Weekly Review and Outlook 10th July 2017

Mark NugentJuly 2017, Trading Plan

Weekly Forex Review – Week Commencing 3rd July 2017

Economic Calendar

Over the weekend:

Baker Hughes Rig Count (30/Jun): Oil rigs declined by 2 at 756 (Prev. 758) to snap a 23-week run of adding rigs. (Newswires)

Political uncertainty highlighted overnight; with USD/JPY initially suffering from a historical defeat for Japan’s Prime Minister Abe’s Liberal Democratic Party, implying possible trouble for the Premier.

Monday

GBP Manufacturing PMI misses but remains above 50 (54.3 vs 56.4).

Tuesday

RBA kept its Cash Rate Target unchanged at 1.5% as expected.

RBA statement:

– Judged unchanged policy is consistent with growth and inflation targets
– Wage growth remains low and likely to continue for a while
– House prices are rising briskly in some markets
– indicators of labor demand remains mixed
– Rising AUD complicates economic adjustment

North Korea conducted another missile launch which landed in Japan’s exclusive economic zone. There were also reports that the missile greatly exceeded altitude of 2500KM and may have been an intercontinental ballistic missile, while North Korea is to issue a major announcement at 0730BST/0130CDT. (Yonhap/Newswires)

BoC Governor Poloz says inflation should be well into an uptrend sometime in H1 18, according to Handelsblatt. (Newswires)

UK Construction PMI was essentially on target (54.8 vs 55.0).

Hawkish commentary continues out of the BoE, with yesterday’s comments from Saunders sends yet another signal that the BoE could be ready to hike rates back to 0.50%, stating that UK households should prepare for rates to go higher at some point, adding that there is no sense in suggesting that policy should remain on hold because Brexit negotiations are ongoing.

Confirmation that North Korea’s missile test was formally classed as an intercontinental ballistic missile test has clearly worried markets, with the US and South Korea saying war cannot be ruled out.

Wednesday

UK Services PMI was on track at 53.4 vs 53.6.

FOMC Minutes were underwhelming:

• Most policymakers viewed recent softness in inflation as having little impact on inflation trend.
• Several policymakers wanted to announce start of balance sheet trimming within a couple of months, others wanted to wait until later in 2017; Yellen suggested announcing the new approach to balance sheet plan at the June meeting.
• Reaction to the minutes was muted as they did little to suggest the Fed was on course to alter the rate path trajectory or change the plans to unwind the balance sheet.

Thursday

A mixed bag on AUD Trade balance with the current print being positive (2.47B vs 1.00B) but the prior number suffering a significant downwards revision (0.09B from 0.56B).

Friday

UK Manufacturing Production missed (-0.2% vs 0.5%).

In the US, Average Hourly Earnings missed (0.2% vs 0.3%) and Non-Farm Payroll beat expectations (222K vs 175K).

Market Reaction

The USD was flat across the week. There was little directional movement in global equity indices. Oil had an up-then-down week, ending down. Gold drops. The US 10 Year yield rose over the week. The JPY was uncertain before weakening on Thursday and Friday, breaking through support. The EUR rises to resistance. The GBP is range-bound and the only excitement in the commodity currencies is a rise in CAD on Friday on a rate hike expectation on 12th July.

Trading Plan

No trades closed last week. My AUDUSD remains open with stop at breakeven. Month-to-date performance is +0.0% and year-to-date performance is +9.4%.

Weekly Forex Outlook – Week Commencing 10th July 2017

Economic Calendar

Over the weekend:

Baker Hughes Oil Rig Count (Jul) W/W 763 (Prev. 756).

In the news:

Nothing of note.

Mon – Nothing

As of the time of writing, equities are up and the JPY is weakening. We are risk-on.

Tues – Nothing

Wed – GBP Average Earnings. CAD Overnight Rate, Rate Statement and Monetary Policy Report. Fed Chair Yellen due to testify on the Semiannual Monetary Policy Report before the House Financial Services Committee, in Washington DC.

Thurs – Fed Chair Yellen’s testimony continues.

Fri – US Headline and Core Retail Sales and CPI.

[mepr-hide if=”loggedin”]

VIP Club members please [mepr-login-link] to access your Weekly Review and Outlook video.

For VIP Club members, this commentary is augmented with a video where I discuss the Trading Plan for the forthcoming week. If you would like a free one month trial to the VIP Club you can find out more HERE.

[/mepr-hide]

[mepr-show if=”loggedin”]


Here is your Weekly Review and Outlook video.

I discuss last week’s trades at 4:50 and this week’s trading plan at 10:00.

You can download the video HERE. If it starts to play in your browser, right click on it and select “save video as” or similar and it will download to your machine.

The themes for this week’s trading can be found HERE.

Profiles for this week’s trading ideas can be found HERE.


There is an archive of all VIP Club member’s content on the VIP Club page.

[/mepr-show]