Tuesday December 13, 2016 - 09:05:15 GMT
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Forex Trading Themes For Tuesday 13 December 2016
Forex Trading Ideas -- Tues 13 Dec 2016
- Today markets will be setting up for a widely expected +25bp Fed rate hike on Wednesday. With rates still at ridiculously low levels. higher rates will not realy mean much. Its the signals about the pace of future hikes that will matter. Markets will be watching the "dot plots" and Chair Yellen's testimony for guidance.
- The GBP is in the headlines today. Potentially market-moving data could be U.K. inflation data, when CPI and RPI data are released. The Bank of England targets inflation, so with levels still below target, the impact of ther report will be largely psychological. GBPUSD price swings can can impact EURUSD via the EURGBP cross.
- As for Wednesday's FOMC policy decision, the central bank is seen raising the mid-point of its 0.25%-0.50% target range (0.375%) for Fed Funds by 25bps to 0.625%. Markets placed 100% odds on a rate hike. News algos do not know what we expect. They mindlessly react to headlines, so the Fed rate hike could trigger price volatility.
- With the U.S. moving to a more expansive fiscal policy, Yellen should be cautious about the future, but the tone of her comments should be less dovish than in the past, which SHOULD be USD constructive.
- ECB President Draghi was playing a semantics game Thursday when he announced the "taper" of its asset purchases to EUR60b per mo from EUR80b starting in April 2017, but he claimed it was not a "taper". His dovish comments were an effort to "soften" the blow. The ECB is unlikely to increase future asset purchases.
WEEKLY HIGH IMPACT NEWS:
09:30 GB- CPI/RPI
09:30 GB- Employment
13:30 US- Retail Sales
13:30 US- PPI
14:15 US- Industrial Production
15:30 US- Crude Oil
18:00 US- FOMC Decision
00:00 All-Day- flash PMIs
00:30 AU- Employment
08:30 CH- SNB Decision
09:30 GB- Retail Sales
10:00 DE- ZEW Survey
12:00 GB- Bank of England Decision
13:30 US- CPI
13:30 US- Current Account
13:30 US- Weekly Jobless
10:00 EZ- final HICP
13:30 Housing Starts/Permits
John M. Bland, MBA
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