD, USD/JPY
Trending hashtags: #usd, #fomc

Weak data out of Europe and the United Kingdom saw the US dollar rising for it to fall after the release of the FOMC minutes from their end of January meeting. While comments for another interest rate hikes were hawkish, speculators were disappointed as they were expecting one sooner in March. Concerns of inflation overshooting its targets and President Trump’s still undefined fiscal stimulus plans have some committee members worried on downside risks. The US dollar index hit a new low at 101.15 while the USD/JPY also fell to daily lows at 113.00.

Trade of the Week
Time in: Wednesday 22 February 2017 at 03:00 GMT
Market : GBP/USD
Investment: $500 with 200:1 leverage
Time out: Wednesday 22 February 2017 at 12:00 GMT
P&L: $670

If you had sold GBP/USD with a $500 margin at the price of 1.25053 and closed the deal once after central the release of the UK’s fourth quarter GDP on Wednesday at 12:00 GMT which saw GBP drop 0.67%, you might have made $670. Note this example does not take into account spread.

 

http://www.rba.gov.au/monetary-policy/rba-board-minutes/2017/2017-02-07.html
https://www.dailyfx.com/forex/market_alert/2017/02/21/Australian-Dollar-Falls-as-RBA-Minutes-See-Lower-Rates-for-Longer.html
http://uk.businessinsider.com/brexit-aftermath-second-estimate-uk-gdp-q4-2017-2
http://www.telegraph.co.uk/business/2017/02/22/pound-hits-two-month-high-against-euro-ahead-uk-gdp-breakdown/

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