Carzy like cat
Canada’s GDP suffered a decline in growth from 0.4% to 0.1% at the start of March. With its second data release in a month giving it a blue moon quality, does anyone expect things to get better? Nope – well, maybe one or two pundits. But CAD may just go a little crazy. Check out the action on Thursday 29th March at 1.30pm GMT.
Canada hasn’t had the best month. Trump openly admitted to making up stats in a meeting with Trudeau while Crude Oil has given the Loonie a good ride. Talk at the moment suggests a rate hike could be on the cards next week; inflation hit a 3-year high and Trump’s new deadline for NAFTA puts both Mexico and Canada under threat of steel tariffs.
The dollar jumped half a cent as the week closed on Friday 24th and markets are likely to be choppy as local markets open on Monday 27th.
Just your average American Joe
A lot has changed since last month’s CB Consumer Confidence on Tuesday 27th at 3pm GMT. Not least Trump’s steel tariff that threatens to start a global trade war with traditional trade partners like Europe etc. So has this potential trade disaster affected consumer confidence?
Forecasts suggest the American public feel just great with the index rising from 130.8 to 131.2. To be fair, asking 5,000 average Joes with limited access to expert data or even international news what they think will happen to employment rates, business conditions and the overall economic outlook isn’t necessarily the best way to judge what will really happen. But traders love it so it will affect the markets.
Also big on the USD markets this week is Final GDP, out Wednesday 28th at 1.30pm GMT. Dropping towards target by 0.1% to 3.2% in December, forecasts are for another drop to 2.7%, though this is a rise of 0.2% from the actual Preliminary GDP results a few weeks ago. Smack in the middle of the healthy range, this data is likely to boost the dollar.
Finally, Crude Oil Inventories on Wednesday 28th at 3.30pm GMT should be interesting. Last week saw the first drop in a while by -2.6M barrels and oil saw the biggest gains in 8 weeks. OPEC discussions about ending their agreement to cut production indicate they could actually keep that going until 2020, though seeing the US make the most gains from their reductions must be galling.
Time for a plan
New Zealand’s trade deficit is forecast to shrink by a massive 466 million to -100M if forecasts are correct for 10.45pm GMT on Sunday 26th March. That should set the mood for this week’s Kiwi trading, but the highlight will actually be the ANZ Business Confidence index, out Wednesday 1am GMT. Plan your week’s trade around it.
Business Confidence has been in the doldrums for months though it perked up in February, climbing to -19 (the best it’s been since last September – it’s been seriously depressed). The range of opinions about where it goes from here could be down to who’s wearing their rose-tinted glasses, but a slim majority of pundits see another drop this week. The threat of Trump’s trade war with China would put New Zealand in the middle and NZD could be turbulent.
While that doesn’t sound great, turbulence can bring its reward if you judge the market mood well and play it right. Are you going to play minute by minute or across the week? Options, options. Currency trading can certainly be fun.
CAD just about staying afloat
CAD sank to its lowest level against the dollar since June 2017 at the end of last week (76.41cents) signalling troubling times for the north American currency.
Clashes over oil stockpiles between OPEC and the States have ricocheted sending the Looney (CADs alter ego) into a spiral. Deeply dependent on their oil reserves, Wednesday’s Crude Oil Inventories at 2.30pm GMT, could change its fortunes again.
But oil isn’t the half of it. Unhappy grumblings about the NAFTA in Canadian economic circles and the potential looming trade war with their southern neighbour weren’t helped by Trump’s glibly delivered false news data in his meeting with Trudeau. Admitting he made up details about a trade deficit, Trump seems to have no qualms about upsetting the States’ friends around the world.
A speech by Reserve Bank of Canada’s Senior Deputy Governor Wilkins could have a few tidbits to entice traders to make a call on how to close the week at 6.45pm GMT on 22nd. But CAD investors will be watching two key figures apart from Trudeau and Trump this Friday.
Rocky CPI figures (23rd 12.30pm GMT) will be watched hoping for another gain after the surprisingly large 0.7% against the 0.4% predicted last month. Core Retail Sales, Friday 23rd March at 12.30pm GMT, are more volatile heading down to -1.8% against 0.1 gain predicted last month. This month it could go either way but another negative would sting Looney bulls badly.
HMS GBP in the markets this week
Mark Carney, Chair of the Bank of England, has his moment in the sun on Thursday 22nd March 12pm GMT as the Official Bank Rate is revealed. Pundits have priced a rise in for May, but there are mutterings of an early rise that could shake a few foundations. Nothing is off the cards this week.
The MPC Official Bank Rate Votes (Thursday 22nd March 12pm GMT) has held steady at 0-0-9 since the rise in November, but many expect to see that change as some voices express concerns about the health of the economy. The question is how many want a rise and how many think that would be a disaster. The Policy Summary, also Thursday at 12pm GMT, should give traders a good view of the Bank’s view of the economy.
Before they cast their votes, the CPI and PPI monthly data should give the Monetary Policy Committee more to think about on Tuesday 20th 9.30am GMT. CPI has been rising above inflation targets at 3% or more since September 2017, while PPI is volatile making forecasts difficult. The Average Earnings Index is another one to chuck in the mix on Wednesday 21st at 9.30am GMT. Finally climbing to more than 2% last August, the current 2.5% could jump again depending on who you talk to.
With more multinationals shifting operations to the continents and the ‘subsidiary’ offices in Frankfurt, Rotterdam and elsewhere taking shape, London’s status looks set to take a battering. Will a rate rise depress the currency like the iceberg for Titanic, or could the domestic boost be the life raft the sinking ship has been floundering for?
We will be making some important changes here at TIQL in the way we operate which we wanted to share with you.
Our mission is to offer the world the chance to trade with the lowest cost and lowest risk. After considerable research we have made the difficult decision not to renew our operating licence. This means that we must close all TIQL US$ accounts in April. Naturally, your TIQL US$ balance will be refunded. TIQL will then continue in a free-to-play mode while we work on new regulatory options for real money trading, but that will likely take another few months.
TIQL US$ trading stops on April 6th and from April 9th TIQL will no longer be regulated by the Isle of Man Gambling Supervision Commission. If you have TQD in your account you will be able to trade but you will not be able to convert your TQDs into US$, until further notice. We will not charge for withdrawals starting on April 5th, to help you with this. If you do not request a withdrawal yourself before April 8th we will attempt to refund your current balance to the most recent deposit method we have on file for you (this may take up to a week to be processed). We advise you to make sure that your details are correct to avoid problems.
We apologise for the downtime and hope that you will join us once we are up and running again!
This is it. Never mind the threat of global war with Russia kicking off in Europe, markets sense a rate rise of 0.25% from the FOMC (Wednesday 21st 6pm GMT) and everyone has an opinion about it.
Expect massive volatility as things go wild during the Press Conference (Wednesday 21st 6.30pm GMT) as Jerome Powell faces the press. No matter what he does, raise rates or leave them be, the stock, currency and commodities markets want to know why.
Trump is slapping trade tariffs on countries like parking tickets, threatening trade wars with every continent that could knock the domestic economy for six. China is the latest in the firing line and we can’t see that ending well.
It’s got to be said that GDP is coming in close to Trump’s 3% target and his Twitter feed shows his usual modesty around that. Of course, stock market gains and recent improvements in small business confidence are largely powered by his much-touted Tax Cuts and Jobs Act slashing business rates from 35% to 21%, rather than actual growth, but some argue his policies are actually leading to massive debt. The sums don’t add up, depending on who you’re asking.
So, long story short, Powell is in a very hot seat and needs to steer the Reserve Bank’s fiscal policy to help calm the economic waters. Plan your in and out points and enjoy the USD ride this week.
Trump can talk the talk for his cohort of loyal fans, but facts and figures can be made to suit anyone; I mean, they speak for themselves. All eyes are on the health of the US economy as key data for producers, consumers and shopping comes in.
The US’s Consumer Price Index, based on figures for February, are set to fall if analysts are correct. Predictions are that last month’s surprise 0.5% growth will drop back to 0.2% on Tuesday 13th at 12.30pm GMT. Core CPI, out at the same time, looks a little steadier but pundits still feel a drop is on the cards – 0.3% to 0.2%.
Trumps’ America First rhetoric got real as he slammed import duties on steel last week threatening to cause a trade war with Europe and other international trade partners. That won’t affect the Producer’s Price Index (Wednesday 14th March 12.30pm GMT), which is based on last month’s data. Forecasts indicate a fall in price growth from 0.4% to 0.1%. Next month should be very interesting here.
Retail Sales, Wednesday 14th March at 12.30pm GMT, looks like it will be the biggest USD news this week. The shock drop from 0.0% to -0.3% shook markets, who will be keen to know if this month’s turnaround prediction to 0.3% is true.
When things aren’t what you expect
When is a Budget not a Budget? When it’s a Spring Statement. The British Chancellor’s attempts to wriggle out of producing two budgets a year, appears to have ended up in a rebranding exercise. The Spring Statement, delivered on Tuesday 13th at 11.30am GMT, is sure to be catch traders’ attention whatever it’s called.
What a government chooses to spend its tax money on (or not) can make or break an economy. With the clock ticking over Brexit, this is the last Spring Statement for the country before the big day in March 2019. We get to see what Philip Hammond reckons is in store for the U.K. economy in terms of income and expenditure. He will outline his plans, including expected spending and income levels, borrowing levels, financial objectives, and planned investments.
Last year’s Spring Statement was a shambles with unpopular announcements overturned rapidly. Can he do any better this year, and how will the markets take it?
Deal or no deal?
The latest news leaking out hints that OPECs price manipulation could be coming to an end. This could be good news for bears as US Crude Oil Inventories, Wednesday 14th at 2.30pm, has also swung back to increases for 3 weeks in a row.
Could a glut of oil push prices below $60 a barrel? America First is having all sorts of consequences. Cheap oil is heading over to prime oil markets in Asia. Thinking it through, that pushes down production prices in Asia so maybe this is a quick buck rather than a long-term plan for Trump’s buddies. It could certainly come back to bite US producers.
But for now, the ongoing rally since July could be about to falter.