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:
Wednesday sees the first major release out of the Euro zone since last week’s ECB meeting. The release comes in the form of the German Ifo Business Climate Index, expected at 111.2. The figure is a leading indicator of economic health as it is based on a survey of manufacturers, builders, wholesalers and retailers who all have their finger of the pulse of the economy which means they react quickly to market conditions, changing their views accordingly. A better than expected release will imply an improvement in the economic climate of the EU`s biggest player which would see the EUR gain across the board. However, a worse than expected print will see the EUR tumble as a souring of German expectations will be related to a souring of EU economic conditions at large.
Thursday sees the release of the UK Prelim GDP q/q, expected at 0.5%. the figure measures the change in the inflation-adjusted value of all goods and service produce by the UK economy and is released quarterly. It is the first of three versions of the GDP and given this fact is the most likely to have an impact as it serves as a first view of the health of the UK economy. A better than expected figure will imply better growth and thus result in a strengthening of the GBP while a worse than expected figure will see the GBP weaken as markets price in stagnant economic conditions.
Friday sees the release of the US Core Durable Goods Orders m/m, expected at 0.4%. The figure represents the change in the value of new purchase orders placed with manufacturers for durable goods, excluding transportation items and is regarded as a leading indicator of production in the US. Rising purchasing orders imply that manufacturers will increase activity as they work to fill orders and thus a better than expected print will see the USD strengthen while a worse than expected print will see the USD sold off in anticipation of slow growth in the sector and potential the economy at large.
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: http://www.opteck.com/fundamental/