With only a few weeks until the end of the year, we’ve giving you this free guide to help you to earn more with TIQL. Covering the markets and dates to watch this week, economic news and announcements cause financial markets to move a lot, and may provide some opportunities to trade.
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USD: FOMC December Rate Hike
The vast majority of USD traders expect the FOMC to raise rates from 1.25% to 1.5% (Wednesday 13th 7pm GMT) so that’s already been priced in. What traders now want to know is where policy will be heading in 2018, which is a far less certain question.
Federal Chair Yellen steps down in February at the end of her first term so other voices are now becoming more significant. Jerome Powell will step up but there are also other key vacancies in the Bank and this leaves policy direction harder to forecast.
So far, officials have seemed confident of the dollar’s recovery so more interest rate rises are likely to be mentioned. Some even say there could be as many as three or four in 2018. The fly in the ointment is the persistently low inflation and concerns that the recovery is weaker than it appears. The Press Conference (13th 7.30pm) should reveal key points and see the dollar traded hard.
Global: Libor Bank Rate
The London Interbank Offered Rate is a key figure in the global banking industry used to price more than $350tn of financial products around the world. It’s the average figure at which banks are prepared to lend each other money and was established in London in 1986. There are actually a number of Libors and their rates often change daily.
The problem is that the 2008 scandals surrounding setting the rate mean it’s on its way out as no-one wants to be involved in setting it. It was rate-rigging in the City of London that is heavily linked to the crash. There is a new looming concern about what it will be replaced by.
This week a new CHF 3-month Libor Rate will be set (Thursday 14th 8.30am GMT) and it is a red-flag event in finance. Standing at -0.75%, there are conflicting views about what will happen. The rate is negative due to the ECB’s rather unconventional reflationary policy. Expect the EUR and GBP to react to any significant change.
GBP: BoE base rate
This week we’re all about the rates and the third of our key event posts focuses on the volatile currency of the year, GBP. The Bank of England reveals its latest base rate (currently 0.50%) only hours after Libor (Thursday 14th 12pm GMT), so expect volatility for the duration. The MPC is likely to return a 0-0-9 vote against raising rates (against 7-0-2 when it raised them previously) so the focus will be on the Monetary Policy Summary to see what the Committee’s views are on the future.
45 minutes later the ECB reveals its Minimum Bid Rate (Thursday 14th 12.45pm GMT), which could affect the EURGBP pair. As the two zones edge closer to a Brexit deal, traders have reacted well reaching a high not seen for six months last week so Thursday could see a lot of GBP action.
Here are the main news events to look out for this week:
- Tue Dec 12
- 09:30:00 GMT GBP CPI y/y
- 13:30:00 GMT USD PPI m/m
- 19:00:00 GMT EUR ECB President Draghi Speaks
- 22:15:00 GMT AUD RBA Gov Lowe Speaks
- Wed Dec 13
- 09:30:00 GMT GBP Average Earnings Index 3m/y
- 13:30:00 GMT USD Core CPI m/m
- 13:30:00 GMT USD CPI m/m
- 15:30:00 GMT USD Crude Oil Inventories
- 19:00:00 GMT USD FOMC Economic Projections
- 19:00:00 GMT USD Federal Funds Rate
- 19:00:00 GMT USD FOMC Statement
- 19:30:00 GMT USD FOMC Press Conference
- Thu Dec 14
- 00:30:00 GMT AUD Employment Change
- 00:30:00 GMT AUD Unemployment Rate
- 09:30:00 GMT GBP Retail Sales m/m
- 12:00:00 GMT GBP MPC Official Bank Rate Votes
- 12:00:00 GMT GBP Monetary Policy Summary
- 12:00:00 GMT GBP Official Bank Rate
- 12:45:00 GMT EUR Minimum Bid Rate
- 13:30:00 GMT USD Unemployment Claims
- 13:30:00 GMT USD Core Retail Sales m/m
- 13:30:00 GMT USD Retail Sales m/m
- 13:30:00 GMT EUR ECB Press Conference
- 17:25:00 GMT CAD BOC Gov Poloz Speaks
Some Markets to Watch…
AUDUSD: Although this pair is looking heavy, the Aussie is at a key technical level with previous demand, the half way back is nearby and an ascending trend line. The 0.75 price is a key level to watch. Keep an eye on any moves on the commodities such as gold, which will impact this FX pair.
BTCUSD: After an eye-watering retracement last week where we saw $13000 tested, it looks like bitcoin may try and test the all-time highs once again.
EURUSD: Pundits have been calling the end of Euro for some time but this pair remains in the range for now. We are watching the edges of the consolidation for the market to tip its hand.
Gold: Have we broken down or are we just running the stops at these lows? Daily closes under 1250 and we could see a deeper move down. Closes above 1260 and the bulls may try for some of the higher numbers.
USDJPY: We remain within the yearly range for now. The main levels to watch are 110.50 and 114.50 to see if these are defended as they have been before.
USDCAD: The lows held last week after that very bearish daily candle. It looks like the highs may be tested and we have the equidistant swing completing into the 200 SMA.
Whichever way you think these markets are going to go, you can trade these and other markets from as little as 1 cent with TIQL.
Markets can really move during news events; all TIQL trades come with guaranteed stops to always protect you from losing more than you have invested in a trade.
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