FOMC Jan 31 | Forex Factory

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FOMC Jan 31

  • #1
  • First Post: Jan 31, 2007 5:39am Jan 31, 2007 5:39am
In August, where the 1st no hike was made, USD streghtened. However, the last 3 FOMC, USD strengthen only to weaken a few minutes later.

Last October, traders were conditioned by Grep Ip that the Fed will be extra hawkish - but the statement was same with that of September.

December statement was basically same with the last 2. Today, it is being rumored again that Fed will be extra hawkish again (a repeat of October?). USD strengthened by 100 pips vs GBP earlier - same as what happened last October!

What is important to know is will FED show signs of "rate cuts" in the future instead? After all, traders were conditioned that there will be a cut anytime soon.

How would you trade FOMC later?

Me? Im very exhausted after having little sleep from the NZD trade balance wait. I should have slept through it instead.
  • #2
  • Jan 31, 2007 6:12am Jan 31, 2007 6:12am
Does anyone remember the BOE surprise in Jan? There may be a clue to a FED surprise with the ECI. If the ECI comes in strong along with better than expected GDP (which they would already know and have been deliberating over the last day), we may get a surprise increase. A drop is unlikely in my opinion. The economy has been stronger than expected through December. Oil price thus petrol at the pump has backed off giving the consumer more spending cash, which in turn may spur inflation. Hawkish tone expected in my camp.
  • #3
  • Jan 31, 2007 7:02am Jan 31, 2007 7:02am
Whooo hooo! It FOMC day! Looking around at most of the reports and opinions it seems people are expecting hawkish retoric from the Fed. It seems to me the risk is on the dovish side. And looking at the aud/usd price action especially, the market is getting ready for a move higher. I'm short usd going into this thing.
  • #4
  • Jan 31, 2007 8:40am Jan 31, 2007 8:40am
I'm short cable with this one.
  • #5
  • Jan 31, 2007 12:59pm Jan 31, 2007 12:59pm
Quoting BurgerKing
In August, where the 1st no hike was made, USD streghtened. However, the last 3 FOMC, USD strengthen only to weaken a few minutes later.

Last October, traders were conditioned by Grep Ip that the Fed will be extra hawkish - but the statement was same with that of September.

December statement was basically same with the last 2. Today, it is being rumored again that Fed will be extra hawkish again (a repeat of October?). USD strengthened by 100 pips vs GBP earlier - same as what happened last October!
great analysis BK. FOMC is usually a choppy reaction since the statement takes a few minutes to for traders to ready and decipher, so if i get in i am getting in a spike fade. the inflation data lately has been pretty tame, other than todays GDP surprise, so if anything i expect statement to be on the hawkish side. also, the fact that the economy is doing so well (3.5% GDP) under higher rates will signal to the fed that there is no need to lower rates. what i really expect is no change from last statement, but right behind that i am looking for some dollar strength.
Relax and be happy.
  • #6
  • Jan 31, 2007 1:08pm Jan 31, 2007 1:08pm
Quoting joecashflow
Does anyone remember the BOE surprise in Jan? There may be a clue to a FED surprise with the ECI. If the ECI comes in strong along with better than expected GDP (which they would already know and have been deliberating over the last day), we may get a surprise increase.
well, this did indeed happen, although i wouldnt call the ECI "strong", but it certainly wasnt weak. if we get an "surprise" rate hike today then everything i think i know about Ben Bernanke is wrong
Relax and be happy.
  • #7
  • Jan 31, 2007 1:11pm Jan 31, 2007 1:11pm
btw, we added a new feature to the calendar, if you click on the detail view next to FOMC event you will see there a link to the official release page. on this page you will find the statement as soon as it is posted by the fed.
Relax and be happy.
  • #8
  • Jan 31, 2007 1:16pm Jan 31, 2007 1:16pm
Quoting merlin
btw, we added a new feature to the calendar, if you click on the detail view next to FOMC event you will see there a link to the official release page. on this page you will find the statement as soon as it is posted by the fed.
Keeps getting better
  • #9
  • Jan 31, 2007 1:22pm Jan 31, 2007 1:22pm
I stood aside.

Im not fond of statement reaction trades - too subjective. It sounded Dovish but then how could I know if it is...

Oh yea... Locker is no longer a voting member and with him out, all decided a no rate hike.
  • #10
  • Jan 31, 2007 1:27pm Jan 31, 2007 1:27pm
First lost 10 pips with my short pending order but after that entered for long @1.9636 for quick 27 pips. Not a good trade but managed to make some money nonetheless.
  • #11
  • Jan 31, 2007 1:29pm Jan 31, 2007 1:29pm
Quoting BurgerKing
Oh yea... Locker is no longer a voting member and with him out, all decided a no rate hike.
LOL yeah everybody was sick of him bitching and booted him out! LOL
Relax and be happy.
  • #12
  • Jan 31, 2007 1:30pm Jan 31, 2007 1:30pm
im looking to fade this EURUSD at 1.32 because i dont see any followthrough happening...
Relax and be happy.
  • #13
  • Jan 31, 2007 1:43pm Jan 31, 2007 1:43pm
Today wasnt as bad as i thought it would have been. But I know friday (being the release of the NFP will be turmoil. O yea, and tomorrow the ISM will be out, that should produce some volume as well.
  • #14
  • Jan 31, 2007 1:47pm Jan 31, 2007 1:47pm
We have 3 hammers (reversal candles aka Pinochio by James16) alone this week on GBPUSD. Market is deceitful.

GDP was indeed very USD Positive, but since that did not supported USD, FOMC decision is the thunder for the day and I hope Asia/Australia will hear that loudly in the coming hours.

Following the Daily Charts, I will place a Buy 1 pip above today's high.. if that breaks through I expect something upward perhaps 50 pips.
  • #15
  • Jan 31, 2007 2:22pm Jan 31, 2007 2:22pm
The market actually moved more off the GDP release than the FOMC, go figure. Anyway, I think 3050 will be pretty important but I think the dollar is in for a big spanking over the next few sessions. Watchout NFP, the dollar is going to get slaughtered.
  • #16
  • Jan 31, 2007 7:17pm Jan 31, 2007 7:17pm
Quoting faure
The market actually moved more off the GDP release than the FOMC, go figure. Anyway, I think 3050 will be pretty important but I think the dollar is in for a big spanking over the next few sessions. Watchout NFP, the dollar is going to get slaughtered.
The estimate for NFP is 140K+ with the previous one being at 167K.

Hmm... Revisions play the biggest game. WILL we see another revision upward? Jeez.. is 167K not high enough?

Question to Americans: Is January the month of hiring? I have to mention this: In the Philippines, many employees hold on to their old jobs passed December (so they get the yearend bonuses) and oftentimes quit the job in January to seek out new jobs - exactly what the saying "New Year turn a new leaf". So I'd say, there are more job losses in January than hiring here.
  • #17
  • Jan 31, 2007 8:03pm Jan 31, 2007 8:03pm
Quoting BurgerKing
The estimate for NFP is 140K+ with the previous one being at 167K.

Hmm... Revisions play the biggest game. WILL we see another revision upward? Jeez.. is 167K not high enough?

Question to Americans: Is January the month of hiring? I have to mention this: In the Philippines, many employees hold on to their old jobs passed December (so they get the yearend bonuses) and oftentimes quit the job in January to seek out new jobs - exactly what the saying "New Year turn a new leaf". So I'd say, there are more job losses in January than hiring here.
In America, I would think that if you're in a job where you get a year-end bonus, it's going to be a good salaried job you've had for at least a few years and its not something you'd just throw away to "start a new leaf". You would only leave it if you had a really good reason. And it would be a career job that you'd want to hang on to for at least 5 years. Plus America is so much larger than the Philippines....we've got around 300 million people now, even if people here did have a practice of quitting jobs to start a new leaf, the country and people is too diversified for there to be a certain month when the majority of people would quit.
  • #18
  • Jan 31, 2007 8:45pm Jan 31, 2007 8:45pm
Quoting aicccia
In America, I would think that if you're in a job where you get a year-end bonus, it's going to be a good salaried job you've had for at least a few years and its not something you'd just throw away to "start a new leaf". You would only leave it if you had a really good reason. And it would be a career job that you'd want to hang on to for at least 5 years. Plus America is so much larger than the Philippines....we've got around 300 million people now, even if people here did have a practice of quitting jobs to start a new leaf, the country and people is too diversified for there to be a certain month when the majority of people would quit.
On the Bonus front, Not neccessarily I'm in a new position which I have been in for only a couple of weeks Pre Calendar/Fiscal year end and, just today, received my share of the Corporate Profit Bonus. My position in the organisation is {as you intimated} Management and I know they want me. {mitigating circumstances perhaps}

However...;
As an immigrant to N.A. [Canada, not U.S.] I have observed the difference in attitude between Europe and here. {N.A. [I have dealt with the US for decades]} Those that 'wish' to be employed, will be Employed. The Jobs are available, it comes down to... "What do I have to do and what are you offering as renumeration?" Plus Benifits? Seasonal NFP aside. {actually, on second thought, FP [seasonal pickers] IS probably a factor}

So...
I look at it this way. They didn't scroo up on last months numbers, they just adjusted them to be more accurate in the real world. Admin. takes time. Ask any Manager.
Above and beyond all that, I have 3 different neighbouring kids that exemplified their disdane for adult wisdom and quit their jobs on Dec 22 despite being eligible for year end bonus within 10 more days.

Bottom line:
In N.A., If you want to work, get to work. If you start a job and don't like it, quit within a week.

I KNOW there is the potential for individuals to read this that would have a legitimate argument saying that they have been looking for work, but no-one will give them the crack in the foundation they need.

One of the interferences that I hope to change on the Geoid before all my aspirations come true.
  • #19
  • Last Post: Feb 3, 2007 6:30pm Feb 3, 2007 6:30pm
i hate trading the Fed Statement, minutes

1. during the New York session, not nearly as volitle as if it was in the morning
2. like Merlin said, the statement is subjective, and therefore the moves are not a constant flow of supply and demand in one consensus direction.
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