Thursday February 23, 2017 - 09:47:01 GMT
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Forex Trading Ideas For Thursday 23 February 2017
Trading Ideas for 23 Feb 2017
WEEKLY Forex Economic Calendar:
23 Feb Thu
13:30 US- Weekly Jobless
14:45 US- flash Service PMI
24 Feb Fri
13:30 CA- CPI
15:00 US- New Homes Sales
15:00 US- final Univ of Mich Survey
- Markets seemed to have trouble Wednesday digesting the latest Fed policy Minutes. The Minutes left open the door to the RISK of a Rate hike as early as the March 15 FOMC ("very soon"). However, no clear signal was sent. It appears to me they want to hike in March. They hinted that the February employment data on March 10 could be decisive. The next Fed meeting is only five days (including a weekend) later.
- The Fed appears to want to embark on a policy "normalization" path soon. Traders still have trouble believing the Fed has the courage to go through with a rate hike. For Yellen to have any future credibility, she should hike rates soon.
- Fed Funds futures odds for a March Fed rate hike are only 34% (38%), suggesting they are skeptical. Markets now place the odds for rate hikes by June at 116% (118%). That is 100% for one hike (March?) plus 18% for a second move, or possibly something in-between.
- On top of the Fed muddle, investors have begun to focus on the risk from key leadership elections in Europe over the rest of the year. Many worry about the possibility of a swing to right as has been seen in the U.K. (Brexit) and U.S. (Trump). Such could be a challenge to the status quo in the EU. These concerns are being manifested in a weaker EUR and demand for soveriegn debt (flight-to-safety).
- Moderate French Presidential candidate Bayrou has anounced that he will not be running and said he is backing Macron. The news gave the EURUSD a lift as it was thought the decision boosts Macron's chances against long-shot candidate Le Pen.
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