Profit Mongers @ 2:57 AM, Tuesday February 01 2011
04:28 GBP Manufacturing PMI (58.0 expected, 58.3 expected, 55.5 to 58.8 range)
This number has been coming out strong for the UK during 2010. In fact going into last week's bad GDP reading, it was the only leading PMI indicator which was positive. So if this indicator starts to turn negative it could be a another bad signal for the UK economy. The GDP indicated the Q4 contraction was due to construction and services sectors. On January 4th a +1.1 deviation caused the GBPUSD to spike 45 pips in a few minutes then continue a further 35 pips, this was during the low liquidity christmas period. The December release was +3.3 and also move 45 pips in the 1st few minutes, and continued to grind up another 40 over the next half hour. A +1.9 in November caused a +35-40 pip spike but did not continue for further gains. So recently at least GBPUSD has reacted well to this number, you have to go back to February to see a +2.8 which did not work so well and there was a move into the news on this release suggesting a leak.
If it comes out higher than expected by 2.0 or more, GBP/USD should rally 30-50 pips.
If it comes out lower than expected by 2.0 or more, GBP/USD should drop 30-50 pips.
0830 US ISM Manufacturing Index (58 expected, 57 prior, 56.0 to 59.5 range)
This news release provides a leading indicator of the state of the economy, look for a devition of about 2.5 for a trade. The past 2 months have not had much of a deviation but there was still a move. A +2.9 deviation in november caused a 20 pip initial spike on usdjpy and then pulled back 38-50% after 5 minute to continue for another 40 pips of gain over the next 1.5 hours. A +3.5 deviation in September caused a 40 pip move in 3 minutes.
if 60.5 or higher then buy USDJPY for a potential 30 pip move
if 55.5 or lower then sell USDJPY for a potential 30 pip move
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