Tuesday February 14, 2017 - 20:44:56 GMT
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Forex Trading Ideas For Wednesday 15 February 2017
Pre-Open Trading Ideas for 15 Feb 2017
WEEKLY Forex Economic Calendar:
15 Feb Wed
09:30 GB- Employment
13:30 US- Retail Sales
13:30 US- CPI
14:15 US- Industrial Production
15:00 US- Yellen Testimony
15:30 US- EIA Crude
16 Feb Thu
03:00 AU- Employment
13:30 US- Weekly Jobless
13:30 US- Housing Starts/Permits
17 Feb Fri
09:30 GB- Retail Sales
- There were no major surprises from Fed Chair Yellen's testimony. As expected, she left the door open to a possible rate hike at its March meeting. She said that the Fed would consider rate hikes at future meetings. Markets took the tone of her comments to be a bit more hawkish than anticipated.
As for trading, I think tthe implications are that the February employment data due in early March could tip the scale either way on the next Fed policy decision. I sense she is keeping all options open for that meeting. One argument in favor of a March hike is that it would keep the Fed on track for three rate hikes this year. The central bank has recently fallen into a pattern of rate changes at the Four Fed meetings that fall just before the end of each quarter.
- As for shrinking the Fed balance sheet, Yellen said the Fed would like to shrink the Fed's balance sheet substantially once the process of policy nomalization has progressed to the point where the Fed funds rate has stabilized. She said they would prefer to hold only Treasuries and when they start to shrink the balance sheet would prefer to let debt run off rather than to sell off existing paper and thus back off in an orderly manner.
- U.K. January CPI data missed street estimates and even though the data increased, the GBPUSD has fallen. Aside from the U.S., U.K. forex markets are the most sensitive to economic data. Today also sees the release of the German ZEW Survey.
- Fed Funds futures odds for a March Fed rate hike are now 36% (30%). Markets now place the odds for a single rate hike by June at 110% (104%).
Risk-On Posture In Equities late In The Day on 14 February 2017
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