Upcoming Risk Events, April 23 – April 28, 2017
Hi everyone, this is the weekly risks event analysis where I talk about economic events and news that are scheduled to be released in the upcoming week and how they can potentially be important and have an impact on your trading. I will only highlight the events that I consider to cause decent market movements that might give us some nice trading opportunities.
Expected figures and dates sometimes change so please refer to my economic calendar for a full list of all scheduled economic data. http://brandonturnerfx.com/economic-calendar/
Also, keep in mind that depending on the time zone that you live in some of these events might fall on different days than when I explain them.
If you want to learn more about what I do check me out at http://brandonturnerfx.com/
Sunday, April 23, 2017
I don’t usually cover Sunday’s but this one is a special day that will have a meaningful effect on the pricing of EUR. The first round French presidential elections take place on Sunday. This is something that has overshadowed the markets for quite some time and the results will be very impactful on the price of EUR.
Here is how it works: In the first round this Sunday, if no candidate wins more than 50% of the vote then there will be a second round vote on May 7th where the candidate with the most votes in the second round becoming the new French President. However, if one of the candidates does manage to get over 50% of the vote this Sunday then the victor will be crowned and we will have the new French President.
So how does this impact the Euro currency? Well the market has sort of divided the candidates into 2 groups; one group wanting to stay in the Eurozone and the other wanting to leave. If a candidate that wants to stay wins then this will be decidedly positive for the pricing of the EUR. If a candidate that wants to leave wins then you can be assured that the EUR will take a nose dive. Macron and Fillon will be positive, while Le Pen and Melenchon (less so the latter) will be distinctly negative. If we see a Le Pen victory then I would not be surprised to see EURUSD test parity by the end of the week.
Monday, April 24, 2017
NZD and AUD: Monday is a bank holiday in observance of Anzac Day in both New Zealand and Australia so the Asia-Pacific will be lighter on volume than normal.
EUR: in the London session we see the release of the German Ifo Business Climate Survey but is likely to be overshadowed by the French election results. However, if there is a positive result to the election then this data set is more likely to be focussed on and might be worth paying attention to.
USD: FOMC Member Kashkari (voter, no stance) is due to speak at the University of California and the Claremont McKenna College in the US session. There is no expectation of audience questions and he is expected to stay on script. Central bank member speeches have taken a bit of a back seat lately because they have all been saying pretty much the same thing: a3-4 rate hikes in 2017 and a potential to start shrinking the balance sheet.
Tuesday, April 25, 2017
USD: In the US session we see the CB Consumer Confidence numbers. Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity so it can cause some market reaction if we see a deviation from the expected. Watch for any deviation positive or negative to have an equal impact on the USD.
Wednesday April 26, 2017
AUD: In the Asia-Pacific session we see Australian CPI and Trimmed Mean CPI q/q. The pricing of AUD has been largely controlled by the prices of copper and iron ore prices recently. The expectation is higher than the previous reading at 0.6% versus 0.5% so if we see a beat on the expectations we could see upside in AUD. A miss will likely cause a selloff in AUD.
CAD: In the US session Canadian Core Retail Sales m/m are expected. There is no expectation at the time of this writing but the previous reading was 1.7%. This is the change in the total value of sales at the retail level, excluding automobiles, and is important because it can give us some clues about future inflation trends. Employment data out of Canada has been stellar recently and any positive deviation from the expected would likely be welcomed to CAD buyers.
Oil, CAD: We also see the weekly release of the Crude Oil Inventories which if there is a significant enough deviation from the expectation can have a quite an impact on commodity currencies, especially the Canadian Dollar. Oil was getting beat up but as soon as Donald Trump started bombing Syria the fears of oil supply chain disruption pushed oil firmly back above the $50 level. However, last week saw a slide in oil prices back under the $50 level as concerns in the Middle East have taken a back seat.
AUD: RBA Gov Lowe is due to speak at the Renminbi Global Cities Dialogue Dinner in Sydney. This right now does not have a scheduled time so it could be late in the US session or early Asia-Pacific session tomorrow. Watch out for any comments about monetary policy that could drive the pricing of AUD.
Thursday April 27, 2017
JPY: In the Asia-Pacific session the Bank of Japan releases their monetary policy statement, outlook report, and the policy rate. The market is expecting no change to the policy rate but definitely thinks the BOJ needs to do something to get inflation moving higher. The BOJ have had almost 0% inflation for decades and it is becoming increasingly imminent that they need to do something major or they won’t get anywhere near their 2% inflation target for many years. The odd thing is that the BOJ are forecasting 2% growth by 2018 but the reality is that their own newly created way to measure inflation is at 0% and declining so I have no idea what silly juice these clowns are drinking to think they are going to get to 2% inflation in a year when they have not been able to accomplish this in 30 years. This data does not have a set time for release but it will be before the BOJ Press Conference. The press conference is where we tend to see some price volatility because sometimes there are unscripted questions and the answers catch the market off guard. We will have to wait and see how this plays out to guide our trading in JPY. This is followed by a press conference which will give clarity to the actions or inaction they have chosen to take.
EUR: In the early US session we see the European Minimum Bid Rate. This is the Interest rate on the main refinancing operations that provide the bulk of liquidity to the banking system in Europe. It’s expected to remain at 0.0% but there has been some positive Eurozone lately and we have seen some outside calls that the ECB might want to start tightening monetary policy. The ECB has dismissed this positive data as transient effects of higher energy prices.
This is followed by the ECB Press Conference. It’s about an hour long where a prepared statement is read then the conference is open to press questions. We will want to listen carefully to the prepared statement for any clues about how the ECB is feeling with their accommodative monetary policy and what they are thinking of doing next. The Q&A can lead to unscripted answers which could cause a lot of volatility. You can watch it on the ECBs webcast http://www.ecb.europa.eu/press/tvservices/webcast/html/index.en.html
USD: Core durable goods m/m out of the USA is also on the data slate. This has become a bit more important under a Trump presidency given how much weight he is giving to manufacturing jobs. It’s expected to come in at 1.5% which is lower than the 1.8% in last month’s reading. Any deviation to this could cause an equal reaction positive or negative on the USD.
Friday April 28, 2017
GBP: In the London session we get the preliminary GDP q/q. There are 3 versions of GDP each released a month after the other – Preliminary, Second Estimate, and Final. The Preliminary release is the earliest estimate of GDP and tends to have the most impact on the Pound. The headline is expected to come out at 0.4% and any deviation, positive or negative, could cause an equal reaction in the Pound. What I would caution here is that the Pound is currently subject to wide swings in sentiment, both positive and negative. What I will be watching for is any reading that is in line with the current sentiment on the Pound which changes day to day right now given the concerns around Brexit.
CAD: In the US session Canadian GDP m/m is released but at the time of this writing there are no expectations. The previous reading was 0.6% so anything better or worse might cause an equal reaction on the CAD. There has been great jobs data recently but the price of oil falling might start to weigh on GDP soon enough.
USD: we also see the Advance GDP q/q out of the US. There are 3 versions of GDP each released one month after the other – Advance, Preliminary, and Final. The Advance release is the earliest and tends to have the most impact on the price of the USD. One note here is that this is reported in an annualized format and not a quarterly format like most other countries report. What I will be looking for is any deviation from the headline expectation of 1.3% to guide my trades. This is much lower than the previous reading of 2.1%. A beat might set up buying opportunities on the USD against weaker currencies and a miss might provide a shorting opportunity against whatever currency is experiencing positive sentiment on the day.
As with all trading opportunities that come from economic data you need to assess the current sentiment on whatever currency it is that you are looking to trade. This is especially true if you are a day trader because being in line with the current sentiment on a particular currency is going to give you the absolute best chance of making a profit. Always look trade a currency with a positive sentiment against a currency pair with a weak or negative sentiment. In other words, buy strong against weak currencies and short weak against strong currencies and you will put yourself on the right side of the professional market most of the time.
Check out this free economic calendar. You can click on any event for a full description and history to get a better idea of each event.
As always, you need to stay in tune with the news that is hitting the wires and anything that I have written could be completely negated if something else major happens. This is just my thoughts on the weeks ahead and I will be monitoring the sentiment of the day to make sure my trades are intelligently managed based on what the market is telling me.
I hope you found some value in this and good lucking catching some good pips in the upcoming week!
If you want to learn more about what I do check me out at http://brandonturnerfx.com/