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  • #61
  • May 8, 2017 5:22am May 8, 2017 5:22am
Quoting Fader123
..Some decent job adverts out in Aus http://www.sbs.com.au/news/article/2...s-strength-anz Retail sales and the budget are due next. If we get some movement (taxes) - this could really improve things http://www.sbs.com.au/news/article/2...udget-tax-cuts..
In the meantime, this was what I put down in the Central Bank monetary policy diary that I keep:

RBA Statement Analysis (May 2, 2017)
Neutral Bias
Summary of key points, worries and expectations

  1. Non-mining investment remains low as a share of GDP and a stronger pick-up would be welcome
  2. Wage growth remains slow and this is likely to remain the case for a while yet.
  3. A gradual further increase in underlying inflation is expected as the economy strengthens
  4. An appreciating exchange rate would complicate this adjustment.


What do you think?

  • #62
  • May 8, 2017 6:27am May 8, 2017 6:27am
Quoting 4rXal-ghul
{quote} Fading in practice! I somehow found myself in a short EurNzd trade going into the weekend (it wasn't in the plan to leave it open over the weekend), but then buy-the-rumor-sell-fact ensured my position closed out for profit this morning. I did buy the EUR last week leading up to election weekend. With the French election gone by.. that's one less cloud (a major one indeed) hanging over the future of the Euro. Fundamentals looks promising... Is the Euro likely to resume it's bullish trend? Is this selloff just a correction?
Excellent 4rXal-ghul

Also 70 pips off the EU this morning -

https://www.forexfactory.com/showthr...39#post9841339
  • #63
  • May 8, 2017 3:21pm May 8, 2017 3:21pm
Quoting 4rXal-ghul
{quote} In the meantime, this was what I put down in the Central Bank monetary policy diary that I keep: RBA Statement Analysis (May 2, 2017) Neutral Bias Summary of key points, worries and expectations Non-mining investment remains low as a share of GDP and a stronger pick-up would be welcome Wage growth remains slow and this is likely to remain the case for a while yet. A gradual further increase in underlying inflation is expected as the economy strengthens An appreciating exchange rate would complicate this adjustment. What do you think?
4rXal-ghul

Have sent you a PM

Cheers

Fader
  • #64
  • May 12, 2017 2:55am May 12, 2017 2:55am
Quoting Fader123
{quote} 4rXal-ghul Have sent you a PM Cheers Fader
Can you please send me related thread material too. I'm also a fan of Wyckoff and have studied it too.
  • #65
  • May 12, 2017 3:21am May 12, 2017 3:21am
Help me understand?
I still don't get how this news related to forex works.. Lets just trace back to what happen yesterday
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^Shouldn't this be a bull for the US? but USD/JPY just dropped down significantly and an increase in EUR/USD..
+ Today we will have another CPI and retail events for the USD with a really good forecast.. Shouldnt USD still have a bull power supposedly?
But what i've been reading through out until now is a BEAR for the USD..

all this events < technical analysis?
  • #66
  • May 12, 2017 4:51am May 12, 2017 4:51am
Quoting Kelvo
Help me understand? I still don't get how this news related to forex works.. Lets just trace back to what happen yesterday {image} ^Shouldn't this be a bull for the US? but USD/JPY just dropped down significantly and an increase in EUR/USD.. + Today we will have another CPI and retail events for the USD with a really good forecast.. Shouldnt USD still have a bull power supposedly? But what i've been reading through out until now is a BEAR for the USD.. all this events < technical analysis?
I should probably leave this question for @Fader123 to answer. However, as it is a question that also bogs me from time to time, I'll input that analyzing news events (data releases or geopolitical) in current context helps too. Meaning you have to ask some questions like:


1. How much effect is this piece of news event likely going to have on the interest rate path of the central bank? Would it on itself be able to move the central bank to consider cutting/hiking?
2. What story does this news event tell in relation to other events before and after it?
3. Is it likely to weaken or strengthen the current central bank stance on economy/monetary policy?
4. ARE THE MARKETS PAYING ATTENTION TO IT?

Like I said, I too am interested in what @Fader123 thinks about your question.
  • #67
  • May 12, 2017 6:32am May 12, 2017 6:32am
In the meantime, here is my take-home from the yesterday's BOE event as I have summarized in my CB MPC diary:

BOE
May 11, 2017 Next BOE event (May 23, Inflation Report Hearings)
Mildly Bullish (as against stronger bullish market expectation)
Key points, Worries and Expectations

  1. Could begin raising rates sooner than market expects.
  2. Expects/plans for smoother Brexit negotiations.
  3. Forecast lower growth in the near term, forecast higher inflation in the near term.
  4. Forecast higher growth in the long term, forecast lower inflation in the long term.
  5. Expects slowing wage growth in the near term, expects faster wage growth in the long term
  6. Forecast and expectations are based on a smoother brexit.

  • #68
  • May 12, 2017 6:44am May 12, 2017 6:44am
Welcome to the thread

Agree with the above -
Everything depends on what traders are looking at and how much has been priced in.
Just because there is a red mark by something - doesn't mean that if it beats expected the currency should rally.
If the central banks are not concerned about PPI and there is a beat or miss- it won't really move.
I never looked at PPI anyway.

Also there are geopolitical considerations to take into account (DT, North Korea, plus current trader sentiment on the dollar)
In respect of central banks its only by reading their monetary policy statements and listening to the conference will you get an idea of their tone, and what they are looking at.

If they are looking at say wage inflation, and traders are expecting poor figures - but they come out really strong - this will have a huge effect.

For instance recently traders were expecting a more hawkish statement from the RBNZ, but if you had of looked through read and listened to Governor Lowe's recent statement and speeches, you'd have known that this was not going to be the case (despite the shadow board talking about interest rate hikes)
this had a big affect on the Kiwi
  • #69
  • May 12, 2017 6:55am May 12, 2017 6:55am
Here is a question:

How much power/effect/influence does the market pricing for probability of rate hikes/cuts -as the market's interpretation of news event- have on currency movement.

I know the question seems sort of convoluted.. but what I mean is:

After an important USD news event, should we look to the Fed Fund Futures for change in pricing so as to have a clue as to how the market is interpreting that event in the context of what/how much they expect the Fed to do next?

Same question applies to other Central banks and their currencies.
  • #70
  • May 12, 2017 7:14am May 12, 2017 7:14am
Quoting Kelvo
Help me understand? I still don't get how this news related to forex works......
Today we will have another CPI and retail events for the USD with a really good forecast.. Shouldnt USD still have a bull power supposedly?
But what i've been reading through out until now is a BEAR for the USD.. all this events < technical analysis?
Hi guys
Amazing good thread you got here.

I fully agree and enjoy reading the above couple guys.

Just to add - when low liquidity, or Friday, the news take COUPLE OF HOURS OR DAYS to register.
Yes couple hours !!! look at U/Cad early this week.

So just wait. Some times the move is illogical.... wait it out again.

Last week jobs, yesterday PMI all good. Sure it took half a day for U/CAD to jump....
U/J in correction!!
So patience!!!

USA news in 15min!!!
Beware of robber banks (RB), bad advisors.
  • #71
  • May 12, 2017 7:45am May 12, 2017 7:45am
Quoting Not-KPMG
{quote} Hi guys Amazing good thread you got here. I fully agree and enjoy reading the above couple guys. Just to add - when low liquidity, or Friday, the news take COUPLE OF HOURS OR DAYS to register. Yes couple hours !!! look at U/Cad early this week. So just wait. Some times the move is illogical.... wait it out again. Last week jobs, yesterday PMI all good. Sure it took half a day for U/CAD to jump.... U/J in correction!! So patience!!! USA news in 15min!!!
Welcome to the thread Not-KPMG

Great point on areas being re-tested (to fill orders) before new levels targeted.
  • #72
  • May 12, 2017 8:45am May 12, 2017 8:45am
Quoting 4rXal-ghul
Here is a question: How much power/effect/influence does the market pricing for probability of rate hikes/cuts -as the market's interpretation of news event- have on currency movement. I know the question seems sort of convoluted.. but what I mean is: After an important USD news event, should we look to the Fed Fund Futures for change in pricing so as to have a clue as to how the market is interpreting that event in the context of what/how much they expect the Fed to do next? Same question applies to other Central banks and their currencies.
Today's inflation and retail sales news event.. and this Forexlive update http://news.forexlive.com/!/the-odds...d-cpi-20170512 that subsequently followed is a case in point as regards my question.
  • #73
  • May 12, 2017 8:50am May 12, 2017 8:50am
Quoting Not-KPMG
{quote} Hi guys Amazing good thread you got here. ..
It's great to see you around here, sir. Welcome.
  • #74
  • Edited 9:50am May 12, 2017 9:34am | Edited 9:50am
Quoting 4rXal-ghul
Here is a question: How much power/effect/influence does the market pricing for probability of rate hikes/cuts -as the market's interpretation of news event- have on currency movement. I know the question seems sort of convoluted.. but what I mean is: After an important USD news event, should we look to the Fed Fund Futures for change in pricing so as to have a clue as to how the market is interpreting that event in the context of what/how much they expect the Fed to do next? Same question applies to other Central banks and their currencies.
That is a really good question.
To be honest I tend to look through what has previously happened- to gauge the likelihood of what is likely to happen now- and daily market structure
Also it helps to know what position the banks are taking.
And what the closest levels are and how price behave there.

Looking at the Euro
Banks - They are positive on the Euro - which seems to be marked higher than the pound.
Previously- The EU had previously rallied before there has been misses over at least a few days
Structure: Market was down for a number of days on the EU before today's release on- so would expect further strength, over the next couple of days on the Euro (notwithstanding any geopolitical events that could happen- Donald Trump, etc....)
  • #75
  • May 12, 2017 9:53am May 12, 2017 9:53am
Quoting Fader123
{quote} That is a really good question. To be honest I tend to look through what has previously happened- so gauge the likelihood of what is likely to happen now- and daily market structure Also it helps to know what position the banks are taking.
I will take note of that.

Quote
{quote} Looking at the Euro Banks - They are positive on the Euro - which seems to be marked higher than the pound. Previously- The EU had previously rallied before there has been misses over at least a few days Structure: Market was down for a number of days on the EU before today's release on- so would expect further strength, over the next couple of days on the Euro (notwithstanding any geopolitical events that could happen- Donald Trump, etc....)

If it's not too much trouble for you, can you please kindly explain this bit with a chart (as you usually do) if and when you have the time to do so?

Thanks @Fader123.
  • #76
  • Edited 4:44pm May 12, 2017 3:53pm | Edited 4:44pm
Quoting Fader123
{quote} That is a really good question. To be honest I tend to look through what has previously happened- to gauge the likelihood of what is likely to happen now- and daily market structure Also it helps to know what position the banks are taking. And what the closest levels are and how price behave there. Looking at the Euro Banks - They are positive on the Euro - which seems to be marked higher than the pound. Previously- The EU had previously rallied before there has been misses over at least a few days Structure: Market was down for a number...
Think my last post could be a bit more clearer- I was in Starbucks

First structure - which really needs no explanation

Second - what happened previously- I have looked through the last few occasions where US CPI has missed expected estimates- price will either rally up further or retrace and rally up again.

Today was a great trade - where you have a decent beat across everything and it catches the market by surprise. Got in on the first pullback. The fact that price had not rallied into the event helped. EU currently testing the days high.

A couple of other things I would like to point out to anyone who is new to fundamentals and central banks

a) Dovish - this means that a central banker prefers to lower rates or want to keep rates low. Some are doves at heart even though sometimes they might try to claim otherwise (Yellen). Draghi's latest speech was dovish in that there were strong economic figures - CPI, employment etc..

b) Hawks - this means that a central banker prefers to hike rates- so someone like Kirstin Forbes at the BOE wants to hike rates. She is seen to be hawkish

https://www.ft.com/content/a37d916e-...1-5e720a26771b

One other point to make - is that the usual route is to buy currencies at support where a central bank is looking to hike rates against those that are looking to cut rates. So USDJPY is a typical example. Just to confuse matters the JPY and the Swiss Franc also acts as a safe haven in times geopolitical trouble.

Have a good weekend
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  • #77
  • May 15, 2017 3:07am May 15, 2017 3:07am
Quoting Fader123
Thought I would do some analysis on the Aussie A) Iron ore prices are on the drift - mainly because in China iron production has started in earnest https://www.businessinsider.com.au/i...y-falls-2017-5 b) Also the indicators see a slow down in China c) In Aus CPI missed - but is expected to slowly increase. d) Unemployment is expected to decrease over time. (job adverts were up) e) Lowe really wants to see a pick up in non-mining activity. h) Here is his latest speach which really goes into...

No wonder Lowe was so positive for the future

http://www.bbc.co.uk/news/world-asia-39912671
  • #78
  • Edited 4:26pm May 15, 2017 4:06pm | Edited 4:26pm
Quoting Fader123
{quote}
Banks - They are positive on the Euro - which seems to be marked higher than the pound.
Previously- The EU had previously rallied before there has been misses over at least a few days
Structure: Market was down for a number of days on the EU before today's release on- so would expect further strength, over the next couple of days on the Euro (notwithstanding any geopolitical events that could happen- Donald Trump, etc...
Looking at the EU- Approaching resistance and 1.0000, has bounced off R2 on the daily. Not sure how much more of this move there is. Banks still positive though. French CPI figs tomorrow.

Missed a trade on oil today - when the Saudis and the Russians do something - it pays to listen. The issue is that US shale producers keep diving in and ramping up production. If they joined Opec oil would soar- but there is no chance of Trump doing that.

UK CPI figures tomorrow - Just had a read through the latest BOE statement
http://www.bankofengland.co.uk/publi.../2017/003.aspx
There is no way Carney will be hike rates.
Think the pound is being dragged along by the Euro and the weak dollar.
If we get a big miss - this would give Carney some room to potentially cut further if required. Although he has said before that zero rates are off the table.
This would be a nice trade. After reading the statement I feel that even if it hits 2.6% he is not going to do anything anyway
If we get a decent miss - will sell it.
There was a report out today that was even more pessimistic on the UK economy
https://www.bloomberg.com/news/artic...-by-new-report
  • #79
  • May 16, 2017 4:48am May 16, 2017 4:48am
Quoting Fader123
{quote} Looking at the EU- Approaching resistance and 1.0000, has bounced off R2 on the daily. Not sure how much more of this move there is. Banks still positive though. French CPI figs tomorrow. Missed a trade on oil today - when the Saudis and the Russians do something - it pays to listen. The issue is that US shale producers keep diving in and ramping up production. If they joined Opec oil would soar- but there is no chance of Trump doing that. UK CPI figures tomorrow - Just had a read through the latest BOE statement http://www.bankofengland.co.uk/publi.../2017/003.aspx...
Trying not to make this look like a journal
On reflection - I should have just sold the pound anyway - it didn't matter what the figures were.
Euro still chugging away- traders love it
Looking back over May
Up so far on
French election
Macron sell-off
US CPI figures
Should have really got on UK CPI figures- it did not matter what the figures are Carney will never hike rates

Aussie employment figures next. To be honest I am hoping that that are poor. But the estimate is low. At least that will give traders an excuse to sell it off.
The banks are against it. Any decent beat on expected and I am selling it.
  • #80
  • Edited 5:56pm May 16, 2017 4:44pm | Edited 5:56pm
Quoting Fader123
{quote} Trying not to make this look like a journal On reflection - I should have just sold the pound anyway - it didn't matter what the figures were. Euro still chugging away- traders love it Looking back over May Up so far on French election Macron sell-off US CPI figures Should have really got on UK CPI figures- it did not matter what the figures are Carney will never hike rates Aussie employment figures next. To be honest I am hoping that that are poor. But the estimate is low. At least that will give traders an excuse to sell it off. The banks...
Nice one, Sir!

Damn it! I wasn't around to discuss these posts. I sure missed a lot in the time I wasn't around.

I wish for this thread to be like a journal. It'd be great if it is like journal for every member on here... if you want it to be.

We are learning great stuff here. How to read the market!

On the Euro, I totally agree with you. The narrative seems to be on it's side. I get the sense that the market thought the Euro is ripe for a bottoming. The catalysts proved to be:
1. Improving data
2. Eurozone going past the first major hurdle of the &quot;anti-establishment threat&quot; going by Le Pen's landslide loss in the French election.

Over the weekend a certain Jens Weidmann of the ECB talked about how Macron's win (read Le Pen's loss) and the resultant effect gives the ECB room to begin policy normalization. There was a certain Spiegel report last week that also said something along that line.

Over the weekend, I saw on Reuters that the CFTC report was showing that net shorts on the Euro had decreased significantly. So I decided I was going to buy the EUR first thing Monday morning.. which I did with the EURNZD, for a nice profit.

I did not trade the CPI figures because honestly I did not know how to go about it.. until now, with what you said above. So the trade is to fade rallies on the GBP, right?

On the Aussie, I have eyes on Wednesday's Q1 Wage data too. A miss could be a further catalyst for the low-iron-ore price-driven downside move on the Aussie.

https://www.bloomberg.com/news/artic...itions-dwindle
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