The heavyweights of the week – Part 1

Posted Monday, September 19, 2016 by
Skerdian Meta • 2 min read

The economic calendar this week is filled with economic events, but some of them are more important than the others. In fact, there are several economic data releases and economic events which might churn the market´s insides and turn things upside down in a blink of an eye. Spotting and interpreting the economic events which are potentially market moving is part of the process of growing as a trader. That´s why we explain such crucial events, so you can build your trading toolbox and develop your trading further. Here are the two heavyweights of the week: 

Inflation and retail sales from Canada – The wholesale sales are up on Wednesday, but the CPI (consumer inflation) and the retail sales will steal the attention. With oil prices failing to hold above $50/barrel, the BOC (Bank of Canada) has revised the economic outlook a few points down. 

If the inflation or the retail sales beat the expectations, we might see a jump in the CAD but it will likely be short-lived. So I will look for a "faint trade" trying to open a long-term sell forex signal (buy USD/CAD) when the jump starts to fade, probably a couple of days later. 

On the other hand, if the numbers miss the expectations, then the poor Loonie will be doomed. A negative reading will increase the odds of an interest rate cut from the BOC and obviously the dovish rhetoric. This will be the ignition which will make USD/CAD resume it´s long term uptrend, if we leave the FED totally out of the picture. 

Meeting minutes from the RBA – The RBA (Royal Bank of Australia) held their meeting at the beginning of September. They left the interest rates unchanged and the comments from a couple of RBA members have been mixed. But, we haven´t heard the argument/conversation which took place that day so we don´t know where the other members stand. 

The odds of a rate hike by the end of the year right now stand at 1/3rd or 33%. The RBA meeting minutes will give us more food to chew on and will either increase or decrease the rate hike odds, which will affect the AUD. In my opinion, the minutes will lean more on the dovish side. You know what that means for the AUD, right?  

These are the first two heavyweights of the week. In a short while we will post another update with the other three heavyweights which are even more important than these two, so hang around.  

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