Weekly Review and Outlook 5th June 2017

Mark NugentJune 2017, Trading Plan

Weekly Forex Review – Week Commencing 29th May 2017

Economic Calendar

Over the weekend:

North Korea tests another missile.

Fed’s Williams (Non-Voter, Soft Hawk) stated the Fed will begin shrinking balance sheet later this year. Williams added US has reached and surpassed full employment and that inflation is moving towards 2% within a year or so. (Newswires)

US President Trump tweeted that the massive tax cuts/reforms he submitted is moving along the process very well and ahead of schedule, while he also suggested increasing spending for healthcare. (Newswires)

US President Trump’s son-in-law and advisor Kushner reportedly had undisclosed communication with Russian ambassador Kislyak on at least 3 occasions via telephone calls between April and November last year, according to press reports. Furthermore, there were also reports that Kushner is under pressure to take a leave of absence from the White House and that the US Senate Intelligence Committee has requested all Trump campaign documents since 2015. (Newswires)

Monday

Greece is back! EUR saw pressure overnight amid reports Greece could opt out of their next payment if creditors fail to agree on debt relief.

Tuesday

US Core PCE beat expectations at 0.2% vs 0.1%.

YouGov projected the UK Conservative party to fall 16 seats short of an overall majority with 310 seats, Labour at 257, SNP at 50, NI at 18 and Lib Dems at 10. However, the projections also showed a wide margin for error as it suggested the Conservative party could win a minimum of 274 seats and maximum of 345 seats. (Newswires/Twitter) Note, 326 seats are required for a majority.

NZD remains on the front foot as the RBNZ Financial Stability Report included some further encouraging signs on the economy – the improving global outlook, a robust banking system and a recovery in dairy prices all cause to maintain the positive tone on NZD.

Wednesday

EUR Flash Estimate CPI missed at the Headline and Core level (Headline: 1.4% vs 1.5%; Core: 0.9% vs 1.0%).

Canadian GDP was positive at 0.5% vs 0.3%.

Thursday

Early today (Thursday) saw AUD Retail Sales beat expectations by 1.0% to 0.3%.

Critically, in China, the Caixin Manufacturing PMI missed expectation and fell below 50 (49.6 vs 50.2).

UK Manufacturing PMI was on track at 56.7 vs 56.5.

In the US, ADP Non-Farm was very good: 253K vs 181K.

US President Trump confirmed that the US is to withdraw from the Paris Climate Agreement and will begin negotiations to enter a new accord or re-enter the Paris accord on terms fair to the US. (Newswires

Friday

UK Construction PMI beat expectation at 56.0 vs 52.7.

US Average Hourly Earnings were on target at 0.2% but prior revised down to 0.2% from 0.3%. Non-Farm Employment Change missed by a far margin at 138K vs 181K and the prior was revised down to 174K from 211K.

Market Reaction

The USD consolidated through the week as did equities. Trump’s announcement of the US pull out from the Paris Climate Accord caused a jump up in equities which was reflected around the world. Oil pushed down from resistance past the post-OPEC meeting low and gold climbed. New all-time highs were made by the S&P500, Dow, Nasdaq, FTSE100, FTSE250 and Japan225 (the latter breaking up through the 20,000 level). The EUR hit a high not seen since February 2016. The JPY was flat on the week. CAD consolidates and the AUD breaks down through support but recovers on Friday. The US 10 Year makes a low not seen since November 2016. Commodities are dropping. Finally, the USD dropped on Friday after the Non-Farm figure came out. Overall, it was quite risk-off, despite the Trump-induced equity rise towards the end of the week.

Trading Plan

One trade closed last week. Trade 29 (S&P500 long) closed for a gain of 1.34%. Month-to-date performance is 1.35% and year-to-date performance is 10.6%.

Weekly Forex Outlook – Week Commencing 5th June 2017

Economic Calendar

Over the weekend:

Another terror attack, this time in London.

Mon – At the time of writing (10am BST) the major moves are: 1. UK equity indices are down after the terror attack. 2. The DAX continues to make new all-time highs. 3. Gold breaks up through resistance.

UK Services PMI misses at 53.8 vs an expectation of 55.1.

Trade 30 (EURAUD long) closes at breakeven.

In the news:

Oil holds losses

Arab nations round on Qatar oil

Tues – AUD Cash Rate and Statement

Wed – AUD GDP

Thurs – UK Election; EUR Minimum Bid Rate and Press Conference

Fri – UK Manufacturing Production

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Here is your Weekly Review and Outlook video.

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