0830 US GDP Annualized - Advanced (+2.5% exp, +2.3% prior,+2.0% to +2.9% range) majority:2.2-2.7
CAD Retail Sales - Core m/m (+0.4% expected, +0.4% prior, +0.1% to +0.6% range) majority:0.3-0.6
Affliated Reports:
CAD Retail Sales m/m (+0.5% expected, +0.5% prior, +0.2% to +0.8% range) 0.4-0.8 tighter
US Personal Consumption (+2.4% expected, +2.4% prior, +2.1% to +2.5% range)
US GDP Price Index (+2.5% exp, +2.5% prior, +2.0% to +2.6% range)
US Core PCE q/q (+2.1% expected, +2.1% prior, +2.1% to +2.4% range)
2 major reports at the same 8:30 time-slot today...unfortunate waste of news trading opportunities.
As far as the CAD Retail Sales, October's +0.1 reading on Core came with a +0.2 on headline (& +0.1
on previous month's revision) but the price of the USDCAD went sidewise for 15 minute until it
started to rally (CAD weakness) and thus not in agreement with the small deviation. September had a
-0.2 dev on Core with a +0.1 on the previous month's revision, headline -0.3 and revision +0.1, again
price went sidewise for 15 minutes but then actually went down with CAD strength. Not good responses
but these are small deviations, and the market has been very headline driven with alot of focus on
the crisis in Europe. In June a full -0.6 on Core and -0.1 on Headline really did not do much. In
May a -0.8 on Core & -0.9 on Headline produced a good 45 pip move over 6 minutes. The lack of reaction
in June is a concern, therefore a deviation of +/-0.8 is advised. Estimates are tighter this month, 0.5
between low and high estimate compared to +1.0 last time. However the GDP Data from the USA is due at
the same time which will affect USDCAD pair as well as other CAD crosses. This is the Preliminary or
2nd GDP release. Last month estimates were spot on, and this was still good news as these estimates
were high in comparison to the past 6 months or so. The market had rallied into the release on rumors
or perhaps even a leak of a good reading, and right after the release the market eased off or went
sidewise for nearly an hour leading into the opening of Wall Street. EURJPY lead the yen crosses higher
with the smallest pullbacks, followed by GBPJPY, CADJPY got had a more whippy time but did eventually
follow risk appetite higher. This one doesn't usually deviate much, back in July there was a -0.5 dev
according to Bloomberg (FPA has this as -0.3) but the previous month's revision was -1.5 and that is
quite alot!! The USDJPY sold off 50 pips over an hour, which is alot for this pair, with lots of minor
pullbacks to scalp 20-30 pips on the way down, CADJPY followed with just over 100 pips move in about
35 minutes, GBPJPY and EURJPY initially blipped down 20-30 pips but retraced and went sidewise, there
was some disconnect between european pairs and risk on/off sentiment as expressed by CADJPY which is
a commodity pair, USDJPY reflects the pure fundamentals but the pip moves aren't as large, but you can
always add lots, the EMIni S&P500 is also a good option to trade on this. The -0.4 in May also had a
nice move, 60 pips on USDJPY, 75 pips CADJPY both in 20 min. 84 pips EURJPY & 79 pips in GBPJPY over
30 mins. +/-0.4 should work therefore, some could tighten to +/-0.3 or be more conservative at +/-0.5
for GDP
If it comes out at +2.9% or higher, USD/JPY should rally 25-45 pips.
If it comes out at +2.1% or lower, USD/JPY should fall 25-45 pips.
for CAD RS
If Core is +1.2% or higher, and Headline also deviates higher, USD/CAD should drop 30-50 pips.
If Core is -0.4% or lower, and Headline also deviates lower, USD/CAD should rally 30-50 pips.
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