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WHY GBP GREW BY 100 POINTS AT A CONSTANT INTEREST RATE
Most likely, the increase of the pound has been the most amazing activity this week, with constant parameters of a quantitative anticipation on the part of analysts: the interest rate was not changed. But, not everything went as predicted: the Bank of England set about preparing the ground for additional interest rate increase. Not by pound independently, EURNOK may also contend with surprises of the week.
BANK OF ENGLAND: AN EARLIER RATE INCREASE MAY BE REQUIRED
Attentive and accountable traders noticed that the Bank of England not just held its assembly, but also presented a inflation report, which attracted additional volatility to the market.
The increase of the pound was not regarding the interest rate decision, nor was it related to the voting arrangement of MPC members, and nor was it related to this decision about the Asset Purchase Facility program.
All that you have noticed (that the growth of a pair) is that the end result of changing the Bank of England's wording of the text minutes, accompanying the decision. The regulator recognizes in it that it's possible to increase interest rates earlier this season. Earlier in the surveys, we wrote that the Bank had been pressing the inflation rate, despite the tense political situation, as well as Brexit-uncertainty, the Bank could opt for a quicker interest rate increase than previously anticipated.
NORWAY: DEEPER INFLATION
at the Beginning of Friday, we had been deeply surprised by the publiion of the consumer price index from Norway.
Truth (deviation) prediction
NO CPI [m/m] -0.1% (-0.1%) 0 percent
NO Core Inflation [y/y] 1.1 percent (-0.4%) 1.5 percent
NO Core Inflation [m/m] -0.8% (-0.6 percent) -0.2 percent
It seems that inflation in the area is affected... This may be an implicit sign that the European Central Bank may postpone its plans to curtail that the incentive program.
The pair handed around 90 points, which, regardless of the spread from the exotic pair, supplied us with an intriguing trading signal.
NEW ZEALAND'S LABOR MARKET SITUATION IS IMPROVING
the Amount of employed people in New Zealand continues to grow, which maynot but indie the forthcoming reaction of the RBNZ towards tightening a monetary policy.
NZ Employment Change 0.5 percent (0.3%) 0.2 percent
NZ Unemployment Rate 4.5% (-0.1%) 4.6 percent
NZ Participation Rate 71 percent (0.2%) 70.8 percent
But, the Bank of New Zealand not just rendered the interest rate unchanged, but it turned out to be somewhat soft in its own statements (not fulfilling investors' expectations).
NZ RBNZ Interest Rate 1.75% 1.75 percent
in line with the regulator's opinion, the main reason behind this is a weak inflation rate.
The leadership of this neighboring Reserve Bank of Australia falls asleep with the very same ideas: that the RBA's Board does not find any sensible grounds for changing the monetary policy in the short term. To attain the RBA's target inflation range of 2% -3%, it is necessary to reestablish the increase rate of salary from the current 20-year low
BANK OF CANADA SEEMS TO stay IN NEUTRALITY
The printed labor market data can severely outnumber the Bank of Canada's agents because the increase in the employed for the prior month turned out to be negative, and unemployment added 0.1 percent
CA Net Change in Employment -88 (-98) 10
CA Unemployment Rate 5.9 percent (0.1%) 5.8 percent
And it was not without a stunt from the market: the Canadian irrevocably rolled back out of the first reaction ...
REMARKS
Fed's Dudley (FRS, USA): three interest rate increases will be adequate this year, however if the economic element is enhanced, the issue of four raises can easily be considered
Fed's George (FRS, USA): 3 Fed's rate increases will likely probably be adequate
Fed's Evans: there's no need to raise the interest rate before mid-2018
Fed's Kaplan: concerns that wage increase will have little impact on inflation increase
IMPORTANT TRADING EVENTS OF THE UPCOMING WEEK
Tuesday / UK CPI
If inflation continues to rise, the Bank of England will raise interest rates almost instantly.
Wednesday / US CPI - Core / US Retail Sales [m/m]
Unfortunately, these indiors are printed in the exact same time, we will use the conflict avoie system. The focus is on the CPI since the Fed is in the midst of thinking about between 3 and 4 rate increases this season.
Friday / UK Retail Sales
If the Bank of England is going to increase interest rates, it might be nice to see that the increase of the indior, which may cause extra interest in the volatility of this market.
Anyone interested in making a trade, well ahead of the news spike, after the arrows as from the pics below?
Feb 02 Friday USA NFP
Feb 07, Wedneday NZD RBNZ Rate Statement
Feb 07, Wednesday GBP BOE Inflation Report
Feb 08, Friday CAD Employment Change
This can be a bi-product discovered unexpectedly after configuring the BB scalping method.
Post your commerce charts traded together with the arrows.
Enjoy
RS
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