Let's trade the news

Does anyone want to join in a discussion trading forthcoming news items?

I trade the news - I find that it is the most reliable way of making money in fx

Tomorrow we have GBP Manufacturing Production m/m- at 09:30- This will be for January 2016

This is probably not the best one - to start this thread. But it will give you a flavour of what I look at when looking at the news

This announcement does move the market - usually about 30 pips, obviously this depends on whether actual beats expected or not- and whether there is anything in the report that provides information contrary to the headline figure.

Tomorrow - the estimate is .2%, previous was -.2

Not sure if this is a bit high - but I think it is a tricky call - so I may stand aside on this one

Here is my breakdown:


Sometimes its useful to look at figures associated with what is going to be announced

Manufacturing PMI for Jan was off estimates, oil was still in the doldrums

Previous figures are here http://www.forexfactory.com/calendar.php#detail=59927

There is also the EEF statement- which has some concerns

https://www.eef.org.uk/resources-and...015-submission

Last months report stated

Manufacturing output decreased by 0.2% in December 2015 compared with November 2015. The largest contribution to the decrease came from the manufacture of wood, paper products & printing, which decreased by 2.1%.

http://www.ons.gov.uk/economy/econom...n/december2015

But in mitigation - the pound has been weaker- and if it is a negative figure - this would be the 4th consecutive contraction and last month's figs showed a slight drop in negativity

However, on balance - when I think of all the issues with euozone, brexit, oil and commodity issues, manufacturers concerns- its difficult to see a positive figure

Although as I said - this is a tricky call- and I may stand aside. Although we may get some clues on how the market reacts before the announcement.

Right - I have had a look through the charts for manufacturing- and if the market drops pre announcement by say 30 points - I may be looking at going long just after the announcement. I may even trade it pre-announcement

However, getting on to the main event tomorrow-

BOC - Interest rate decision at 3pm GMT. This could seriously move the market even though the rate is not expected to change.

Looking at the current fundamentals - The CAD is linked to oil - which has recovered in price - I think that this will continue in the short term. Canada's - GDP, CPI and trade balance are all doing well - beating expectations. Also CADs concerns about China have largely gone away- and exports have improved.

In addition there is a stimulus package that will be launched in March - in part to try and address the high unemployment rate.

Regarding the USD - wages have dropped in the most recent NFP report and with the (de)inflationary concerns coming out of the Fed the chances of an interest rate rise would have been pushed out further.

Hopefully, tomorrow will bring some big money

[quote=Fader123;8801065]Does anyone want to join in a discussion trading forthcoming news items? I trade the news - I find that it is the most reliable way of making money in fx

And how do you trade the news?

I look at price action pre trade announcement. This mornings manufacturing figures are a case in point. The market rallied heavily before the news announcement- so this was an indication that the announcement was going to be positive (which it was was)- so when the figure was released - it did not really do a lot- as the market had already moved.

CAD/USD interest rate decision was a brilliant trade- the economy is going really -- but there was a major bullish engulfing candlestick yesterday. Price action pre market announcement indicated that the market was due to come off- which it did- the fundamentals just backed everything up.

Right next is RBNZ interest rate decision is due at 8 pm GMT

If anybody fancies doing some work on this rather than just reading what I write - feel free

If I don't get some input on this - this will be my last post- as these posts take ages to put up

Getting back to the Kiwi- analysts think that the interest rate will stay the same.- however some believe that there may be a cut.

If there is a cut - the Kiwi will dive- a huge amount, if not if will rally a bit.

Things to look at:

What were the previous reports - what concerns did they have

http://www.rbnz.govt.nz/news/2016/01...at-2-5-percent

How have these concerns fared?

What are the GDP, CPI, employment figures

Dairy in New Zealand is a big thing - so this need to be reviewed - what are the future expectation on this

Next what happened to the markets when they previously cut the rate- was it anticipated?

What happened when they did not cut rates - following a bullish day (like we have today)

Once we have this information - then will then know what will probably happen- how big the move is likely to be, how long it will last