The Forex News thread

[Stormin_Norman]

I thought I would start a non specific currency thread to discuss upcoming news announcements and their possible effects on the currency market.

 

[Stormin_Norman]

Re: The News thread

I wrote up my review of the weeks news last night after reading some analyst's opinions.

From my AussieForex blog:

Its a pretty big week for US announcements.

* Home Sale Numbers
* GDP
* GDP Deflator
* Consumer confidence

Also Japanese inflation + NZ and Canadian Current Account figures.

What are the predictions of analysts on these figures?



The Global Forex Trading Blog thinks that the news this week will continue the bearish attitude towards the USD.

They also point out that "last week saw a string of negative data form Europe. Construction output and industrial new orders both took a pummeling while Italy issued some pretty negative industrial numbers and trade deficit. French consumer spending is looking rather ragged while business confidence in general is languishing... the downside for Europe still looks vulnerable and may well be highlighted again this week through the IFO & GfK surveys. "

The GFT blog goes onto suggest that this EUR weakness might see the EURUSD trading in a range for the next few weeks before a break out (they didn't bet on which way).

Home Sale Numbers are the first one up this evening (morning US time). Most expectations say that January home sales might be slightly down on the December. This does not bode well for the US economy if this is the case; December was a record month for Sale Numbers, resulting in about 9 months of excess supply in the housing market. That means falling house prices (Average house price $207k down from to $216k) and equity for middle class America; the drivers of the American economy.

If the US is to avoid recession the leading indicators such as house sales need to show a good bounce from their terrible figures over the last few months. Expectations based on house sales do not seem high.

There is also a New Home Sales indicator that is released on Wednesday. It will be watched for the same reasons as Home Sales.

Other commentators are suggesting that the US might be at the bottom of the decline because the US stock markets have been less bearish in the last few days. Talk about quick to call a recession and quick to declare it over. Technically the US has not even hit an economic recession yet (2 or more successive quarters of negative economic growth). If it is too early to confirm the US is in recession then surely it is too early to proclaim the current US economic difficulties are over.

But back to the week's news. There is also a US consumer confidence index due out Tuesday. If there is a negative news on the consumer confidence analysts believe there could be a large negative shift against the USD; where as positive news might only see a mild positive reaction. Analysts are saying confidence in the USD is jittery at the moment and bad news might put the scares through the markets resulting in a quite large downside for the USD.

On Thursday there is the big announcement of the US Revised GDP figures. The last quarter figures were disappointing @ 0.7% however the market was expecting them. No negative number is expected however, indicating the economic definition of a recession for the US had not begun to happen late last year.

The Deflator number that is applied to the GDP will be interesting to note too. A deflator towards 2% will signal a weaker USD, while a deflator towards 3% will signal a stronger USD. The deflation is essentially the measure of inflation applied to GDP to get a value of the real value of a country's production. Deflator figures have the same general meaning as inflation figures.

On Friday morning the Japanese release their CPI/inflation figures. This figure is important for the JPY as it will indiccate the Japanese inflation and the flexibility of the Japanese Central Bank to change interest rates. If inflation is high the Japanese Central Bank raising interest rates would have a major effect on the markets.

Anything over 1% CPI rate would suggest the Japanese could raise rates. A figure lower towards .5% would see that threat reduced dramatically. A rising Japanese interest rate would see the JPY strengthen. The Japanese not to long ago was in a deflationary situation (negative inflation), so a 1% rate could see a real chance of a Japanese rate rise.

Our New Zealand cousins have their trade balance released on Friday morning too (Before the Japanese announcement actually). The Kiwi, like the Aussie is at record highs against the USD. Figures around the $1 Billion mark for the Current Account are expected.

A lower figure (<$1B)might consolidate the Kiwi's high's against the USD; but a worse (>$1B) current account figure might see a significant fall in the NZDUSD because of the fact the currency is at record highs.

Lastly on Friday we have the Canadian Current account too. The Canadian Loony is like the Aussie and Kiwi - commodity currencies at record highs against the USD. So the Canadian Current Account figures should have a similar impact to the NZ ones.

The figures the market expects is quite wide. A Current Account balance of Zero would be expected. A surplus towards $1B would see a further strengthening of the CAD and a deficit of $1B would see a significant retracement of movement in the CAD as a result.

 

[tayser]

Re: The News thread

Next week's the big one, lots of interest rate statement announcements for scalpers to home in on after the trend has been set

 

[Stormin_Norman]

With US GDP numbers being released in an hour, the USD may trade flat until those numbers are released.

But which way then?

 

[Kauri]

With US GDP numbers being released in an hour, the USD may trade flat until those numbers are released.

But which way then?

the big one may be BB at 1500...

 

[Stormin_Norman]

the big one may be BB at 1500...

BB?

 

[Kauri]

BB?

Big Brother.... Ben Bernanke...

 

[Kauri]

and I wonder what this is...

President Bush To Hold Press Call At 15:05 GMT

Jeers
.........Kauri

PS
WASHINGTON (Reuters) - President George W. Bush will hold a news conference on Thursday at 10:05 a.m. EST, the White House said.
White House spokeswoman Dana Perino said Bush would ask lawmakers in the House of Representatives to pass legislation that would retroactively shield phone companies for participating in a warrantless wiretap program.
Perino said Bush would also talk about the need for funding troops in Iraq and he would urge Congress to quickly pass legislation to help homeowners avoid foreclosure.

 

[Stormin_Norman]

interesting.

bush wanting more money for the war, and for homeowners.

the homeowners bit might be interesting. it might restore a bit of lending confidence back into the international market. i read last week that only 20% of treasury bills were sold.

if the US government can convince the market the losses are over (and how i dont know!) then the USD should rally.

more government spending securing iraqi oil will put long term downward pressure on the dollar; but its the moral hazard question about home-owners that might be the big one.

i might go shortterm bullish for the USD on that perhaps? what do u think?

 

[Kauri]

interesting.

bush wanting more money for the war, and for homeowners.

the homeowners bit might be interesting. it might restore a bit of lending confidence back into the international market. i read last week that only 20% of treasury bills were sold.

if the US government can convince the market the losses are over (and how i dont know!) then the USD should rally.

more government spending securing iraqi oil will put long term downward pressure on the dollar; but its the moral hazard question about home-owners that might be the big one.

i might go shortterm bullish for the USD on that perhaps? what do u think?

the only thing I get bullish on when Bush talks is bomb shelters..... bythe way I think Paulson will be having a word or two too tutu
Cheers
..........Kauri

 

[Stormin_Norman]

there needs to be a Kauri translater

but i agree. the fedman's talk will be interesting. what's your feeling there, other then him dressing as a ballerina?

will it be more of the 'save the homeowners' stuff? is there anyway to follow his speech?

 

[Stormin_Norman]

RBA meeting tomorrow morning. Everyone is expecting a rise. Has it been fully priced in across all cross rates?

 

[ithatheekret]

there needs to be a Kauri translater

but i agree. the fedman's talk will be interesting. what's your feeling there, other then him dressing as a ballerina?

will it be more of the 'save the homeowners' stuff? is there anyway to follow his speech?

There's this thing about the growth versus yield , we see it reflected in the previous sideways action in the USD . The growth is a faith and hope thing , but the problem with the reasoning is that if the Fed get's down and ugly at 2% and the carnage in write off continues , they could be forced to go below further . Some models are very pro growth and funds are countering daily on the swaps , but there is an underlying weakness . It's showing up slowly and painfully in the countries that are pegged to the USD , they are copping it something wicked . I'll lay odds they knew it would swing from demand pull to cost push inflation and carried on regardless . Probably why they decided to ignore that side of the data way back when .

4% is sounding pretty good about now ............

 

[Kauri]

Private economists have/are losing respect for the Fed.. NABE shows only 48% support... from 72% in Aug...

What a surprise

Links... Augusta National...
and dj..
Cheers
..........Kauri

 

[ajb27]

Here is a site that shows what has happened during previous news releases:

http://www.forexnewspatterns.com

 

[Kauri]

Greg Ip writing in today"s WSJ states that the Fed is likely to cut by 25 BPS when they meet next week, but then may be ready to take a breather. Ip also says that the Fed will also put the option of standing pat on the table due to inflation concerns. Ip goes on to say: "If it does cut rates, the Fed could signal in the statement accompanying the decision an inclination to pause and assess the impact of seven interest rates in eight months."
The strong bounce in the USD in the past 24 hours has a lot to do with the market anticipating the end of the Fed easing cycle. The impact of such an event would have greater impact if the market perceives that the ECB will stay on hold.....

Cheers
...........Kauri

 

[Kauri]

Euro to 53's.. Skip tp 91-92's... Yen to 106ish, Gold to 850's, and I'm off to the poorhouse... maybe.. after all it's a Y day..

Cheers
...........Kauri

 

[>Apocalypto<]

chart based.

it's just poooooring out of the eur/usd!

This is really why I love FX trading no matter what there is always another opportunity around the corner!

Kauri and other EW traders check out that ending diagonal! hell of a set up!

Sorry all a tad off topic

 

[Kauri]

The dramatic plunge in JGB prices that forced a temporary trading halt has put pressure on the EUR/JPY. JGB futures have fallen over 2 points in one of the biggest one-day moves in over a decade. The sharp rise in Japanese yields is putting some pressure on the EUR/JPY.. maybe??

Cheers
..........Kauri

 

[Kauri]

The dramatic plunge in JGB prices that forced a temporary trading halt has put pressure on the EUR/JPY. JGB futures have fallen over 2 points in one of the biggest one-day moves in over a decade. The sharp rise in Japanese yields is putting some pressure on the EUR/JPY.. maybe??

Cheers
..........Kauri

The big story for Japan was the highest inflation results in 10 years which prompted a huge JGB sell-off with two Japanese banks said to be among the large sellers. The rise in JGB yields has actually seen the US-JGB spread narrow today, which may also help cap USD/JPY ahead of 105.00 .. Also a goodly amount of oppie defence around the 105 figure... and a block or three of Japanese exporter offers around the same level....

Cheers
............Kauri