Economic Update

The U.S. Economy Busts a Move – October 6 – 11 2014

The U.S. economy starts to “bust a move” as it continues to “shake off” the rust of slow growth and recovery.

The USD is flexing its’ economic muscle as indications of recovery are starting to come on strong for the last quarter of 2014.

The U.S. economy looks to continue this pace against its Asian, Euro and U.K. counterparts that may bode sheepish against the U.S. in the absence  of significant economic strength for their respective pairings.

This last week, European Central Bank President Draghi announced the general parameters for the euro zone’s version of Q.E.

The program will begin its’ purchasing program in the middle of October and will be ongoing for the next couple of year’s.

We’ll see how well received the program will be for market trader’s as the ECB takes a “hands on” approach in stimulating euro zone economies.

This week’s significant market news might be a bit light in comparison, but expect a bevy of profit making opportunity on your USD and Asian market pairings.

This week’s events include:

  • For the USD – The Fed’s September minutes release. The release is expected to hold true to what has already been announced in regard’s to forward guidance on interest rate hikes and the final tapering of Q.E.

            The 10 year bond auction, although not on high priority alert , may also  reveal an investor confidence boost that may show a strengthening impact on the USD.

            We can anticipate seeing the U.S. weekly unemployment claims continuing in an overall downward trend heading into the holiday hiring season.

 

  • For the Euro – ECB President Draghi holds court this week as we look to see if further plans are revealed for the ECB’s vision for its’ asset purchasing program. President Draghi may be putting a blase attitude towards euro economies, but this appears to be a calculated front in order to diminish the significant realities of weakness that continue to sting euro zone economies.

 

  • For the loonie (CAD) – Ivey PMI will be released. This early  number for the Purchasing Manager’s Index should meet forecast expectations of 53.4.

Month over month building permits. With the oncoming winter month’s approaching, we may anticipate  the month over month projection to hold level, but can look ahead to a small stumble next month as seasonal adjustments roll in for the winter month’s.

The employment change and unemployment rate – With construction sectors shedding its summer skin, will the retail sector be enough to offset the employment numbers as holiday hiring is underway?

 

  • For the Aussie (AUD) – The Cash Rate, expected to remain untouched and the Reserve Bank of Australia (RBA) Rate Statement announcement as we look to clues on forthcoming monetary policy and interest rate decisions. The rate looks to remain steady at 2.5% well into the first half of 2015.

Employment change and unemployment rate – As the forecast is for the Aussie economy to shed  a few jobs, we may see a slight uptick in unemployment from the previous month heading into the holiday season.

 

  • For the Kiwi (NZD) – The Business Confidence announcement looks to cautious optimism going forward for the remainder of this year.

 

  • The Sterling – Month over month manufacturing production that could indicate a slight contraction from the previous month.

Asset Purchase Facility and Official Bank Rate announcements which are both expected to remain steady.

 

  • For the Yen (JPY) – Japan’s monetary policy statement and Bank of Japan (BOJ) press conference.

The BOJ will be navigating a justification for their overly optimistic inflation numbers to hit their target. The BOJ is confronting a “headwind” of weakening numbers spawned by the tax hike that had taken place in April.

We’ll have to see if the BOJ’s somewhat skewed perspective can “shake off” market concerns , at least for awhile. Japan’s hope is that job sector and income growth will carry the load into the first half of 2015. This may not be enough to cloud the real picture of Japan’s economic woes as the numbers come into focus.

 

Now that we’re in the last quarter of the year, take advantage of the opportunities that are starting to become self evident with the USD and Asian pairings. The revelation of these market disparities look to bring you many opportunities for profit making trades that will deliver holiday happiness any way you slice it.

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