Welcome to the easyMarkets weekly review where we look back over the results of some of the previous week’s economic indicators. It gives us the chance to reflect on how much expectations were met or missed and to examine a successful trade you could have made this week.
Event: UK Consumer Price Index (May)
Date: Tuesday 13 June 2017 at 08:30 GMT
Markets affected: GBP/USD, EUR/GBP
Trending hashtags: #gbp, #cpi
Consumer prices increased higher than expected in May confirming the Bank of England’s outlook of inflation surpassing their preferred 2% target. The news sent the cable higher on Tuesday, hitting a session high of 1.2740. CPI increased 0.3% for the month of May and 2.9% on an annual basis according to the Office for National Statistics. Economists’ mid-term outlook for inflation rose to 2.7% annually. The producer price index also rose 2.8% on an annual basis, slightly weaker than the expected 2.9% and retail sales rose 3.7% on an annualised basis, moderately above the 3.5% prediction.
Event: US Retail Sales (May)
Date: Wednesday 14 June 2017 at 12:30 GMT
Markets affected: EUR/USD, GBP/USD
Trending hashtags: #usd, #retail
Retail sales in the US dropped 0.3% in May, their largest fall in over a year. Decreasing motor vehicle sales and discretionary spending are the main reasons behind the fall according to the Commerce Department. The reduction was the biggest since January of last year and took analysts by surprise who had been forecasting a 0.1% increase.
Event: US CPI (May)
Date: Wednesday 14 June 2017 at 12:30 GMT
Markets affected: EUR/USD, GBP/USD
Trending hashtags: #usd, #cpi
The Consumer Price Index for the US fell to -0.1% taking many by surprise as expectations had been for it to reach 0.2%. The USD tumbled on the poor inflation data. Falling gasoline prices are being blamed as they dropped 5.4% in April. On an annualised basis CPI grew 1.9%.
Event: US Fed Interest Rate Decision
Date: Wednesday/Thursday 14 / 15 June 2017 at 18:00 GMT
Markets affected: EUR/USD, GBP/USD
Trending hashtags: #usd, #interestrate
The US Federal Reserve rose interest rates as most had been anticipating by 0.25% bringing the rate to 1.25%. The US dollar index, which is measured against a basket of other currencies, rose on the news by 0.4% to 97.31. The Fed commented on one more rate hike is likely for the year and outlined their plan for normalising monetary policy including reducing the balance sheet which has reached $4.5 trillion.
Event: BOE Interest Rate Decision
Date: Thursday 15 June 2017 at 11:00 GMT
Markets affected: GBP/USD, EUR/GBP
Trending hashtags: #gbp, #interestrate
As expected the Bank of England (BOE) maintained the interest rates policy. However, three members of the Monetary Policy Committee (MPC) called for a rate hike – that’s 2 more than what many were expecting to share this view. With Inflation hitting four year highs, there is increasing pressure on the BOE to take action.
Trade of the Week
Time in: Wednesday 14 June 2017 at 14:00 GMT
Market : EUR/USD
Investment: $500 with 200:1 leverage
Time out: Thursday 15 June 2017 at 18:00 GMTP&L: $1,222
If you had bought the EUR/USD with a $500 margin at the price of 1.12782 and closed the deal after the Fed interest rate decision on Wednesday which saw the USD gain 1.22%, you might have more than doubled your investment with a tidy $1,222 profit. Note this example does not take into account spread.
Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).
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