Daily Alert: For Friday 5th February 2016

Mark Nugent 2016 H1, Daily Alert, February 2016


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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