New Zealand and UK Hold Rates
This really does not mean much for Forex traders, nobody expected a rise from either bank. The BoE reduced some of its forecasts and the RBNZ said GDP was a little less than expected. Interestingly both banks said recent increases in inflation would not last and they are prepared to look beyond short term inflation.
Chinese inflation data edges higher
Consumer prices moved to 1.2% from 0.9%, an increase in inflation in china is likely to spill over into the rest of the world at a later data but the odd 0.1% is not significant. The Bank of China does not respond in the way other banks do so no impact on interest rates. A growing chinese economy is however risk postive and generally benefits the AUD and the NZD
US inflation inched up
Consumer prices inched up 0.2%, a small number that will likely not help the USD. However it is becoming a pattern throughtout the world with most major economies reporting small increases in inflation. This will inevitably lead to higher yields on bonds and reduced stimulus, that will cause the VIX (fear gauge on wall street to rise) and lead to more volatile markets. For forex traders that usually means better trading conditions.
US Retail sales increase 0.4%
Below expectations of 0.6% and following a poor set of results last month these sales figures suggest a slow growing economy, thats a clear trend for the US as it begins to outpace the rest of the world (except the Brexit hampered UK). These figures might keep a lid on GDP and cause a pause in the FED rate hike cycle, that cycle is NOT going to end anytime soon.
Oil Stocks fall
A fith week in a row that US oil stocks have fallen but they still have a stock of 522 million barrels. OPEC production cuts are due to end this month but those cuts have only fired life back into the US shale industry which is now producing 850,000 barrels a day, up from 250,000. Another leg lower for oil is almost inevitable.
Last week we took 12 trades delivering 7 wins for a total of 261 pips. The win rate was a little lower than usual at only 58% (long term average is 68%) and a couple of times we managed to escape poor trades for small losses. Next week looks good with a few trading opportunities already identified in the planned trades section
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