The week ahead has many a fundamental news release to look forward to, events which are sure to have traders licking their lips at the implied volatility and the numerous trading opportunities they create. Let us look at our top 3 picks:
1. First up is the Reserve Bank of Australia (RBA) releasing their Monetary Policy Meeting Minutes on Tuesday morning. Should the report show that there are several key reasons for not increasing rates, that imply a longer duration of unchanged rates, we would see the AUD soften as trader’s price in the new dovish information. However, a more hawkish report is expected to lift the AUD as trader’s position themselves for a potential tightening of monetary policy by the RBA.
2. The FOMC Meeting Minutes are due to be released on Wednesday. The Release occurs 8 times per year and is a detailed record of the FOMC`s most recent meeting, outlining the reasoning behind their last meetings monetary policy decisions, providing insight into the factors which they took into consideration before making their decision, to hold off on any changes in this case. The factors they outlined will be heavily scrutinized going further as markets assume that an improvement in areas the FOMC was concerned about would imply a step closer to a third-rate hike. Overall the meeting minutes will serve as a guide as to which economic release and indicators to keep an eye on going forward.
3. Friday sees the release of the US Non-Farm Employment Change (NFP), arguably, the most important figure out of the US for the month. The Federal Reserve Bank (FED), who make the monetary policy decisions for the USA, watch this figure very closely as it is regarded as an early indicator of health in the jobs markets, with better than expected data implying that employment is improving and that an improvement in the overall economy can be expected as the new jobs see increased spending and confidence by individuals. Worse than expected data has the opposite effect, depreciating the USD as markets price in a drop-in consumer spending and confidence.
The above are just the tip of the iceberg of the daily events which occur in markets, for daily technical and fundamental analysis please visit: https://www.opteck.com/fundamental-analysis/