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Week 19 Review – Forex Traders Weekly Wrap : Mon 8th to Fri 12th May 2017

Welcome to our ALL NEW BEFORE & AFTER FORMAT. In our exclusive in-house analysis we review what happened last week by currency, data point and outcome. This enables you to tally the expectations issued in last Sundays Week Ahead Traders Calendar with the actual data released. From this you can clearly see what data beat or missed expectations, and correlate that outcome with the price action you see on your charts. Simple yet brilliant !


Wednesday 10th May

Crude Oil Inventories – Prior -2 million | Actual -5.2 million

Thursday 11th May

PPI – Prior: -0.1% | Expected 0.2% | Actual 0.5%

Friday 12th May

UoM Consumer Sentiment (Preliminary) – Prior: 97.0 | Expected 97.0 | Actual 97.7

CPI data release Prior -0.3% | Expected 0.3% | Actual 0.2%

Retail Sales – Prior -0.2% | Expected 0.6% | Actual 0.4%

USD Summary: A relatively quiet week for the USD which hasn’t materially changed progress towards continued tightening in the June meeting. While CPI and retail sales both missed their expectations they were both positive suggesting continued growth in the economy. However, it is important to remember that political turmoil again has reared its ugly head in the US so we need to be mindful of any future impact this could have on the world’s reserve currency.


Wednesday 10th May

ECB President Speaks

Friday 12th May

German Preliminary GDP – Prior 0.4% | Expected 0.6% | Actual 0.6%

 EUR Summary: Similar to the USD a fairly quiet week this week with the most notable news event being the speech to the Dutch parliament by ECB president Drahgi. There was little change in rhetoric from previous speeches continuing to support their current economic stimulation programme and continuing to talk about the possible risks as opposed to the upside for the Euro. EU Economic Forecasts suggest that the single currency region will grow faster than originally anticipated but that inflation will remain low, predominantly driven by low wage growth. Now the French elections are out of the way clearly the Euro is the currency to watch as we can begin to see improvements, it remains to be seen how quickly they build however.


Thursday 11th May

Manufacturing Production – Prior -0.3% | Expected -0.2% | Actual -0.6%

Interest Rate Decision, Inflation Report and Monetary Policy Summary – Prior 0.25% | Expected 0.25% | Actual 0.25%

GBP Summary: The week started bad for the UK economy with a decline in Manufacturing production. However, with manufacturing only contributing towards around 10% of GDP it probably won’t have a material impact on economic growth figures going forward. Overall in the quarter manufacturing rose by 0.3%.

The big news this week was the UK interest rate and monetary policy statement which maintained a relatively neutral tone with comments in the statement suggesting that this may continue over the forecast period. Inflation was revised up slightly in the short term but down in the longer term, and there remained concerns around wage growth, especially as companies feel reluctant to increase wages until Brexit negotiations been agreed. So as per the week ahead article last week, there were no major statement shocks leading up to the general election and the UK economy largely remains on hold at present.


Tuesday 9th May

Retail Sales – Prior -0.1% | Expected 0.3% | Actual -0.1%

 AUD Summary: After last month’s disappointing numbers the RBA were hoping for something a little more upbeat but alas that wasn’t the case. This will continue to keep the RBA in a dovish frame of mind moving forward as Australia relies heavily on consumer spending for growth figures.


Wednesday 10th May

Interest Rate Decision and Monetary Policy Statement – Prior 1.75% | Expected 1.75% | Actual 1.75%

NZD Summary: As expected the RBNZ kept interest rates at 1.75% to continue to support inflation and economic growth, and gave no indications of an interest rate increase until late 2019. It’s hard to see how this will be maintained with inflation already at 2.2% in the 1st quarter against a projected 1.5%.

In other news:

Some good news for the global economy is that the Chinese trade balance saw a healthy increase last month with CPI also beating market expectations. China is a good barometer for global economic health being the world’s second-largest economy and one that uses significant resources as part of its infrastructure programme.

Source: Content written by Andi Thornton, TradingHUB Chief Analyst – www.TradingHUB.co.uk