Talking Points:
• The top fundamental theme for 2016 so far has been 'risk trends', not relative monetary policy
• Key event risk ahead includes the FOMC and RBNZ rate decisions, US and UK GDP
• While the S&P 500 acts as an easier (more defined) sentiment gauge, correlations are the more important factor
See the DailyFX Analysts' 1Q forecasts for the Dollar, Euro, Pound, Equities and Gold as well as our favorite 2016 trading opportunities in the DailyFX Trading Guides page.
Chief Strategist John Kicklighter discusses the top Forex fundamental themes for the coming week of trading. There is convenience in the release of key event risk - and we have quite a bit of it this week. However, beyond a concentrated burst of volatility, the event or data quickly absorbs into the market and its influence typically peters out. Where the true market activity arises is from the changing of underlying themes. That puts our week at odds. We have on the one hand key rate decisions (FOMC, BoJ, RBNZ, Russia and South Africa) and GDP figures (US, UK, France); but the true drive for the markets in 2016 has been found through the less concise 'risk trend' theme. We separate fundamental spark from true price engine in this week's fundamental webinar.
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