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. The summit at Jackson Hole attended by key central bank governors from around the world is still underway. We may see volatility later on as the Fed’s Yellen and ECB’s Draghi are due to speak.
Event: Manufacturing PMI & Services PMI
Date: Wednesday 23 August 2017 at 08:00 GMT
Markets affected: EUR/USD, EUR/GBP
Trending hashtags: #eur, #pmi
The Eurozone’s Manufacturing Purchasing Managers Index (PMI) continued on its positive path in August as it came in 57.4, over the expectations of 56.3 and the previous month’s reading of 56.6. This shows robustness in the manufacturing sector which is a key indicator to GDP and overall health of the economy. The Services PMI came in at 54.9, slightly under the expected 55.4 but the Composite index that combines both sectors showed an above expected result at 55.8 versus the forecast 55.5. These figures, combined with a strong report from the flash manufacturing PMI in Germany which hit a confident 59.4, boosted the EUR/USD as it approached a technically important level of 1.1800.
Event: EU Consumer Confidence
Date: Wednesday 23 August 2017 at 14:00 GMT
Markets affected: EUR/USD, EUR/GBP
Trending hashtags: #eur
At -1.5, Consumer Confidence in the Eurozone is still in negative according to preliminary figures but it came in slightly better than forecasts of -1.8 and the previous month’s -1.7. The release did little to hinder a rising euro against the US dollar but that probably had more do with comments by Trump that he would “close down the government to build the Mexico wall”.
Event: New Zealand Trade Balance
Date: Wednesday 23 August 2017 at 22:45 GMT
Markets affected: NZD/USD, AUD/NZD
Trending hashtags: #nzd, #trade
The NZD approached important support of 0.7200 against the USD and gained against most of its trading partners on release of July’s trade balance data. The trade surplus came in at NZD 85 million against the expected deficit of 200 million. This was the first surplus to be seen in July for five years and only the 11th one since 1960. The nation’s key dairy exports leaped 51% to 1.27 billion and exports saw an overall 17% rise on an annualised basis. Imports also rose 5.4% thanks to automobile imports.
Event: UK Gross Domestic Product (Q2)
Date: Thursday 24 August 2017 at 08:30 GMT
Markets affected: GBP/USD, EUR/GBP
Trending hashtags: #gbp, #gdp
Disappointing GDP data showed the UK economy grew only 0.3% for the second quarter of this year. It’s the slowest economy amongst the G7 countries with retail sales coming in at their lowest for more than a year. Both exports and consumer spending lacked any lustre as a weaker pound is not encouraging the first as much as it’s discouraging the second. It’s been a year since the nation voted on Brexit and household spending has taken a massive dive thanks to a low pound while the advantages of a lower currency on exports hasn’t been significant with net trade not seeing any change over the last quarter.
Trade of the Week
Time in: Wednesday 23 August 2017 at 22:40 GMT
Market : NZD/USD
Investment: $500 with 200:1 leverage
Time out: Wednesday 23 August 2017 at 22:45 GMT
If you had sold the NZD/USD with a $500 margin at the price of 0.72264 and closed the deal a few minutes later which saw the NZD gain 0.08%, you might have made a decent $84 profit. Note this example does not take into account spread.
Source:: Friday Lookback 25-08-2017