The week ahead has many a fundamental news release to look forward to, events which are sure to have traders licking their lips at the implied volatility and the numerous trading opportunities they create. Let us take a look at our top 3 picks:

  • First up is the Reserve Bank of Australia (RBA) releasing their Cash Rate and Rate Statement on Tuesday morning. The cash rate, which is the interest rate charged on overnight loans between financial companies, is forecasted to remain unchanged at 1.50% and has already been priced in, any surprises would impact the currency, with a rate hike leading to a stronger AUD while a rate cut would lead to a deprecation of the AUD. The rate statement will communicate the RBA`s views and concerns, with a more hawkish report expected to lift the AUD while a dovish tone will see the AUD depreciate.
  • Following Australia’s lead is New Zealand who will also be releasing their Rate Statement and Monetary Policy Statement on Wednesday, followed by a press conference by the head of the Reserve Bank of New Zealand. The Cash rate, is expected to remain unchanged at 1.75%, which has already been priced in. Any surprises will result in severe volatility with the NZ dollar strengthening in the case of a rate hike and vice versa in the case of a rate cut. Investors will be glued to the screen to try and decipher the Statement and press conference for clues as to the current and future views and actions of the RBNZ, with positive comments likely to see the NZD gain strength while negative comments will see the NZD sold off.
  • Friday’s Prelim UoM Consumer Sentiment release, expected at 97.9, will ensure that the action carries through to the end of the week as investors await the key release before their weekend positioning. The figure represents an index of surveyed consumers in which they are questioned on their financial confidence. The figure is regarded as a leading indicator in which an increase in consumer confidence is expected to filter throughout the rest of the economy as consumer spend more money, increasing demand for goods and services and subsequently heating up the economy through inflation and growth. A better than expected release will see the USD strengthen while a worse than expected release will see the USD weaken across the board.

The above are just the tip of the iceberg of the daily events which occur in markets, for daily technical and fundamental analysis please visit: https://www.opteck.com/fundamental-analysis/