A very busy week coming with a lot of heavy data which drive FX volume and volatility higher.
We have three central bank meetings:
- SNB on Thursday
- BOE
- FED
CPI of Great Britain, Canada, EZ, and US
GDP report of New Zealand.
And Housing market report of US + Retail Sales of Great Britain.
Certainly, FED would continue unwinding its Stimulus QE3, cut 10bln to 35 bln.
However, what we should pay attention is FED Chairwoman Janet Yellen speech : The question on the table is : whether she updates US economic forecast or keep neutral bias and delay signal for the first rate hike.
With US economic data is mixed, I think Yellen would not hurry in hinting the time of first rate hike. She absolutely keeps neutral bias, and wait for more data to figure out the next step of monetary policy.
The recent speech of Yellen, she said that the first rate hike would be around six months after end of QE3, and I don't forget that speech, but recent react of financial market seem forgetting what she said. The main purpose of taper is to ensure entire US economy could stand on its foot after QE finish, and with the recent result of US Stock market, Yellen achieved that purpose, so surely I think the FED Meeting on Wednesday would be non-event.
However, aside FED Meeting, we also have some important data of US:
- CB Leading indicator ( I care this data ): It show overall strength of entire economy.
- Housing Start + Building Permit.
We know that the Housing market of US is stanating because of high cost and difficulty in financing from banks. If housing market data show continued stanation, this is indeed a big big problem for policy makers of US government.
Inflation report : What we had last week ? .We had a sharp drop of Producer price index + import price index + retail sales. Hence, it's very difficult for CPI report on Tuesday could be positive.
We see a big challenge for US data next week to create a good result for USdollar, I don't think USdollar next week could rise, unless FED Yellen hints about first rate hike.
My viewpoint about USdollar next week is: NEGATIVE.
This is the trade I recommend next week: LONG GBPUSD to 1.70 level even 1.7020
Next week, BOE Meeting would be key event risk. Last week, we heard from BOE Mark Carney said that BOE could hike rate soon to cool down the housing market, plus neutral bias of FED, I believe Sterling will keep on bid. The major level 1.70 would be broken.
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We have three central bank meetings:
- SNB on Thursday
- BOE
- FED
CPI of Great Britain, Canada, EZ, and US
GDP report of New Zealand.
And Housing market report of US + Retail Sales of Great Britain.
Certainly, FED would continue unwinding its Stimulus QE3, cut 10bln to 35 bln.
However, what we should pay attention is FED Chairwoman Janet Yellen speech : The question on the table is : whether she updates US economic forecast or keep neutral bias and delay signal for the first rate hike.
With US economic data is mixed, I think Yellen would not hurry in hinting the time of first rate hike. She absolutely keeps neutral bias, and wait for more data to figure out the next step of monetary policy.
The recent speech of Yellen, she said that the first rate hike would be around six months after end of QE3, and I don't forget that speech, but recent react of financial market seem forgetting what she said. The main purpose of taper is to ensure entire US economy could stand on its foot after QE finish, and with the recent result of US Stock market, Yellen achieved that purpose, so surely I think the FED Meeting on Wednesday would be non-event.
However, aside FED Meeting, we also have some important data of US:
- CB Leading indicator ( I care this data ): It show overall strength of entire economy.
- Housing Start + Building Permit.
We know that the Housing market of US is stanating because of high cost and difficulty in financing from banks. If housing market data show continued stanation, this is indeed a big big problem for policy makers of US government.
Inflation report : What we had last week ? .We had a sharp drop of Producer price index + import price index + retail sales. Hence, it's very difficult for CPI report on Tuesday could be positive.
We see a big challenge for US data next week to create a good result for USdollar, I don't think USdollar next week could rise, unless FED Yellen hints about first rate hike.
My viewpoint about USdollar next week is: NEGATIVE.
This is the trade I recommend next week: LONG GBPUSD to 1.70 level even 1.7020
Next week, BOE Meeting would be key event risk. Last week, we heard from BOE Mark Carney said that BOE could hike rate soon to cool down the housing market, plus neutral bias of FED, I believe Sterling will keep on bid. The major level 1.70 would be broken.
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