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:
1. Tuesday sees the release of the Building Permits figure out of the USA. The figure represents the annualized number of new residential building permits issued during the previous month which is expected to reach 1.255M. The figure is regarded as a gauge of future construction spending, which has far reaching consequences for the economy at large. A better than expected release is likely to result in a strengthening of the USD as the figure is taken to imply that an uptick in spending is on the horizon. Conversely, a worse than expected release will show a slowdown in building plans by consumers which will weaken the USD as traders’ price in a potential down tick in the economy.
2. With oil producing nations vowing to reduce the supply of crude oil in an attempt to prop up the price, Wednesdays US crude oil inventories will be watched by investors as they try and determine whether the US has reduced supply and/or whether the demand of crude oil has increased in the US. A release showing a lower number of crude in inventory will indicate that either the demand of crude oil has increase or that the supply has decreased, which would result in the price of crude oil increasing. However, a larger amount of crude in inventories will be read as either an increase in supply or a decrease in demand for the black gold which would result in a drop in the price of crude oil.
3. The UK Retail Sales figure is due to be released on Friday and is a measure of the change in the total value of retail sales in the UK economy. This figure is regarded as the earliest and broadest look at consumer spending, indicating whether consumers are spending more or less than the previous month. The figure is expected to show a decrease of 0.2%, significantly lower than the previous month, which saw the figure gain 1.4%. A better than expected print will likely see the GBP appreciate, as it implies that consumers are more confident in the economic outlook of the UK and their ability to make a living thus loosening their purse strings as they forgo savings to consume now. Conversely a worse than expected figure usually results in the GBP depreciating as fear of the future causes consumers to tighten their purse strings.
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/