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 take a look at our top 3 picks:
1. Tuesday sees the release of the Building Permits figure out of the USA. The figure represents the annualized number of new residential building permits issued during the previous month which is expected to reach 1.274M. The figure is regarded as a gauge of future construction spending, which has far reaching consequences for the economy at large. A better than expected release is likely to result in a strengthening of the USD as the figure is taken to imply that an uptick in spending is on the horizon. Conversely, a worse than expected release will show a slowdown in building plans by consumers which will weaken the USD as traders’ price in a potential down tick in the economy.
2. Thursday sees the release of the Australian Employment Change figure. The Reserve Bank of Australia (RBA), who make the monetary policy decisions for the country, 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 AUD as markets price in a drop-in consumer spending and confidence.
3. The Canadian CPI q/q is due on Friday and is regarded as the primary gauge of consumer prices and how they have changed relative to the last quarter. The figure tends to have a large impact on the Canadian dollar as it accounts for a majority of the overall inflation in the economy with a rising/falling inflation signalling that the economy is heating up/cooling down at which point the central bank may opt to increase/ decrease rates in an attempt to maintain its inflation mandate. A higher than expected print will see the Cad strengthen, while a worse than expected release will see the Cad weaken.
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/