[B]Trading Tip[/B] – Recent market volatility has not made for a fertile range trading environment, with this week’s price action being particularly erratic around the ISM and NFP releases out of the US. Time has shown that a de-coupling from US slowdown is unlikely, so this data holds implications for the market as a whole. Today’s ISM printed at 48.6, slightly better than expected but still below the boom/bust 50 level. This was hardly a strong rebound, and yet the USD pushed higher for a much-needed relief rally to ease oversold pressure. Similar spikes are difficult to predict, and can cause trouble in an otherwise clear range-bound scenario. With that in mind, we will keep our stop-loss tight to limit exposure ahead of Friday’s NFP. Conservative traders may opt to halve their position size to further reduce risk. As an added precaution, we will cancel any unfilled orders before Friday’s London session (2am ET) or if spot hits 0.9150 prior to execution.
[B]Event Risk for Australia and Switzerland[/B]
[B]Australia[/B] – With the RBA rate decision passing with little fanfare, event risk has significantly diminished for Australia. Thursday brings February’s Retail Sales data. Leading indicators suggest a lackluster outcome, with Motor Vehicle Sales declining -2.3% and Consumer Confidence down -9.1%. While employment figures have been strong, this does not seem to be translating into spending as higher interest rates promote saving. January’s result printed flat at 0% growth, with 0.3% expected this time around.
[B]Switzerland[/B] – Friday brings March Consumer Price Index figures. CPI held at a 14-year high last month as buoyant commodity prices created a knock-on effect on the overall price level. The SNB has acted in line with their counterparts at the ECB, keeping rates on hold in the face of mounting concerns about the global financial system. As re-coupling brings European growth down along with the US, inflation is expected to subside and interest rates to remain on hold. In any case, the SNB is not set to meet again until June, meaning the immediate implications of this week’s CPI are limited.
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