0430 UK CPI y/y headline (4.0% expected, 3.7% prior, 3.8% to 5.0% range)
Affiliated reports:
-Headline CPI m/m (0.1% expected, 1.0% prior, -0.1% to 1.0% range)
-Core CPI y/y (3.1% expected, 2.9% prior, 2.8% to 3.8% range)
-UK RPI y/y (5.1% expected, 4.8% prior, 4.7% to 5.5% range)
-UK RPI m/m (0.2% expected, 0.7% prior, -0.1% to 0.6% range)
-UK Core RPI y/y (5.0% expected, 4.7% prior, 4.6% to 5.4% range)
After last months big positive deviation of +3.7 which was +0.3 deviation above the +3.4 expected, this month the median
expectations have been raised as high as +4.0, with some as high as +5.0. This is double the Banks Target Rates,
and in the last BOE minute's Weale has joined Sentance to call for rate hikes. Lots are asking questions about whether
the bank can continue to sit on the sidelines and their credibility is at stake increasingly. Last month the Pound
rallied 90 pips on the higher Inflation data, with expectations so high to get a positive deviation above the +4.0
expected will be quite a jump and really signal quite a distressing situation. With better PMI figures signalling
improved GDP perhaps the BOE will see a clear road ahead dispite the government cuts coming. Some of the inflation is
from higher sales tax and the rise in commodities. A +0.3 deviation will bring inflation back down to the expected
figures for the previous release and this should be a good sign, although inflation is still high any easing will be take
stress off the BOE to hike in the near term.
If it comes out at 4.3% or higher, GBP/USD should rally 40-70 pips
If it comes out at 3.7% or lower, GBP/USD should fall 40-70 pips
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0500 German ZEW Economic Sentiment (20.0 expected, 15.4 previous, 10.0 to 25.4.0 range)
Affliated Reports:
-ZEW Curent Situation Index (83.0 expected, 82.8 previous, 82.0 to 85.7 range)
-EUR Economic Sentiment (28.5 expected, 25.4 previous, 18.0 to 31.0 range)
-EUR GDP q/q (0.4% expected, 0.3% previous, 0.3% to 0.6% range)
-EUR GDP y/y (2.1% expected, 1.9% previous, 2.0% to 2.3% range)
This release has a tendancy to have a short quick blip down of about 20-30 pips depending on the deviation, so it is not
the best indicator to spike trade. We used to use triggers of +/-10 but this one has changed over the past year.
Triggers of +/-15 should be reliable enough for a spike trade. However what usually happens is after the initial blip
down in the first minute it will retrace, if the deviation is large enough it will roll over after a good fib retracement
and continue down for a nice afterspike. For smaller deviations there can still be a blip down but then it will reverse
back up to pre-release and and sometimes continue in the opposite direction to the spike. This month this indicator
comes out with GDP figures for the Euro Zone, this could add some additional support if it agrees with the deviation with
the German figures and everything lines up, however it could also deviate so probably best not to spike trade this unless
your broker normally gives fills very close to pre-release and you can take profit quickly.
If it comes out at +35 of higher, EUR/USD should rally 30 pips
If it comes out at +5 of lower, EUR/USD should fall 30 pips
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0830 US Retail Sales Ex-Autos m/m (0.6% expected, 0.5% previous, -1.0% to 1.2% range)
Affliated Reports:
US Advance Retail Sales m/m (0.5% expected, 0.6% previous, -0.5% to 1.1% range)
This figures often gets released with other data, especially inflation figures, so fine-tuning the best deviation is more challenging without more recent evidence. In the past deviations of +/-0.5 have worked, however back in december this figure came out with a +0.6 deviation and the PPI numbers which were released at the same time were also high and thus supported the deviation on Retail Sales. The reaction was quite muted and there was only a 15-20 pip spike, there was some move in the few minutes before the release, suggesting some sort of leak. The price then came back down below pre-release but moved much higher as the US stock market opened and digested the data...this can happen. So best to use a safer trigger for the spike trade, if the deviation is less but still quite high, keep an eye on usdjpy as the US markets open and look for a retracement swing entry. The Emini S&P500 can also be traded on this release.
If Core RS comes out at +1.3% or higher, USD/JPY should rally 30-40 pips. ES should rally 5-10 points.
If Core RS comes out at -0.1% or lower, USD/JPY should drop 30-40 pips. ES should drop 5-10 points.
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