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Market Review: United States Core Consumer Price Index

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Market Review: United States Core Consumer Price Index

Market Review: United States Core Consumer Price Index

Economic calendar (highest volatility): 12th February– 16th February 2018:

Timezone: (GMT -5:00) Eastern Time (U.S & Canada), Bogota, Lima

Fundamental:

The recent sell down affecting the entire global equities market was last week’s major headline. Former Federal Reserve chair Yellen noted in an interview that American stock prices and price-earnings ratios are relatively high, while some hedge fund managers have enacted large downward bets on American equities. In addition, the Federal Open Market Committee (FOMC)’s three Interest Rate Hikes look positively on track to take place this year. The team at FintechFX opine that further equity market corrections should take place over the near term.

This week, the major volatility drivers are expected to come off the inflation rate releases and to some extent, the Retail Sales rate releases out of the United Kingdom (U.K) and The United States (U.S). Traders may expect greater volatility emanating from the Great Britain Pound (GDP) or United States Dollar (USD) related pairs hence, the team at FintechFX would like to advise our fellow traders to approach these pairs with some precaution. In addition, the Australian Dollar (AUD) is also a pair to trade cautiously as it falls second place in terms of market moving news releases for the week.   

Technical:

The GBP/USD can easily be crowned as one of 2018's star performer; the pair is seen to have recouped much of it's post-Brexit losses, as indicated in the strong uptrend visible in the chart below. Nonetheless, the pair has continued to fall post the rather positive U.S NonFarm Payrolls release. In the recent Bank of England (BoE) Interest Rate Decision meet up, the committee warned that the BoE akin to the U.S, may also raise interest rates faster than expected. This statement sparks some optimism for GBP/USD prices to move further upwards. 

This week, the AUD/USD presents traders with some trading volatility as employment related data is scheduled to be released sometime midweek. The Australian Dollar in our opinion, is still highly undervalued and shows some signs of rising this 2018. In the light of a potentially more hawkish statement moving forward, markets are looking at the AUD/USD to regain some of it's strength lost throughout the years. 

The recent cryptocurrency market scares have been a boon to the XAU/USD. This is apparent as despite positive Interest Rate view out of the American economy, Gold prices continue to hover over the 1,300 price level. The team at FintechFX opine that as governments become more aware of the mechanics of cryptocurrencies and try and regulate it, Gold should benefit from this as investors will surely diversify their funds gradually into this age old safe haven commodity. Last week, multiple major banks announced that they will not allow purchase of cryptocurrencies made with credit cards while China made a move to announce that they will increase regulation even further, by trying to restrict access from China to cryptocurrency trading platforms. 

 

Source (Charts): https://www.investing.com

Source (Economic Calendar): https://www.forexfactory.com/calendar.php

Contact Us: [email protected]

Economic Calendar by TradingView

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