Today promises to be a volatility packed day, with plenty of trading opportunities abound, offering good reward to risk ratios for the patient trader.
The hottest data comes from the UK and Canada, with both of their respective banks stepping up to the plate as the UK delivers its Inflation Report Hearings and Canada releases the Overnight Rate and its Rate Statement.
The pound has enjoyed tremendous support of late and is bucking the Brexit fear train, making new multi-week highs across the board. Today’s Inflation report will have all eyes glued to their news source as we wait and see how the UK economy is truly faring in the post Brexit environment and more importantly after the BOE measures taken last month. Should the report be hawkish, showing that the UK economy is heating up, we would see further upside to the GBP as bulls look to retake some of their July losses. However, a more dovish tone will douse the flames of the recent rebellion, sending the GBP spiraling.
The Cad data will be watched with equal glee as traders look to the central bank for clues as to the current state of the economy and the banks future expectation of growth, inflation and employment. A more hawkish statement, will see the Cad strengthen across the board while a worse than expected report, showing a decline in any of the three factors, likely to lead to a sharp selloff of the CAD across the board.
Today’s key economic data is as follows:
- Halifax HPI m/m expected at -0.3%
- Manufacturing Production m/m expected at -0.4%
- MPC Member Cunliffe Speaks
- Inflation Report Hearings
- BOC Rate Statement
- Overnight Rate expected unchanged at 0.5%
- Ivey PMI expected at 55.5
- JOLTS Job Openings expected at 5.58m
- FOMC Member George Speaks
- RBA Deputy Gov Lowe Speaks
- Trade Balance expected at -2.65B
- Trade Balance expected at 372B
- Final GDP q/q expected at 0%
- Current Account expected at 1.59T