The large world economies such as the Eurozone, US, UK, Japan and China are going through a transitionary period. There are many uncertainties during such periods and the most notable thing becomes the contradiction in the economic data. One piece of economic data points up, another piece of data signals an economic disaster; the same indicator points down one week, the next it flips on the other side, showing that the economy is flourishing.
This has been the case for many years now. Right now the foreign investments in machinery China and Japan are picking up and so is the industrial production, but the inflation is weak, particularly in Japan which is already in deflation. The consumer spending is also suffering in these countries.
In the US, the labour market, housing sector, the consumer spending and the consumer sentiment numbers have shown been thriving, but the wages are picking up very slowly and the manufacturing sector is not in its best days.
Of course the UK. What can we say about it, since the Brexit vote the economic data has oscillated up and down like it is on steroids. the consumer side of the economy is holding up pretty strong, while the economic data of the business side points to armageddon.
That has been the case with the EU as well. The economic data this morning perfectly shows that. Last month the German retail sales posted a 0.6% decline, this month they jumped by 1.7%. The French inflation last month was -0.4%, the data released this morning showed that this month it jumped by 0.3%. In such times, we forex traders have to look at it from all angles before we open a forex trade. There are too many Xs and Ys in this equation which we have to consider, so be extra cautious guys.
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