The calendar that I check mentions Actual > Forecast means good for currency (For industrial production m/m news)
So if the French and Italian (EUR) production numbers were negative (bad for currency) then the EUR/NZD and EUR/GBP would go down, if I’m not mistaken?
Well the opposite happened, it went upwards… I’m confused about this so if somebody could please shed some light on this
Thanks
It isn’t always the way you put it. You would not want, for example, unemployment to be higher than forecasted.
Just know that green is positive, red is negative, black is neutral.
Those news events had a yellow folder next to them, which means they aren’t very significant anyway. Orange is bigger, red is highest.
And also know, that price will often still do whatever it wants regardless of the outcome. This is why I avoid news the best I can. Things like that happen way too often.
Next to where it says EUR you will see a yellow box, that means its of low importance, if your trading the news i wouldnt worry about low important events like those. Sometimes there is a movement opposite to what there reasonably should be ie go the other way to the news that just came out, but on the whole i would say the price will move with the result of the event most of the time.
It is not as straight forward as you mentioned. When it comes to trading it is almost never if this happens than that will be the outcome. As far as news are concerned it always depends on what the market has discounted already and what it expects. You would also need to look at the bigger picture and understand how a positive/negative surprise will impact the economy. Another thing to keep in mind is to read past the headline and dig into the report. Often you will notice price swings after a report is released.
And this right here is why I don’t trade news events, and I pray I’m not in a trade when a big one is coming. What has the “market discounted” and what does it “expect”? How are traders supposed to know any of this, at least at the level of what the institutions do?
They’re not, and they never will. I’ve yet to meet one news trader that’s above breakeven over their career. It’s a sucker’s game IMO.
Not even institutions know, it is an educated guess at best…almost a pure 50/50 bet which is why I have never traded the news nor will I start. You simply can’t know what the figure is until it will be released which explains the erratic price action after most reports.
The market was aware of the production numbers for Germany, sometimes referred to as the ‘powerhouse of Europe’ which were above expectation and already released this week.
The calendar maybe doesn’t show the two sections - only the month on month (m/m).
if arbit is about he’ll confirm that accountants usually compare current year with previous year, the market is looking for trends in the numbers, it wants to compare how one month fared against the same month in the previous year.
France is doing ok , the trend remains up - see this link.
Germany is doing even better with m/m up and also when comparing previous year.
“industrial Production” without “m/m” generally means the month reported vs the same month in previous year.
France Industrial Production | 1981-2015 | Data | Chart | Calendar
Another factor at play aside from what others have already said here is how traders think central banks may adjust their policies based on the economic data. In such a scenario, bad data maybe seen as a bullish sign by traders who feel it means the central bank will maintain an accommodative policy for longer in hopes of stimulating the economy.
That’s why in addition to paying attention to the economic data itself, it’s good to read in advance of the release what analysts think traders will do based on a good or bad number.
Yellow - not that significant and trading on the news, well, it takes a while to get it right…
I have a question if actual and forecast are the some what should I do buy or sell
Please i want tp Know…Whay happens when actual is equal to forecast
