The week ahead has many a fundamental new 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:

  • Tuesday sees the Reserve Bank of Australia (RBA) releasing their Cash Rate and Rate Statement. 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.
  • Wednesday`s release of the FOMC meeting minutes will have markets on edge as they try and determine whether the rate lift off is a sure thing or not. The minutes will reveal the details of the decision makers most recent meeting, giving valuable insight to the factors which prevented them from voting an increase of rate in the last meeting. If these factors are regarded as having improved, markets will continue to buy the dollar. However, if they sight factors which might take time to resolve, we would see markets unwind their USD positions as the rate hike is priced out.
  • Friday sees the release of the US Non-Farm Employment Change (NFP), arguably, the most important figure out of the US for the month. The Federal Reserve Bank (FED), who make the monetary policy decisions for the USA, watch this figure very closely as it is regarded as an early indicator of health in the jobs markets, with better than expected data implying that employment is improving and that an improvement in the overall economy can be expected as the new jobs see increased spending and confidence by individuals. Worse than expected data has the opposite effect, depreciating the USD as markets price in a drop-in consumer spending and confidence.

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: