Daily Video Review - 30/10
- Donald Herison
- English
- MARKETS NEWS
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Yesterday, the FOMC Meeting Minutes were released following the Feds two day meeting. Following the release US stocks declined.
Asian markets were mixed. The Nikkei climbed 0.647% as the Dollar strengthened against the Yen after the FOMC statement.
European markets are lower today. The German Unemployment Change was released and was significantly better than expected. Investors instead, focused on the Fed statement and sentiment dropped.
Oil climbed after the EIA released inventory data. The data showed supplies to increase by a lower amount than expected.
Gold lost its appeal as a safe haven asset as the Fed showed confidence in the economy. Many are now speculating that the Fed could be inclined to raise rates sooner and this dampens the appeal further.
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What is it? It's among the primary tools the BOJ uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it projects the economic outlook and offers clues on the outcome of future rate decisions.
When? October 30th at 8:30pm Eastern Time.
Trading Tip: If the announcement will hint towards higher interest rates, you can expect the JPY to rise.
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What is it? It checks the change in the price of finished goods and services sold by producers.
It's a leading indicator of consumer inflation - when producers charge more for goods and services the higher costs are usually passed on to the consumer.
Usual Effect If the number is higher than the forecast, you can expect the AUD to rise.
When? October 30th at 8:30pm Eastern Time.
Trading Tip: This announcement can greatly affect the AUD, make sure to make your trades before.
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What is it? Fed chair Yellen is due to deliver opening remarks at the Board of Governors of the Federal Reserve System's National Summit on Diversity in the Economics Profession, in Washington DC.
As head of the central bank, which controls short term interest rates, she has more influence over the nation's currency value than any other person. Traders scrutinize her public engagements as they are often used to drop subtle clues regarding future monetary policy.
Usual Effect If the announcement will hint towards higher interest rates, you can expect the USD to rise.
When? October 30th at 9:00am Eastern Time.
Trading Tip: This announcement can greatly affect the USD, make sure to make your trades before.
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Here are 4 tips for today's trading. This will help you decide where you should invest and what to look for:
1) Get Ready for GDP
At 8:30am ET, the US Bureau of Economic Analysis will release its first official reading of gross domestic product for the third quarter.
It's widely expected the economy grew by 3%, which would be solid, but not great.
Keep in mind, the first estimates for quarterly GDP tend to be a little off. The numbers aren't set in stone and will eventually be revised.
Also at 8:30, the Department of Labor will post data on weekly jobless claims.
2) Market Moves
US stock futures are not moving too much from their Wednesday closing levels.
One stand-out performer ahead of the open is Visa (V). Shares are pushing up by about 4% premarket after the company reported quarterly earnings that beat estimates.
3) Earnings
The New York Times (NYT), MasterCard (MA) and Kellogg (K) are set to report earnings before the opening bell.
LinkedIn (LNKD, Tech30), GoPro (GPRO), Groupon (GRPN) and Starbucks (SBUX) will report after the close.
4) International Markets Overview
European markets are mixed in early trading. The banking sector is looking particularly weak, especially among those banks that recently failed a regulatory health check.
Investors are watching various European economic figures coming in on unemployment, inflation and consumer confidence.
Asian markets were also muddled.
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What is it? It checks the the number of individuals who filed for unemployment insurance for the first time during the past week.
Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy.
Usual Effect If the number is lower than the forecast, you can expect the USD to rise.
When? October 30th at 8:30am Eastern Time.
Trading Tip: This announcement can greatly affect the USD, make sure to make your trades before.
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What is it? It checks the annualized change in the inflation-adjusted value of all goods and services produced by the economy.
It's the broadest measure of economic activity and the primary gauge of the economy's health.
Usual Effect If the number is higher than the forecast, you can expect the USD to rise.
When? October 30th at 8:30am Eastern Time.
Trading Tip: This announcement can greatly affect the USD, make sure to make your trades before.
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What is it? It checks the change in the price of goods and services purchased by consumers.
Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.
Usual Effect If the number is higher than the forecast, you can expect the EUR to rise.
When? October 30th all day.
Trading Tip: This announcement can greatly affect the EUR, make sure to make your trades before.
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What is it? Governor Poloz is due to testify, along with Senior Deputy Governor Carolyn Wilkins, before the Senate Standing Committee on Banking, Trade, and Commerce, in Ottawa.
As head of the central bank, which controls short term interest rates, he has more influence over the nation's currency value than any other person. Traders scrutinize his public engagements as they are often used to drop subtle clues regarding future monetary policy.
Usual Effect If the announcement will hint towards higher interest rates, you can expect the CAD to rise.
When? October 29th at 4:15pm Eastern Time.
Trading Tip: This announcement can greatly affect the CAD, make sure to make your trades before.
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What is it? It's among the primary tools the RBNZ uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.
Usual Effect If the announcement will hint towards higher interest rates, you can expect the NZD to rise.
When? October 29th at 4:00pm Eastern Time.
Trading Tip: This announcement can greatly affect the NZD, make sure to make your trades before.
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US stocks rallied yesterday ahead of the FOMC statement. Investors widely expect the Federal Reserve to end their quantitative easing program today. However, interest rates should remain the same. Earnings season has also been mostly positive and traders have welcomed results which have eased fears of an economic slowdown.
Asian stocks also moved higher across the region as European markets are higher today as attention has now turned to the FOMC statement at the completion of the Fed’s two day meeting.
Oil climbed after US data. The EIA will release data later today at 2:30pm GMT.
Gold is trading choppy as traders eagerly await the result of the FOMC Statement. If any hints towards raising interest rates are made we could see the metal drop below its support at 1,220.
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What is it? It checks the interest rate at which banks lend balances held at the RBNZ to other banks overnight.
Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.
Usual Effect If the number is higher than the forecast, you can expect the NZD to rise.
When? October 29th at 4:00pm Eastern Time.
Trading Tip: This announcement can greatly affect the NZD, make sure to make your trades before.
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Here are 5 tips for today's trading. This will help you decide where you should invest and what to look for:
1) The End of Stimulus
The Fed is expected to announce the conclusion of its massive stimulus program this afternoon. The quantitative easing program, which lasted for six years, is widely credited with supporting the economy and driving investors back into stocks in the aftermath of the financial crisis.
In addition to the expected stimulus announcement, the Fed is also set to give more details about plans for interest rates at 2pm ET. Most investors believe the first rate hike won't occur before June 2015, and many are betting it won't happen until the end of next year or later.
Any surprise announcements could have a big impact on trading.
US stock futures were relatively flat ahead of the major Fed announcements.
2) Facebook Flop
Shares in Facebook (FB, Tech30) are off by about 7% premarket after executives revealed plans to ramp up spending next year. Expenses in 2015 are expected to rise by as much as 75% versus the current year, which is irking investors.
Premarket data shows Facebook's fall is dragging down the Nasdaq.
3) Russia-Ukraine Gas Talks
Investors are keeping a close eye on Russia-Ukraine energy negotiations. Russian Energy Minister Alexander Novak and Ukrainian Energy Minister Yurii Prodan will attempt to hash out a temporary contract for Russia to deliver gas to Ukraine over the winter. This is a contentious matter since Russia completely cut off gas supplies to Ukraine a few months ago.
4) International Markets Overview
Major European markets are edging up in early trading.
Asian markets mostly ended with gains. The Shanghai Composite index led the pack with a 1.5% jump.
5) Tuesday Market Recap
US stocks closed higher at the close of the previous trading session. The Dow Jones industrial average gained 188 points, nearly erasing its October losses. The S&P 500 closed 1.2% higher and the Nasdaq was up 1.8%
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What is it? It checks the interest rate at which depository institutions lend balances held at the Federal Reserve to other depository institutions overnight.
Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.
Usual Effect If the number is higher than the forecast, you can expect the USD to rise.
When? October 29th at 2:00pm Eastern Time.
Trading Tip: This announcement can greatly affect the USD, make sure to make your trades before.
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What is it? The FOMC usually changes the statement slightly at each release. It's these changes that traders focus on.
It's the primary tool the FOMC uses to communicate with investors about monetary policy. It contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes. Most importantly, it discusses the economic outlook and offers clues on the outcome of future votes.
Usual Effect If the announcement will hint towards higher interest rates, you can expect the USD to rise.
When? October 29th at 2:00pm Eastern Time.
Trading Tip: This announcement can greatly affect the USD, make sure to make your trades before.
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What is it? It checks the change in the number of barrels of crude oil held in inventory by commercial firms during the past week.
It influences the price of petroleum products which affects inflation, but also impacts growth as many industries rely on oil to produce goods.
Usual Effect: If the number is higher than the forecast, you can expect the USD to rise.
When? October 29th at 10:30am Eastern Time.
Trading Tip: This announcement can greatly affect the USD, make sure to make your trades before.
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US stocks were mixed yesterday but with little change. Sentiment was hit by falling oil prices. Trade was also subdued as investors are awaiting the result of the two day FOMC meeting beginning today. It is widely expected that the Federal Reserve will finish their bond buying program this month. However, investors are mostly waiting to hear any clues regarding increasing interest rates sooner than currently expected.
Asian stocks were also mixed today as the Dollar traded lower against the Yen. Traders were also apprehensive before Central bank meetings from both currencies. The Bank of Japan will be meeting on Friday.
European markets are higher today following earnings reports.
Oil dropped to its support level at 80.00 once again but bounced straight off it, while gold continues to trade sideways ahead of the FOMC Statement. Any hawkish remarks would be bullish for the Dollar and negative for Gold. Traders should watch US data today as it could provide short term trading opportunities.
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