Fundamental/News Thread

It is amazing what people will do to avoid reading the monetary policy statement...lol

Thought I would post a day trade
I did not take it - mainly because I did not think that there would be enough pips
My thinking was that there was still bearish sentiment on the Kiwi, but the Sunday papers were not exactly kind to May
However, she was due to report about how things went in the the EU- and I was hoping that she would be full of it- and that traders would pick up on it.
She spoke around 3.30 pm I believe- around this time and leading up to it the market started to rally
Drawing trendline and s/r and pivots is really useful, to help one enter at the best price.

So there should be even more spotlight on today's NZ employment numbers, then?

the prints for the last two quarters coincides with the most recent major turning points on the NZDUSD pair. (i.e rally from around 0.685, and fall from around 0.7800 area)

You are wasted in your present job.
The nzd dumped last night as traders had another excuse to sell it
Will have think later on

NZ Employment numbers are supposed to come out on Oct. 31 according to the FF calendar. Am I missing something? I am in a NZDUSD trade, and I don't want to be caught off guard.

Yes that's correct. I don't know why Investing say it is today on their calendar.. though I noticed there was something off when clicked to open the details. FF and tradingeconomics have it on their calendars as an event for Oct. 31. Don't know what's going on there.

NZ HLFS Unemployment Rate is released 24.10 at 21.45 GMT

I know that most of the market's attention is on the impending ECB tapering decision, but I want to be prepared for the BOC rate decision on Wednesday.

The economic indicators are mixed. GDP is booming. Employment has grown each of the past 13 months, which includes two impressive numbers-- 45k and 54k-- in the past four months. However, CPI is relatively flat, and retail sales are up and down. The last retail sales number that was released was minus 0.7%. That was a big miss.

The last statement (Sept. 6, 2017) from the BOC provided this forward guidance: "Future monetary policy decisions are not predetermined and will be guided by incoming economic data and financial market developments as they inform the outlook for inflation. Particular focus will be given to the evolution of the economy’s potential, and to labour market conditions. Furthermore, given elevated household indebtedness, close attention will be paid to the sensitivity of the economy to higher interest rates."

Poloz didn't make another public statement until Sept. 27.
Here is how Reuters interpreted his "data dependence" speech: "The dovish tone sent economists scrambling to revise expectations for the next rate hike, which some had predicted would come as early as October, and the Canadian dollar weakened to a near four-week low as investors bet on a slower pace of tightening. Economists at TD Securities said 'Poloz took away the hawkish bias without ambiguity'."

I missed the trade based on Poloz's speech. It would have been a fairly easy 150 pips. It pays to listen to the central bankers.

The market has priced in a 0% chance of a rate hike this week. There is a 47% chance of a rate hike in December.
At this meeting, the forecast is supposed to be updated. I will be looking at that to see how it might impact the potential hike in December.

The finance minister is supposed to release the "Fall Economic Statement" today. Here is a preview article, http://www.fin.gc.ca/n17/17-101-eng.asp

I am going to look at it, and the newspaper articles to see if it leads to a strong sentiment heading into the rate release. If so, this will be my first "sentiment into the release" trade.

If I don't think there is strong sentiment, I am going to look at the forecast to see if the price action suggests that a pullback trade is viable.

Fader mentioned that he doesn't "fade trade" interest rate releases. That makes sense because it is not always immediately obvious what the big takeaway is when the central bank offers forward guidance. Besides, let's be honest, "FED speak" isn't always the easiest to decipher.

Thoughts/critiques of this plan are welcomed...

Fader, in addition to the BOC rate announcement at 10am est, there is an 11:15am press conference. How would you prepare to trade the press conference?

My initially thoughts are that Poloz is going to be dovish. PM Trudeau criticized the hikes earlier this summer. The big retail miss, the fact that the loonie has appreciated 10% against the USD this year, as well as, Canada being an exporting country leads me to believe that he believes the two hikes are enough for now.

Lots to think about Cheetah. Will get back to you on this later on

In relation to the NZ employment information
I understand that the RBNZ are now taking over reponsibility for this.
Does anyone know what targets have been set
I think the next RBNZ meeting is in a couple of weeks
That will be worth looking at.
Either way think there is still a bearish sentiment on NZ

Thinking about the EUR decision rate

A couple of points;

a) Draghi has form- ie everyone is expecting nothing much to come out of this meeting. How many times have we been here
b) Last Thursday it came off- when someone in the EU said that the reduction in bond buying is not going to be as high as expected
c) Draghi knows how to play it. Overall you would have to expect some more strength - but be cautious

Draghi wants the least amount of volatility to come out of the Euro. Inflation is slowly on its way.

I won't be trading it- unless there is significant divergence against what is expected - overall though you would have to expect some strength.

But I have made a load of pips this month and for at least half of the month I did not trade.

The sorts of trades I like are the clear sentiment ones- Brexit stories/elections/change of interest rate bias.

For instance today Barnier and co- gave the UK a right earful- and the pound dropped.

Honestly, these are the easier trades.

Fader, thanks for your insight. It is a reminder that we can spend days waiting, hours reading and researching, and end up deciding not to trade. To succeed you have to be comfortable with putting in a lot of work, and not getting an instant reward.

Having said that, with all of the banks talking about a $30 billion cut and at most a 9-month continuation, I wonder why you do not see the ECB decision as a candidate for a "sentiment to release" trade. Which factors would make this a more appealing trade? Just trying to get a better sense of your thinking.

Below are the last three meetings on the EURUSD

I think you will be ok trading into this.

Obviously we have to focus on recent guidance and MP statements
GDP was expected moderate (m/m) (which it has done)
Businesses are still bullish about the future (according to a recent survey)
Inflation on the move back up.
Here is the most recent progress report plus recent surveys

http://www.bankofcanada.ca/2017/09/m...ogress-report/

http://www.bankofcanada.ca/2017/10/b...y-autumn-2017/

https://beta.theglobeandmail.com/rep...beandmail.com&

I think he could say inflation is moderating - but lets see what he says

"Economy may generate more non-inflationary growth."

How a leopard changes its spots

Today's been a really eventful day.

Aussie CPI in Asia
UK GDP in London
BOC decision in New York.

Pips flying everywhere, caught a few... missed many. Allowed a fat finger/rush of blood to head burn me a little. Recovered a bit.

The one biggest advantage of trading the news is you trade only when the market is moving.

Very true.

Here are the two main takeaways from the BOC statement for me:

“While less monetary policy stimulus will likely be required over time, Governing Council will be cautious in making future adjustments to the policy rate."

"The unemployment rate has continued to fall, but it's decline likely overstates the degree of improvement in the labor market."

It looks like the hike forecast is being pushed into the 2nd half of 2018.

Even though USDCAD has moved 150 pips, I think this trade still has legs. I am planning to get in on the first pullback on the hourly chart, or when the Asian session starts.