Binary Options Daily Review – May 18, 2010
Binary Options Market Highlights
EURUSD edging lower
If you have been following our previous newletters about the Euro’s expected decline, you are probably in the money by now. The euro had dropped to $1.2341 as of 0450 GMT from $1.2392 in New York late Monday, and fell to Y114.13 against the yen compared with Y114.64. Traders said that U.S. banks and Japanese institutional players appeared to be behind the selling.
Crude Oil Settles at 5-month low, barely above $70
Crude-oil ended at a five-month low Monday amid concerns that Europe’s debt troubles will slow down the global economic recovery and, by extension, demand for oil. We anticipate Oil to weaken further should the U.S. Dollar continues to strengthen as expected, but we are keeping a keen eye on the Oil spill in the Gulf of Mexico which could trigger a possible rebound.
Gold ends higher; copper drops 6.5%
As we promised all week long in our newsletters, Gold continues its march higher. While Gold slowly edges higher and appears to be resting at these levels, we expect Gold prices to continue higher following the stronger U.S. dollar.
U.S. Stocks are now poised for a recovery
Blue chips erase a nearly 200-point slide with major U.S. stock indexes finishing modestly higher, after a late-session reversal led by technology companies overrode worries that Europe’s debt troubles would deny any chances of global economic growth.
AAPL, GOOG, MSFT lead the late session rally
Technology stocks put the brakes a on losses Monday, as the sector rallied late in a session highlighted by broad-market concerns about the state of the global economic recovery. Aadvances came from Google Inc. (GOOG 507.97, +0.44, +0.09%) , Intel Corp. (INTC 22.02, +0.13, +0.59%) , Microsoft Corp. (MSFT 28.94, +0.01, +0.03%) and Apple Inc. (AAPL 254.22, +0.40, +0.16%).
Binary Options Market Review 07-May-2010
Stock Binary Options News:
European shares dropped in a volatile session on Friday, with Germany’s impending vote on aid to Greece, the fallout from the turmoil on Wall Street and the likelihood of a hung parliament in the U.K. combining to fuel investor nervousness. The Stoxx Europe 600 fell 2.7% in late morning trade, while the Nikkei 225 dropped 3.1% in Tokyo.
U.S. stock futures on Friday rose after one of the most tumultuous sessions in history, with markets prepping for the release of payrolls data, news on the Greek rescue and who will lead Britain — and bracing for further volatility.
U.S. stocks ended with steep losses Thursday after an afternoon meltdown lopped nearly 1,000 points off the Dow Jones Industrials Average– its biggest intraday drop ever – before a comeback of sorts, as Europe’s troubles took hold on Wall Street and talk of errant trades exacerbated the swift selloff. The Dow Jones Industrial Average finished the day down 347 points, or 3.2%, and at one point blue chip Procter & Gamble was down 37%.
Meanwhile, the issue that seemed to have hit stocks at the beginning of the day — euro-zone stability — will be in the spotlight as Germany votes on its contribution to the joint European Union-International Monetary Fund 110 billion euro loan package for Greece. Citigroup strategists say the Greece issues could cause a global equities correction of between 10% and 20%.
Through Thursday, U.S. stocks are down 7.6% from April highs.
Currency Binary Options News:
The euro climbed 0.9 percent to $1.2737 as of 10:58 a.m. in London, paring its decline this week to 4.2 percent, the biggest weekly drop since October 2008, the month following the collapse of Lehman Brothers Holdings Inc. The 16-nation currency jumped 2.6 percent to 117.25 yen, paring its drop in the five days to 6 percent. The dollar advanced 1.6 percent to 92.07 yen. The pound dropped 1.7 percent to $1.4578, trading as low as $1.4476, the lowest level since April 2009.
The pound tumbled to a 13-month low versus the dollar as the U.K. parliamentary election failed to produce an outright winner, fanning concern the next government won’t be able to reduce the budget deficit fast enough.
The Australian dollar rose on speculation investors bought the currency after its drop to a three-month low. The Aussie climbed 0.8 percent to 89.21 U.S. cents, and advanced 2.6 percent to 82.25 yen.
Commodities Binary Options News:
Crude oil rose, snapping three days of declines, as the dollar weakened versus the euro and on speculation this week’s 10 percent fall may have been excessive. Futures are still heading for their biggest drop since July on concerns Europe’s debt crisis will derail the economic recovery. Prices touched an 11-week low of $74.58 a barrel in New York yesterday.
Gold holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, rose by the most in 15 months to the highest ever. Gold for immediate delivery surged to $1,210.70 an ounce yesterday, just 1.3 percent short of its peak of $1,226.56 an ounce reached Dec. 3. The metal was down 0.2 percent at $1,206 an ounce at 8:47 a.m. in Singapore.
Greece aid fails to calm nerves
European shares plunged on Monday on doubts that the bailout package for Greece will face political obstacles.
The first week of the month is always very busy: rate decisions in Australia and Europe and employment figures in Canada, New Zealand and the US – Non-Farm Payrolls – the king of forex. Add British elections as a special event, and you have a very exciting week. Let’s see the major events that expect us and their projected outcome and impact.
The US dollar index reached new highs, especially on worries from Europe. This week, the big flow of American indicators, with the best kept for last, is expected to continue the trend of dollar strength. I recommend reading my notes for Non-Farm Payrolls trading – this event is the most volatile release and should be handled with care.
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Weekly review by ForexCrunch.com
Major financial events this week:
1. American ISM Manufacturing PMI: Published on Monday at 14:00 GMT. The US manufacturing sector has shown very good signs of recovery. In the past 8 months, the result has been above 50, indicating economic expansion. After surprising last month and reaching 59.6, further gains aren’t expected this time. This will rock the markets.
2. Australian rate decision: Published on Tuesday at 4:30 GMT. The recent Australian indicators, such as employment and housing indicate that the economy is advancing more slowly. With CPI at 0.9% in Q1, Glenn Stevens doesn’t need to hike the rates soon – he’ll probably raise the Cash Rate to 4.50% a sixth rate hike. Note that a surprise could still occur – last month saw such a surprise. The wording of the RBA Rate Statement will move the Aussie on future expectations.
3. American Pending Home Sales: Published on Tuesday at 14:00 GMT. Existing and new home sales rose significantly more than expected recently. Also the last release of pending home sales, 8.2% rise proved that the housing sector is on the move. A smaller rise is predicted this time – 3.3%.
4. American ADP Non-Farm Employment Change: Published on Wednesday at 12:15 GMT. Jobs in the private sector proved to be loosely correlated with the government’s NFP. Last month, ADP reported a loss of 23K jobs in the private sector, while the NFP sowed a gain of 123K jobs in this sector and 162K altogether. Still, this release always rocks the markets. A rise of 29K is predicted now.
5. American ISM Non-Manufacturing PMI: Published on Wednesday at 14:00 GMT. Completing Monday’s release, the services sector is also advancing, although it’s slower than the manufacturing sector. Here, a score above 50 was seen for only three straight months. After jumping from 53 to 55.4 last month, only a small advance to 56.2 is predicted this time.
6. New Zealand employment data: Published on Wednesday at 22:45 GMT. Employment figures are important everywhere, and even more important when they are released only once a quarter. A drop of 0.1% was seen last month, within expectations, but the unemployment rate leaped to 7.3%, far worse than expected. A significant drop in unemployment is necessary for a rate hike in New Zealand, but the unemployment rate isn’t expected to move.
7. European rate decision: Published on Thursday at 11:45 GMT. Jean-Claude Trichet will leave the European Minimum Bid Rate at 1%. Despite seeing inflation picking up, European employment is still problematic and the debt problems make it a very bad timing for such a move. The markets will mostly shake on Trichet’s words in the press conference due 45 minutes after the release. Any comment about the debt issues will rock the beaten Euro.
8. American Unemployment Claims: Published on Thursday at 12:30 GMT. The last sign before the Non-Farm Payrolls is a significant one – highly correlated. We’ve seen an alarming rise in this weekly release in the middle of April, and then we’ve seen it improving. Another improvement, from 448K to 442K will raise the expectations for Friday.
9. Ben Bernanke talks: Begins speaking on Thursday at 13:30 GMT. Following the mellow rate decision and the expected growth rate, will Bernanke lower the expectations from the economy? This speech, in a conference in Chicago, comes less than a day before the Non-Farm Payrolls and could shake the markets.
10. British elections: Thursday. Results due at 21:00 GMT. General elections will be held in Britain throughout the day. Gordon Brown’s ruling Labour party, James Cameron’s Tories and Nick Clegg’s Liberal Democrats are quite close to each other. A decisive result in the exit polls will help the Pound. The exit polls might not be decisive enough, so the uncertainty might continue until the official results are due. A hung parliament is feared.
11. Canadian employment data: Published on Friday at 11:00 GMT. After many excellent months, Canada’s latest employment change rose by “only” 18K last month, below expectations. The unemployment rate remained at 8.2%, also a small disappointment. This time, both numbers are predicted to make small advances, helping the loonie in the battle for parity.
12. Non-Farm Payrolls: Published on Friday at 12:30 GMT. The king of forex was finally positive last month – a rise of 162K jobs boosted the dollar and created hopes for a sustainable recovery. The unemployment rate remained at 9.7%. Another drop in the unemployment rate and more job gains are expected this time.
Binary Options Daily – May 3, 2010
Currency news today is full of huge headlines, as Greece reached an agreement under which it would accept a bailout package of direct loans from euro-zone countries and the International Monetary Fund, media reports on Sunday said. The reports put the potential value of that package at 100 billion to 120 billion euros ($132.5 billion to $159 billion) over three years. As a result, the European Central Bank announced on Monday it would suspend the minimum credit-rating threshold for all Greek government debt, a day after Athens agreed to stringent austerity measures in return for a 110-billion-euro bailout package from its euro-zone partners and the International Monetary Fund. “This positive assessment and the strong commitment of the Greek government to fully implement the program are the basis, also from a risk-management perspective, for the suspension announced herewith,” the ECB said. European stocks opened mostly lower on Monday, indicating sentiment that inflation may be the long-term implication of this agreement. Expect the USD pairs, especially the EURUSD to react to these news. Trade the news at StartOptions.com using Binary Options on the EUR/USD.
In market news today, expect airline stocks, like JetBlue, to move, on news that Boards of Continental and United Airlines parent UAL reportedly approve their long-awaited, $3.2 billion all-stock deal to create world’s largest air carrier. However, overall sentiment is that due to May’s tendencies, Goldman, European debt issues will make it tough to sustain momentum. After climbing in April, the U.S. stock market starts May on less-certain footing, given the new month’s spotty record and stocks’ retreat over the past week. As a result, stocks may take a hit over the next few days, a great time to short the market using Binary Option Puts.
How to trade Google into its earnings report tonight
Here is a great post about trading Google into earnings:
http://blogs.marketwatch.com/cody/2010/04/15/how-to-trade-google-into-its-earnings-report-tonight/
StartOptions.com Binary Options Market Review-March 08-12
After the NFP, the upcoming week is somewhat less busy. Nevertheless, rate decision in Switzerland and New Zealand, job figures from Australia and Canada and two major American releases on Friday among other events, will provide lots of action. Here’s the weekly outlook.
On Monday and Tuesday, there are many events on the calendar, but not too many important ones. The effect of the Non-Farm Payrolls will still strongly felt at the beginning of the week, until fresh important indicators are released. Let’s start:
This Market Weekly Outlook was brought to you by our partner ForexCrunch.com.
1. Swiss Retail Sales: Published on Monday at 8:15 GMT. Switzerland enjoys a strong and stable economy with confident consumers. Last month, sales volume jumped by 4.7%, a very strong pace. This time, a rise of 1.6% is predicted. This will have a strong impact on the Swissy as well as a collateral effect as the beginning of the week doesn’t contain too many figures.
2. British NIESR GDP Estimate: Published on Wednesday at 15:00 GMT. NIESR is usually more accurate than other economists in understanding the economy. The upcoming release will show the growth rate for the three months that ended in February, as Britain hardly got out of recession at the end of 2009. This tends to have a long term impact on the Pound.
3. American Federal Budget Balance: Published on Wednesday at 19:00 GMT. It’s no secret that the US government owes a lot of money. The size of the deficit fell to more “normal” levels last month – only 40 billion. But this time, it’s predicted to surge back to 200 billion, weighing on the dollar.
4. New Zealand rate decision: Published on Wednesday at 20:00 GMT. New Zealand has the second highest interest rate among the major currencies, 2.5%, but it didn’t follow its neighbor Australia and didn’t raise the rates. Also now, Alan Bollard is expected to leave the Official Cash Rate unchanged but may hint about future hikes in the RBNZ Press Conference. This decision has an impact beyond New Zealand and impacts also the Aussie.
5. Japanese Final GDP: Published on Wednesday at 23:50 GMT. According to the initial release, the land of the rising sun experienced a stronger growth than expected – 1.1% in Q4. This is expected to be revised to the downside – 1.0%, shaking the Japanese Yen against the dollar and all the Yen crosses.
6) Australian employment data: Published on Thursday at 00:30 GMT. In the past four months, Australian employment figures were fantastic, beating expectations each time. The predictions remain cautious: Employment Change is expected to rise by a modest number – 15,300 and the Unemployment Rate is expected to remain unchanged at 5.3%, after dropping from 5.5% last time.
7. American and Canadian Trade Balance: Published on Thursday at 13:30 GMT. This double-feature release in Canada and the US always triggers action in USD/CAD. The American deficit is expected to remain high at around 40 billion, while Canada is expected to turn from a deficit of 0.2 to a surplus of 0.4 billion.
8. American Unemployment Claims: Published on Thursday at 13:30 GMT. Together with trade balance, the first jobless claims report after the Non-Farm Payrolls will probably show an improvement – a drop from 469K to 452K, pushing the dollar higher.
9. Swiss rate decision: Published on Thursday at 14:00 GMT. The Swiss National Bank makes rate decisions on the Libor rate only once a quarter. The rate is expected to remain unchanged at 0.25%. At the same time last year, the central bank accompanied the rate decision with a massive intervention. They now intervene all the time, not only on rate decisions.
10. Canadian employment data: Published on Friday at 12:00 GMT. Also Canada experienced an improving job market. Last month, the unemployment rate surprised by falling to 8.3%. This is expected to remain unchanged. The superb employment change figure showed a rise of 43,200 jobs last time. It’s expected to be followed by a gain of 17,500 jobs this time. This will rock USD/CAD and also impact the greenback elsewhere.
11. American Retail Sales: Published on Friday at 13:30 GMT. Sales were stronger than expected in January, but the freezing month of February probably weighed on this growth in the volume of sales. A drop of 0.1% is predicted in retail sales and a drop of 0.1% in core retail sales.
12. American Consumer Sentiment: Published on Friday at 15:00 GMT. According to the University of Michigan, consumer confidence has been stable in the past three months, remaining almost unchanged at a score of 73.6. A small rise to 74.3 points is expected this time. The timing of the release, close to the close of the markets, promises lots of action around this release.
Best Regards,
StartOptions Team
Disclaimer: Binary options trading might carry potential rewards, but also potential risks. You must be aware of the risks and willing to accept them in order to trade in the financial markets. Don’t trade with money you can’t afford to lose.
Greece Debt crisis shaking again European economy – March 1-5 2010
The first week of the month is always busy in forex trading. Apart from Non-Farm Payrolls, we have 3 GDP releases and 4 rate decisions from all over the world, and many other major events. Let’s see what’s awaiting us on the crowded calendar.The first week of the month is always busy in forex trading. Apart from Non-Farm Payrolls, we have 3 GDP releases and 4 rate decisions from all over the world, and many other major events. Let’s see what’s awaiting us on the crowded calendar.
1. European Unemployment Rate: Published on Monday at 10:00 GMT. One of biggest burdens on Europe is unemployment rate, standing at 10%, double digits, for two months. In Spain, the number reaches 20%. A drop in this figure is essential for moving the interest rate, but it will probably take the other direction and rise to 10.1%.
2. Canadian GDP: Published on Monday at 13:30 GMT. Canada’s unique monthly GDP has posted three positive months, with the last print being better than expected 0.4%. The upcoming release is expected to show another 0.4% rise and completes the data for Q4 of 2009 and should provide another boost for the Canadian dollar.
3. American ISM Manufacturing PMI: Published on Monday at 15:00 GMT. This important purchasing managers’ index has been on the rise and jumped up to 58.4 points last month, significantly better than expected. It’s now predicted to ease to 57.9 points.
4. Australian rate decision: Published on Tuesday at 03:30 GMT. After last month’s disappointing decision not to raise the rates, there have been different hints about the upcoming decision, most of them leading to a fourth rate hike, to 4%. This should help the Australian dollar, that was hurt by risk aversion trading.
5. Swiss GDP: Published on Tuesday at 06:45 GMT. Switzerland was relived of 3 quarters of contraction in Q3 of 2009, when the economy grew by 0.3%. This stable recovery is expected to continue and push the Swissy upwards, despite the central bank’s effort to bring it down.
6) Canadian rate decision: Published on Tuesday at 14:00 GMT. The BOC is expected to leave the Overnight Rate unchanged at 0.25%, and again, the focus will be on the rate statement. The BOC was very clear about the timing – June 2010. Some expected a declaration about an earlier move, but this didn’t happen in previous decisions. Will it happen this time?.
7. American Beige Book: Published on Tuesday at 19:00 GMT. Two weeks before the FOMC meeting which decides on rates, this overview of the economy is released to the public. This could provide a hint about the next decision, or the next moves by the Fed, such as the recent surprising mini rate hike.
8. Australian GDP: Published on Wednesday at 00:30 GMT. The Australian economy enjoyed an improving job market throughout the fourth quarter of 2009, and this should be reflected in the GDP as well, showing the strength of the Australian economy. Q3 was disappointing, with a small growth rate of 0.2%. A strong growth rate of 0.9% is now expected.
9. American ADP Non-Farm Payrolls: Published on Wednesday at 13:15 GMT. This release always shakes the markets, as it’s sometimes considered to be a strong indicator for the Non-Farm Payrolls. Last month it showed a loss of only 22K jobs, better than expected – but the Non-Farm Payrolls were worse than expected. So this figure should be handled with care. It’s expected to show a small drop of 9K.
10. American ISM Non-Manufacturing PMI: Published on Wednesday at 15:00 GMT. In the non-manufacturing sectors, the situation isn’t as good as in manufacturing. ISM showed a score of only 50.5 points, hardly above the critical 50 point mark that indicates economic expansion. This figure fell short of expectations in the past four months. A small rise to 51 is expected.
11) British rate decision: Published on Thursday at 12:00 GMT. Mervyn King hurts the Pound every week. This time, his chance will come at the decision about the Official Bank Rate which will probably stay at 0.5%. Also the Quantitative Easing program (Asset Purchase Facility) isn’t predicted to move from the 200 billion pound already allocated to it, but there might be hints about its renewal.
12. European rate decision: Published on Thursday at 12:45 GMT. Just 45 minutes after the British decision, Jean-Claude Trichet’s ECB will announce the European Minimum Bid Rate. Also here, no changes are expected, but the complementary ECB Press Conference will supply lots of action. The Greek crisis will still be in the limelight.
13. American Unemployment Claims: Published on Thursday at 13:30 GMT. Providing the last hint about the Non-Farm Payrolls, this weekly release is expected to show some improvement after last week’s disappointing figure – a rise to 496K, a number not seen in a long time. It’s expected to drop back to 474K.
14. American Pending Home Sales: Published on Thursday at 15:00 GMT. This figure returned to stability last month, rising by 1%, but this time it’s predicted to fall again as the housing sector continues to suffer, as we see in the new and existing home sales numbers. A rise of 1.6% is expected.
15. Non-Farm Payrolls: Published on Friday at 13:30 GMT. After two more months of negative numbers, the king of forex, the predictions now turned negative. Last month’s releases were confusing, as 20K jobs were lost, but the unemployment rate dropped significantly from 10% to 9.7%. Will it be confusing again? Or will we see finally see good numbers? This event will impact forex trading before and after the event, for quite some time. Current expectations are for another loss of jobs: 35,000. Also the unemployment rate is expected to be bad, edging up to 9.8%.
This Market Weekly Outlook was brought to you by our partner ForexCrunch.com
StartOptions.com Forex Weekly Outlook – February 22-26
After another wild week and a very surprising rate hike, the last week of February also has its share of big events. Bernanke will continue to dominate the scene with two testimonies and revised GDP in the UK and the US will supply an exciting end to the week. And there are more market moving events. Here’s the weekly outlook.
Ben Bernanke stole the show with a surprising hike of the discount bank rate. This came after the close of the American stock markets but forex trading continues all the time – the dollar leaped. Some currencies took a bigger hit than others. This event will continue to dominate trading on Monday when there aren’t any major releases.
1.German Ifo Business Climate: Published on Tuesday at 9:00 GMT. This wide survey of 7,000 businesses has a strong impact on the Euro. Contrary to the ZEW report that is recently weak, this indicator has been rising steadily in the past year, edging up each time. From last month’s 95.8 score, it’s predicted to tick up to 96.3.
2.American CB Consumer Confidence: Published on Tuesday at 15:00 GMT. Consumer confidence impacts sales and the whole economy. In the past three months, this indicator rose from the low level it fell to, and also revisions to previous releases have been to the upside. This time, it’s predicted to drop from 55.9 to 55 points. This has a wide impact.
3.New Zealand Inflation Expectations: Published on Wednesday at 02:00 GMT. New Zealand has a high interest rate, but expectations for a rate hike like its neighbor Australia haven’t been met. A rate hike depends a lot on prices. This quarterly release will show the direction of inflation and a possible rate hike. Last quarter, expectations rose from 2.3% to 2.6%. Now they are predicted to edge up some more.
4.Ben Bernanke testifies: Happens during Wednesday at 15:00 GMT and Thursday at 14:00 GMT. After Bernanke’s shocking mini-rate hike that was made off the main hours, he’ll make his semi-annual report in broad daylight in front of two committees in Washington DC. Although he might use confusing language, his words will shake the markets.
5.American New Home Sales: Published on Wednesday at 15:00 GMT and overshadowed by Bernanke. New Home Sales took a big dive two months ago and showed everybody that the housing sector depends on government aid. It hasn’t returned to previous levels. From 342K, sales are predicted to edge up to 350K this time.
6.American Durable Goods Orders: Published on Thursday at 13:30 GMT. Orders have been revised to the upside in the past month, from 0.3% to 1%. Also Core orders have been revised to 1.4%. The positive trend is expected to continue, with a rise a rise of 1.6% in orders and 1.2% in core orders. This figure doesn’t touch the consumers, but has a long term impact on the economy.
7.American Unemployment Claims: Published on Thursday at 13:30 GMT and overshadowed by goods orders. The American job market is still fragile, and the number of claims refuses to leave the area it is in in the past months. Last week’s 473K is predicted to be followed by 466K this time. A number under 430K or above 480K will shake the markets.
8.British Revised GDP: Published on Friday at 9:30 GMT. Did Britain really return to growth? That’s a big question. The initial release for Q4 finally showed growth – but only 0.1%. Expectations are optimistic and a revision to 0.2% is expected. According to the unofficial NIESR GDP estimate, the economy did grow by only 0.1%. A drop to 0% growth or another quarter of contraction will be devastating for the Pound.
9.Swiss KOF Economic Barometer: Published on Friday at 10:30 GMT. This indicator, locally called Konjunkturbarometer, is an important composite index that usually reflects the situation of the Swiss economy quite well, and has a strong impact. From 1.77 points it’s predicted to rise to 1.77 points this time.
10.American Prelim GDP: Published on Friday at 13:30 GMT. The best is kept almost for last. There were many doubts about the rapid American growth that was reported in the first release. The second release is predicted to show only a small downward revision: from 5.7% to 5.6% in Q4 of 2010. The markets will surely shake with this release. A long term rise in the dollar’s value cannot happen without an improvement in jobs as well.
11.American Existing Home Sales: Published on Friday at 15:00 GMT. This release will be somewhat overshadowed by the GDP publication. Similar to new home sales, this figure, that accounts for more sales, is also volatile and is dependent on government aid. After a drop of 1 million sales last month, stability is expected this time – a tiny rise from 5.45 to 5.51 million.
This Market Weekly Outlook was brought to you by our partner ForexCrunch.com.
Click here to Trade Binary Options with our partner StartOptions.com
Best Regards,
StartOptions Team
Disclaimer: Binary options trading might carry potential rewards, but also potential risks. You must be aware of the risks and willing to accept them in order to trade in the financial markets. Don’t trade with money you can’t afford to lose.
Greek Economy Spells Trouble For Eurozone – Market Weekly Outlook – February 15-19
A volatile week full with hope and fear comes to an end with currencies returning to the same spots. The week ahead contains a nice mix of events from all over the world: a rate decision in Japan, employment data from Britain, and lots of American numbers, with important inflation data to close the week. Here’s an outlook for the major events in the week ahead.
The Greek crisis is far from over. While Greece is only a small country at the edge of the Euro-zone, the implications of debt and the ways to deal with it have an impact on many other troubled countries in the region that is on the brink of new recession. This also has a wider impact – debt problems trigger risk aversion trading – dollar buying. OK, let’s start the review:
| 1.Japanese GDP: Published on Sunday at 23:50 GMT. As of Q2 of 2009, Japan is out of recession. The growth rate has dropped to 0.3% in Q3, after being first reported at 1.2%. Apart from slow economic growth, Japan historically suffers from deflation, a problem that won’t be solved soon. Growth of 1% is expected now.
2.British CPI: Published on Tuesday at 9:30 GMT. This important indicator has risen sharply in recent months. The last print was 2.9%, and the upcoming number is predicted to be 3.6%, above the government’s target. Mervyn King dismissed the inflation threats and signaled that no rate hike is underway. Will he continue this stance once again? Rising inflation isn’t seen elsewhere, and it will be interesting to see the impact on the whole market.3.ZEW Economic Sentiment: Published on Tuesday at 10:00 GMT. This is a major market mover – especially the release for Germany. In the past months, it has deteriorated sharply, going hand by hand with the Eurozone’s troubles, and Germany’s stagnant economy. It’s expected to dive again – this time from 47.2 to 41.9 points. 4.American TIC Long-Term Purchases: Published on Tuesday at 14:00 GMT. Foreign investment in the US has made a leap last month, rising from 20 to 126 billion dollars. This confidence in the US economy and the dollar probably won’t repeat itself, at least not so strong – 50 billion is predicted this time. A stronger number will boost the dollar. 5.British Employment Data: Published on Wednesday at 9:30 GMT. The number of unemployed people made a turnaround in Britain two months ago and the positive trend continued last month as well. The Claimant Count Change, an early an important indicator is expected to show another “positive loss” of unemployed people this month – 14.3K. The British Unemployment Rate is predicted to remain stable at 7.8%, but economists were wrong with this figure over and over again. Positive numbers will also push towards a rate hike. 6.American Building Permits: Published on Wednesday at 13:30 GMT. The housing sector was one of the main contributors to the downturn in the economy, and is recovering slowly. The annualized number of 0.65 million is predicted to be followed by a drop to 0.62 million. The economy cannot make a significant advance without a healthy housing sector. Also note the housing starts published at the same time. 7.FOMC Meeting Minutes: Published on Wednesday at 19:00 GMT. Although the wording of the statement hasn’t changed, there was one surprise in the recent American rate decision – one member voted to change the wording and start signaling a future rate hike. When the minutes will be revealed, we’ll get to see if other members also began thinking out loud about such an option. 8.Japanese Rate Decision: Published on Thursday, in the early hours. No rate hike is expected in Japan, which suffers from deflation. The Overnight Call Rate is predicted to remain unchanged at 0.1% but the views that that will be expressed about the economy by the BOJ usually move the Yen. 9.American PPI: Published on Thursday at 13:30 GMT. Producer prices aren’t always a market mover, but this time, a rise of 0.8% is predicted, much higher than last month’s 0.2% rise and much higher than previous months. Such a rise might cause Bernanke to rethink the “extended period” wording in the FOMC Statements. 10.American Unemployment Claims: Published on Thursday at 13:30 GMT. After a surprise last week – a drop to 440K, the drop in jobs seen in the NFP can be forgotten. A small rise to 445K is predicted this time. Only another drop, preferably below 430K can boost the dollar. 11.American Philly Fed Manufacturing Index: Published on Thursday at 15:00 GMT. This important gauge has seen 6 months of improving conditions, but last month was disappointing with a drop to 15.2 points. A steady rise to 17.2 is predicted this time. 12.American CPI: Published on Friday at 13:30 GMT. The major inflation figure closes the week. Contrary to the expectations from the PPI, consumers probably didn’t see a significant rise in prices. CPI is predicted to rise by 0.3% and Core CPI, an indicator that the Federal Reserve watches, is expected to rise by 0.2% – very stable. A jump will make the markets jump, seeing another crazy Friday. For USD/CAD traders, note that the Canadian CPI is published around the same time. This Market Weekly Outlook was brought to you by our partner ForexCrunch.com. Click here to Trade Binary Options with us. Best Regards, Disclaimer: Binary options trading might carry potential rewards, but also potential risks. You must be aware of the risks and willing to accept them in order to trade in the financial markets. Don’t trade with money you can’t afford to lose. |
StartOptions.com Market Weekly Outlook – January 25-29
A busy week is ahead of us: rate decision in the US, Japan and New Zealand and GDP releases from the US, UK and Canada are part of an eventful week. Will we see more dollar strength? Here’s an outlook for the last week of January.
Beginning on Wednesday, the World Economic Forum meets in Davos, Switzerland. In their 4-day annual meetings, many central bankers, senior politicians and business leaders from all over the world chit-chat with reporters and also make official and moving statements. Their sporadic comments can shake the markets during most of the week.
Monday, January 25th: Australian PPI provides a strong start to the week, as this is a quarterly figure that has a strong impact on the Aussie.
American Existing Home Sales are expected to post a big drop after two strong months, and fall to 6.04 million.
Tuesday, January 26th: The Bank of Japan makes a rate decision. While the Overnight Call Rate isn’t expected to move from 0.1%, but the Monetary Policy Statement could sure shake the Yen, especially if economic forecasts are changed.
German Ifo Business Climate is an important survey for the Euro. It’s expected to continue the steady rising trend and edge up to 95.3 points. Last week’s survey, from ZEW, was bad and sent the Euro down.
Britain probably finished the recession. Prelim GDP for Q1 is expected to show growth of 0.4%. The unofficial number from NIESR talked about 0.3% growth, and they are usually correct, so there’s a good reason to be optimistic. Right after the release, Mervyn King will be speaking.
Last week King weighed on the Pound. A volatile time for the Pound.
In the US, the year-over-year S&P/CS Composite-20 HPI is expected to show a smaller drop in the prices of homes, 4.9%. The more important figure is the CB Consumer Confidence, that recovered from a big fall, and is now expected to climb to 53.7 points.
Wednesday, January 27th: Australian CPI is a quarterly release and has a strong impact on policymakers. After a modest rise of 0.1%, Q4 is expected to show a rise of 0.4%. A stronger rise is necessary to push the Aussie higher.
American New Home Sales are expected to recover from last month’s big fall, and rise to 372K. This will be a warmup for the big event.
Bern Bernanke is expected to leave the interest rate unchanged. The Federal Funds Rate will probably stay at a maximum level of 0.25%, and traders will focus on the usually confusing FOMC Statement. Last month, it took the market 6 hours to digest the statement, which seemed balanced at first. As they focused on the upside of the statement, cautious signs of recovery, the dollar rose. But the message sure was confusing.
Also in New Zealand we have a rate decision. The hot air came out of the balloon with low CPI in New Zealand and China’s tightening measures. So, the Official Cash Rate will probably remain unchanged at 2.5%. Hints for future policy will be provided in the RBNZ Rate Statement.
Thursday, January 28th: American Durable Goods Orders are expected to jump by 2.1% after remaining almost unchanged last month. Core Durable Goods Orders, no less important, are expected to do the opposite and rise by 0.4% after a leap last month.
Unemployment Claims that disappointed last week, are predicted to go back down to 452K.
In New Zealand, both Building Consents and Trade Balance will impact the kiwi, with the latter expected to show a smaller deficit this time.
Near the end of the day, Japan will be releasing Household Spending which is expected to rise and Tokyo Core CPI which is still expected to show an annual drop in prices – 1.8%.
Friday, January 29th: European Unemployment Rate is expected to be bad once again. After reaching 10% last month, it’s predicted to rise to 10.1%.
In Switzerland, the KOF Economic Barometer will move the Swissy.
Canada releases its monthly GDP, which is expected to show a 0.3% growth, better than the previous month. Last week’s rate decision hurt the loonie. USD/CAD will shake during this time, especially with the next release.
American Advance GDP for Q4 holds high expectations: an annual growth rate of 4.6%. After exiting recession in Q3 with a 2.2% growth rate, things are expected to get better in Q4. This release will shake the markets.
Chicago PMI is predicted to post a small drop, and the Revised UoM Consumer Sentiment is expected to be revised to the upside. Both events will be overshadowed by the Advance GDP release.
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