News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Fed's Kashkari: - The Fed is in a decent financial position, therefore it is fine to talk about tapering monthly asset purchases - I am not seeing evidence of unanchored inflation expectations, but if that does occur then we would need to adjust
  • Fed's Kashkari: - The benefits of reducing MBS purchases first would be modest - It may take longer than September to judge progress on labor supply
  • Fed's Kashkari: - Fed funds rate should remain unchanged through 2023 - When it is time to taper, the best case scenario is to stick to the same plan as before
  • Fed's Kashkari: - Inflationary indicators have been higher than predicted, but this is expected to be temporary - Although the success against COVID is inspiring, it is still too early to declare victory
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.06% Silver: -0.11% Gold: -0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/jXEy4TGAZL
  • GBP/USD IG Client Sentiment: Our data shows traders are now at their most net-long GBP/USD since Apr 12 when GBP/USD traded near 1.37. A contrarian view of crowd sentiment points to GBP/USD weakness. https://www.dailyfx.com/sentiment https://t.co/oqggIco9Rb
  • USD/CAD breaks out of its multi-week trading range. Client sentiment data shows traders cutting back their long positions. Get your $USDCAD market update from @nickcawley1 here:https://t.co/0jaBKT1c1p https://t.co/tcRug98zDc
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Gold are long at 84.90%, while traders in France 40 are at opposite extremes with 70.47%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/VjYBuNfKGv
  • $XAUUSD - Big Spot here for #Gold . . . https://www.dailyfx.com/forex/technical/home/analysis/xau-usd/2021/06/10/Gold-Price-Outlook-Gold-Pops-on-Hot-Inflation--Bulls-Eyes-Resistance-GLD-Technical-Forecast-MBTS6.html https://t.co/BPcJ6OUiuM
  • RT @ZabelinDimitri: What are markets looking at next ahead now that we've got the Fed rate decision behind us? Take a look⬇️
Trader Preparation for US 1Q GDP and Other High Profile Event Risk

Trader Preparation for US 1Q GDP and Other High Profile Event Risk

John Kicklighter, Chief Strategist

Talking Points:

  • Just as surely as a critical piece of data or an event can generate strong volatility, anticipation can warp trading
  • The benchmark for an outcome and market position leading into a report can come from the economists, analysts or markets
  • There is a range of high profile event risk ahead, but we focus on US 1Q GDP to illustrate preparing for key events

Sign up for the live rate decisions and GDP releases coverage and see what other live coverage is scheduled to cover key event risk for the FX and capital markets on the DailyFX Webinar Calendar.

Whether you consider yourself a fundamental trader or not, there is little arguing that event risk - both scheduled and unscheduled - can lead to significant volatility or trend change in the market. Beyond the simple practice of putting new picture neatly into the puzzle of a financial landscape, effective traders measure the market's anticipation for events and themes well into the future. Further, they recognize when those assumption run too far afield and are at risk of a significant rebalance. Where do these assumptions come from? How do they influence price action and speculative appetite?

If a known event is important enough, there will be a consensus forecast attached to it. Sometimes, it will come through a distinctly quantitative and 'official' source. A good example is the US 1Q GDP reading that is due this coming Friday. There are plenty of aggregated forecasts such as from economists - which Bloomberg and Reuters provide. Then there are more recent favorites in the New York and Atlanta Fed projections (the latter of which has caused serious indigestion as it has collapsed to an anemic 0.5 percent). Further, we can use data as a proxy. The PMI figures from Markit are treated as proxies for the less frequent official numbers, but it is hard to come by the historical. For that, the ISM statistics show that these sector measures can offer remarkable signal on economic activity. It is worth noting that manufacturing is a favorite, but the US is primarily a service-based economy. Then there is the market's own assumptions.

Speculative anticipation is usually born of data, economist projections and other clues that are slowly released through the market. Yet, as freely available as all this tangible evidence is; the market's assessment doesn't always follow rational conclusions. Biases, different themes and speculative appetites can warp the assumptions the market has for critical event risk. That in turn can produce far greater skew in the results and subsequent reaction to the release. Perhaps more consistent is the influence that event risk has in the lead up to its release. The greater the perceived importance of the data or event, the more certain it is that the 'investment' oriented market participant moves to the sidelines to leverage the influence of the 'opportunist' trader that moves in and out before the news crosses the wires. We discuss the practicalities of event risk ahead of a heavy docket of GDP releases, rate decisions and a French election in this weekend Strategy Video.

Trader Preparation for US 1Q GDP and Other High Profile Event Risk

To receive John’s analysis directly via email, please SIGN UP HERE

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES