Newsletter 18/10/2007

ASIAN SESSION

A) CALENDAR

-GMT 00:45 USA Hoenig Speaks on Economy at Business Forum in Oklahoma

B) SUPPORT-RESISTANCE
EURO/USD USD/JPY GBP/USD
R3 1.4280 117.20 2.0475
R2 1.4255 116.90 2.0450
R1 1.4240 116.65 2.0415
S1 1.4195 116.40 2.0370
S2 1.4180 116.15 2.0340
S3 1.4165 115.90 2.0320

C) WATCH
-Interest Rates

D) TRADING TIPS
The importance of trading in the direction of the major trend cannot be overstated. The danger in placing too much importance on oscillators by themselves is the temptation to use divergence as an excuse to initiate trades contrary to the general trend. This action generally proves a costly and painful exercise. The oscillator, as useful as it is, is just one tool among many others and must always be used as an aid, not substitute, for basic trend analysis.

EUROPEAN SESSION

A) CALENDAR

-GMT 08:30 UK Retail sales (m/m), (Sep) EST 0.1% PREVIOUS 0.6%
-GMT 08:30 UK Retail sales (y/y), (Sep) EST 5.5% PREVIOUS 4.9%
Definition
The retail sales report is a measure of the total receipts of retail stores from samples representing all sizes and kinds of business in retail trade throughout the nation. It is the most timely indicator of broad consumer spending patterns and is adjusted for normal seasonal variation, holidays, and trading-day differences. Retail sales include durable and nondurable merchandise sold, and services and excise taxes incidental to the sale of merchandise. Excluded are sales taxes collected directly from the customer. It also excludes spending for services, a large component of consumer expenditures. Retail sales is a the first picture of consumer spending for a given month. Retail sales are often viewed ex-autos, as auto sales can move sharply from month-to-month. Also, gas and food component changes are often a result of price changes rather than shifting consumer demand. Retail sales can be quite volatile and the advance reports are subject to large revisions.

-GMT 09:00 EU Trade balance (Aug) EST B PREVIOUS 4.6B
Definition
Balance of trade figures are the sum of the money gained by a given economy by selling exports, minus the cost of buying imports. They form part of the balance of payments, which also includes other transactions such as international investment.
The figures are usually split into visible and invisible balance figures. The visible balance represents the physical goods, and invisible represents other forms of trade, e.g. the service economy.
A positive balance of trade is known as a trade surplus and consists of exporting more (in financial capital terms) than one imports. A negative balance of trade is known as a trade deficit and consists of importing more than one exports. Neither is necessarily dangerous in modern economies, although large trade surpluses or trade deficits may sometimes be a sign of other economic problems.
If the balance of trade is positive, then the economy has received more money than it has spent. This may appear to be a good thing but may not always be so.

B) SUPPORT-RESISTANCE
EURO/USD USD/JPY GBP/USD
R3 1.4280 117.20 2.0490
R2 1.4260 116.90 2.0475
R1 1.4240 116.65 2.0450
S1 1.4195 116.40 2.0370
S2 1.4180 116.15 2.0340
S3 1.4165 115.90 2.0320

C) WATCH
-Interest Rates
-GMT 08:30 UK Retail sales
-GMT 09:00 EU Trade balance

D) TRADING TIPS
The importance of trading in the direction of the major trend cannot be overstated. The danger in placing too much importance on oscillators by themselves is the temptation to use divergence as an excuse to initiate trades contrary to the general trend. This action generally proves a costly and painful exercise. The oscillator, as useful as it is, is just one tool among many others and must always be used as an aid, not substitute, for basic trend analysis.

US SESSION

A) CALENDAR

-GMT 12:30 USA Initial Claims EST 312k PREVIOUS 308k
Definition
New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility.

-GMT 14:00 USA Leading Indicators (m/m), (Sep) EST 0.3% PREVIOUS -0.6%
Definition
The Index of Leading Indicators consist of the following economic indicators

  • Average workweek of production workers in manufacturing.
  • Average weekly claims for state unemployment.
  • New orders for consumer goods and materials
  • Vendor performance (companies receiving slower deliveries from suppliers)
  • Contracts and orders for plant and equipment
  • New building permits issued
  • Change in manufacturers� unfilled orders, durable goods
  • Change in sensitive materials prices
  • Index of stock prices
  • Money supply
  • Index of consumer expectations
    This index is designed to offer a 6 to 9 month future outlook of economic perfomance.

-GMT 16:00 USA Philly Fed Survey (Oct) EST 7.0 PREVIOUS 10.9
Definition
A composite diffusion index of manufacturing conditions within the Philadelphia Federal Reserve district. This survey is widely followed as an indicator of manufacturing sector trends since it is correlated with the NAPM survey and the index of industrial production.

-GMT 21:00 EU ECB’s Trichet Speaking in Washington

B) SUPPORT-RESISTANCE
EURO/USD USD/JPY GBP/USD
R3 1.4310 116.85 2.0540
R2 1.4280 116.65 2.0490
R1 1.4260 116.40 2.0475
S1 1.4240 115.90 2.0410
S2 1.4225 116.65 2.0385
S3 1.4195 115.40 2.0365

C) WATCH
-Interest Rates
-GMT 16:00 USA Philly Fed Survey
-GMT 21:00 EU ECB’s Trichet Speaking in Washington

D) TRADING TIPS
The importance of trading in the direction of the major trend cannot be overstated. The danger in placing too much importance on oscillators by themselves is the temptation to use divergence as an excuse to initiate trades contrary to the general trend. This action generally proves a costly and painful exercise. The oscillator, as useful as it is, is just one tool among many others and must always be used as an aid, not substitute, for basic trend analysis.