Daily Alert: For Friday 5th February 2016

Mark Nugent 2016 H1, Daily Alert, February 2016

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Fundamentals and Sentiment

(Video below.)

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.

Tomorrow’s Calendar

  • US – NFP and Average Hourly Earnings

See you on Monday with the Weekly Review and Outlook.
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