Weekly Review and Outlook 3rd July 2017

Mark NugentJuly 2017, Trading Plan

Weekly Forex Review – Week Commencing 26th June 2017

Economic Calendar

Over the weekend:

BoJ Summary of Opinions from June 15-16th said that Japan’s economy has been turning towards a moderate expansion and that the most effective way to reach inflation goal is to continue with the current monetary policy. (Newswires)

Fed’s Bullard (Non-Voter, Dove) said Fed can wait and see impact of fiscal policy and tax reform before hiking. Bullard added that there is potential balance sheet move could come at a non-hike meeting and that he sees the Fed balance sheet being cut to the low USD 2trln mark (from around USD 4.5trln) within 5 years. (Newswires)

Monday

Gold drops on a “fat-finger” event.

Tuesday

Draghi positive on Euro economy.

Fed Chair Yellen (Dove) stated rates are to remain low as Fed normalises policy and reiterated a gradual hike trajectory. Yellen also commented that inflation has continued to run below objectives and that they are not getting a consistent story on inflation. (Newswires)

Fed’s Kashkari (Voter, Dove) stated there is no rush to increase rates and that there may still be slack in the labour market. (Newswires)

Wednesday

BoE Gov Carney hints at rate rise, reversing previous positiob of only a few days ago.

US Crude Oil inventories saw a build of 0.1M vs an expectation of a drawdown of 2.1M.

Thursday

US Final GDP beat expectation (1.4% vs 1.2%).

Global equities down – maybe Q2 profit taking.

Friday

Tokyo Core CPI missed at 0.0% vs expectation of 0.2%.

UK Current Account beat expectations (-16.9B vs -17.2B).

CAD GDP hit target at 0.2%.

USD Core PCE Price Index hit target at 0.1%.

Market Reaction

There was some positive risk tone during the week but the sentiment was very changable. The USD dropped over the week, driven by EUR and GBP strength at the start of the week. Global equities were broadly down. Oil gains and gold is down. US 10 Year yields rose substantially during the week. The JPY weakened for 5 straight days. The GBP rose and broke through resistance. CAD grinds up on the oil price. AUD consolidates and NZD takes a move down

Trading Plan

Trading was difficult with GOLD, EURUSD and EURJPY trades closing at breakeven. Month-to-date performance is +0.32% and year-to-date performance is +9.4%. Two EURUSD trades remain open over the weekend.

Weekly Forex Outlook – 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.

In the news:

Ron Paul – not a shock if stocks fall 25% and gold rises 50%

S&P500 could hit 2500 this month

Mon – Japanese Tanken Manufacturing Index at a three year high.

Currently (1030am BST) major equity indices are up and the JPY is weakening for the eight consecutive day. We are risk on.

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

My two EURUSD trades close at breakeven.

Tues – RBA Cash Rate and Rate Statement; GBP Construction PMI

Wed – GBP Services PMI; USD FOMC Meeting Minutes

Thurs – AUD Trade Balance; USD ADP Non-Farm Employment; Crude Oil Inventories

Fri – GDP Manufacturing Production; USD Average Hourly Earnings and Non-Farm Employment Change

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Here is your Weekly Review and Outlook video.

I discuss last week’s trades at 4:35 and this week’s trading plan at 12:45.

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