Fundamentals and Sentiment
The Vix continues to float just above 20. Oil is up around 20% on its mid-January lows. Regarding stock markets, mixed news in Japan and Hong Kong; Chinese markets and all Western markets up. All commodity currencies up. Clearly risk-on.
UK Super Thursday was interesting. The sole dissenting voice on the MPC decided to toe the line producing a unanimous 9-0 decision to keep rates at 0.5%. QE was kept at £375B.
GDP was forecast to be 2.2% in 2016 vs previous forecast of 2.5%, 2.3% in 2017 and 2.4% in 2018.
Wages year-on-year were estimated to have grown by 1.75% in 2015 and is forecast to grow by 3.0% in 2016 and 3.75% in 2017.
CPI year-on-year was estimated to have grown by 0.8% in 2015 and is forecast to grow by 1.9% in 2016 and 2.2% in 2017.
Regarding the Euro Zone, earlier today Draghi commented that “no doubt we need to adopt a more expansionary policy…”
Critical Trades for this week
USDCAD – stopped out largely due to a weak USD after yesterday’s poor ISM result.
USDJPY – still sitting in the buy zone after a further drop. I will look to go long on a breakout of a sideways period or a strong move up in the D1 or H4 chart.
EURUSD – Gained today on weak USD.
USDSGD – Dropped today on weak USD.
GBP weakness – did not trade as news was neutral/bullish.
- US – NFP and Average Hourly Earnings
See you on Monday with the Weekly Review and Outlook.
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