Weekly Report! Week Before Christmas Edition!
This was another busy week of economic reports, with the European Union especially busy as many major economies try to push out one last surge of reports before the holiday season hits with full force. In addition to the major reports that this weekly summary covers, there were some other major stories in the news regarding the economy. The American stock market began re-gaining some lost strength based on the surprisingly high earnings being recorded from the technology sector this winter. Oil prices are also rising again, with traders looking at growing demand and OPEC's actions as reasons to invest further in the commodity.
There are a large number of economic reports to get through before things begin quieting down for the end of the year, so without any further wait let's jump right into this week's installment of the week in review.
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Still starting in the States
The U.S. released three major economic reports this week. The Bloomberg Global Confidence report for December showed an overall score of 58.87, which is slightly worse than the 60.3 rating recorded for November. The Federal Reserve looked at interest rates, and decided to keep them at 0.25%, the same as last meeting and this was the exact action that had been predicted. In addition to this, the initial jobless claims were released on December 12th, and showed 480K new claims, up from the 465K which was initially predicted.
Up to Canada
Canada only had two major reports this week, both Consumer Price Index (CPI) reports. The month to month numbers for November show an increase of 0.5% in inflation, more than the 0.3% which had originally been predicted. The year to year numbers show a 1.0% increase in inflationary pressure, higher than the 0.8% originally projected.
Across the Atlantic to Britain
There were several major economic reports released from the United Kingdom this week. The CPI reports showed a month to month change of 0.3% (as opposed to the 0.2% predicted), as well as a year to year change in inflation of 1.9%, slightly higher than the 1.8% predicted.
Aside from inflation, there were also job reports released. The GBP Claimant Count Rate for November showed a 5.0% number as opposed to the 5.1% that had been predicted. This report measures the number of people who claim unemployment but are actively looking for work. The jobless claims change in November came in at -6.3k, as opposed to the 12.5k predicted, giving a glimmer of good news on the job front.
Finally, there were the retail reports. The month to month reports for November showed a decline of a -0.3%, which is quite a bit worse than the 0.5% gain which had been anticipated. The year on year retail sales numbers for November reflect this, coming in at 3.1%, quite a bit lower than the 3.7% which had been expected.
Insanely busy week for the EU
The section title just about says it all for this one. There were over a dozen major economic reports released from the European Union this week, and many other lower impact reports, as well. The Euro-Zone Employment report for the 3rd quarter shows quarter to quarter change of -0.5%, the same number from the second quarter, as well. The Euro-Zone employment for the year on year numbers show a -2.1% drop in the 3rd quarter, more than the -1.8% originally expected.
Several ZEW surveys were released this week, as well. The German economic sentiment ZEW survey for December came in with a score of 50.4, slightly better than the 50.0 which had initially been predicted. The German ZEW Survey for current situation was also released in December, and showed a -60.6 score, slightly worse than the -60.1 which was first predicted. One Euro-Zone ZEW Survey was also released, and the overall EU score on economic sentiment came in at 48.0, noticeably lower than the 50.0 that was expected.
There were 3 German IFO reports released, as well. The Business Climate IFO for December showed a score of 94.7 over the 94.5 prediction, but probably not enough of a difference from estimates to have a major impact. Similar spreads were seen with the other two reports, as the Current Assessment showed a 90.5 over a prediction of a 90.0, while the Expectations show a 99.1 over a 99.0.
The Euro-Zone released plenty of reports separate from the Germans. The Consumer Price Index reports for November show a 0.1% inflationary pressure increase, half of the 0.2% which was predicted. The year on year numbers for November show the same gap, as the inflation rose 0.5%, instead of the 0.6% experts projected.
The Euro-Zone Current Account s.a. for October showed a deficit of -4.6 billion EUR, which was still less of a deficit than the -5.0 billion from September. The n.s.a. numbers show a -3.9 billion EUR as opposed to the -4.7 billion from October. The Euro-Zone trade balance s.a. for October sits at 6.3 billion as opposed to the 5.7 billion predicted.
To the Land of the Rising Sun
Japan released a couple of important economic reports this week. The Tertiary Industry Index for October showed a 0.5% growth, as expected, indicating some positive movement in the direction of Japan's economy. What was even bigger in the news was the Bank of Japan's decision to keep interest rates at their historical low of 0.10%, just as predicted.
Finishing with the Aussies
There were only two major economic reports from Australia this week: the GDP reports from the 3rd quarter. The quarter to quarter numbers showed a growth of 0.2% for the third quarter, only half of the 0.4% predicted. This difference is seen in the year to year numbers, which showed Australia's GDP grow 0.5% as opposed to 0.7% predicted.
In Conclusion
This was a busy week of economic reports, especially for the European Union, heading into the December holiday season. With the Forex market there is always plenty of trading going on, so even with the distractions of the holiday season make sure to keep an eye on those fundamental reports and technical analysis to help make sure you're on the right side of your favorite currency pairs. Hopefully all your shopping is out of the way so kick back, enjoy a few days off, and as always, good trading!
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Market Sentiment
In this section, we will try to gain further insight into the Forex market. We will do this by looking at a poll of market participates and what I call global strength.
Currency Poll
Polls are used to measure the sentiment of market participants. The results are used as a contrarian indicator because they express optimism at market tops and pessimism at market bottoms. Therefore, a high percentage of votes can be used as an indication that the market will do the opposite.
Our poll is only concerned with how the four major pairs will close the next week: up, down, or even. The results are below.
Poll Results:
EUR/USD
Close Up: 52%
Close Down: 37%
Close Even: 11%
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USD/JPY
Close UP: 48%
Close Down: 48%
Close Even: 4%
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GBP/USD
Close UP: 48%
Close Down: 50%
Close Even: 1%
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USD/CHF
Close UP: 61%
Close Down: 30%
Close Even: 11%
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Global Strength
Global strength looks at the individual currencies to determine how they are doing globally on a year to date basis. My hope is that this will give you a view of the market typically not view, thereby; giving you an edge. We will look at the following currencies: USD, EUR, GBP, CHF, JPY, CAD, AUD, and the NZD. We will compare each currency separately and then we will compare them all together. The currencies are shown in number of pips up or down on a year to date basis across the pairs shown. (Note: Just click on the picture to view.)
USD
EUR
JPY
GBP
CHF
CAD
AUD
NZD
Global Strength
Accumulative Global Strength
Good trading,
Jason Fielder
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