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:

  • Monday sees the release of the Manufacturing PMI data out of the UK. The figure is derived by surveying purchasing managers in the manufacturing sector and given that purchasing managers have, by the nature of their job, an eye on the future when determining demand for their products, these figures are regarded as a leading indicator of economic health. A reading above 50 indicates industry expansion while below 50 indicates the sector is contracting. A better than expected release will see the GBP strengthen while a worse than expected release will see the GBP lose ground against its counterparts.
  • Tuesday sees the Reserve Bank of Australia (RBA) releasing their Cash Rate and Rate Statement. The cash rate, which is the interest rate charged on overnight loans between financial companies, is forecasted to remain unchanged at 1.50% and has already been priced in, any surprises would impact the currency, with a rate hike leading to a stronger AUD while a rate cut would lead to a deprecation of the AUD. The rate statement will communicate the RBA`s views and concerns, with a more hawkish report expected to lift the AUD while a dovish tone will see the AUD depreciate.
  • 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/