Welcome to 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 Inflation Report Hearings
Date: Tuesday 26 September 2016 at 08:30 GMT
Markets affected: EUR/GBP, GBP/USD
Trending hashtags: #sterling, #gbp, #inflation
The biggest hurdle facing the UK economy has been inflation which was reported as hitting 2.9%, a little above the expected 2.8%. That along with a decline in real wage growth with wages rising only 2.1%, consumer buying power is taking a hit. The UK went from one of the top performing economies of the G7 in 2014 with 3.1% growth to being the slowest growing at just 1% forecasted for 2018.
Event: Fed’s Janet Yellen Speech
Date: Wednesday 27 September 2017 at 16:45 GMT
Markets affected: USD/JPY, EUR/USD
Trending hashtags: #usd, #fed
The greenback got a boost following Fed Chair, Janet Yellen’s speech on Wednesday. She commented that the central bank should look to increase the interest rate gradually as waiting for inflation to hit the 2% target may not be the best approach for the economy. She noted the risk of an over-heated labour market should a rate increase not come in over time due to pressure create by inflation which would be difficult to contain.
Event: New Zealand Interest Rate Decision
Date: Wednesday 27 September 2016 at 21:00 GMT
Markets affected: AUD/NZD, NZD/USD
Trending hashtags: #nzd, #interestrate
The Reserve Bank of New Zealand kept the interest rate at the expected 1.75% level. Following an indecisive election result it’s not surprising that the central bank is staying put on its current rate. Also, the previous day the ANZ bank survey showed a fall in business confidence from 29.6 to 38.2 which may be influencing the bank’s decision on keeping rates at current levels. According to the ANZ bank, an increase in household incomes and commodity prices should mitigate any negative effects from the slight dip in the business sentiment index.
Event: EU Economic Sentiment
Date: Thursday 28 September 2017 at 09:00 GMT
Markets affected: EUR/USD, EUR/GBP
Trending hashtags: #eur
The economic sentiment indicator for the Eurozone increased in August to 113 from the July figure of 111.9. The indicator combines both business sentiment and consumer sentiment. Stronger business confidence means the common region is likely to see faster growth for the remaining months of the year as confident businesses invest more and households spending frees up. This should be good news to the European Central Bank that is considering cuts to Quantitative Easing early next year.
Event: US Gross Domestic Product Q2
Date: Thursday 28 September 2017 at 13:30 GMT
Markets affected: USD/JPY, EUR/USD
Trending hashtags: #usd, #gdp
GDP in the US grew 3.1% in the second quarter of 2017. The figure came above expectations and was the best Q-on-Q growth for the last two years. Stable growth in the jobs market and a booming stock market are stimulating consumer spending which is all good signs for the world’s largest economy.
Trade of the Week
Time in: Thursday 28 September 2017 at 06:00 GMT
Market : EUR/USD
Investment: $500 with 200:1 leverage
Time out: Thursday 28 September 2017 at 14:00 GMT
If you had bought the EUR/USD with a $500 margin at the level of 1.17245 and closed the deal once after the EU Economic Sentiment data on Thursday which saw the currency pair increase by 0.6%, you might have made $592. Note this example does not take into account spread.