Henry Liu
Former FPA Special Consultant
- Messages
- 473
We’ll be getting the Core Retail Sales (and Retail Sales) figure out of U.S. today, as high impact news releases are concerned, Retail Sales makes up about 2/3 of U.S. GDP (economy)… Here’s the forecast:
8:30am (NY Time) US Core Retail Sales Forecast 0.7% Previous 1.2%
ACTION: 1.2% BUY USDJPY / 0.1% BUY EURUSD
The Trade Plan
The plan to trade this release is straight forward. We are going to wait for 1.2% of release or better to BUY USDJPY, or a 0.1% or worse to BUY EURUSD… If we get a in-between release, we’ll need to look at the pre-release market condition in order to make a decision, or just stay out of the market altogether.
We will trade this news release using after news retracement method, I will pay attention to both headline and core Retail Sales figures, but my focus will be on the Core figure. It is also important to mention that the Core CPI will be released at the same time, but since Core CPI out of U.S. has not been a very market moving report, we should focus more on the Retail Sales.
For more information on my trading method:
Henry's News Trading Methods.
The Market
The medium forecast surveyed by Bloomberg stated that the Core figure is at 0.7% of gain while the headline figure is expected to be around 0.8%, as the median of 58 analysis obtained by Bloomberg.
With pre-Christmas sales reaching around 5.5% versus only 4.1% last year, according to MasterCard Advisors, today's release could surprise to the upside... However, consumer spending was disrupted by the heavy blizzard the day after Christmas, showing only 2.4% versus an average of 5.4%, according to Retail Metrics Inc., we will probably see the Retail Sales number coming out just as expected.
With general advances in the Equity market, the rise in consumer confidence, which would all support a better than expected release, combined with the optimism of extending Bush Tax cuts, I believe ultimately we should see a better than expected Retail Sales figure.
Additional Thoughts
Since both releases (CPI and Retail Sales) are scheduled together, if we get a conflict in the releases, we should stay out regardless whether or not we get our tradable deviation...
Pre-news Consideration
There should be no pre-news trading, but if I were to take a trade pre-news, I would be looking to BUY USD, maybe against AUD, CHF or JPY, as those pairs may offer more room... I'd stay away from EUR and GBP though.
DEFINITION:
“(Retail Sales Core) Derivative of Retail Sales that excludes the Automobile Sales component. Automobile Sales make up roughly 25% of Retail Sales, but they can be very volatile from month to month and can distort the picture. Retail Sales with the exclusion of this volatile component is thought to be a better indicator of the underlying trend in consumer spending.”
Historical Data and Chart For US Core Retail Sales
Thanks,
8:30am (NY Time) US Core Retail Sales Forecast 0.7% Previous 1.2%
ACTION: 1.2% BUY USDJPY / 0.1% BUY EURUSD
The Trade Plan
The plan to trade this release is straight forward. We are going to wait for 1.2% of release or better to BUY USDJPY, or a 0.1% or worse to BUY EURUSD… If we get a in-between release, we’ll need to look at the pre-release market condition in order to make a decision, or just stay out of the market altogether.
We will trade this news release using after news retracement method, I will pay attention to both headline and core Retail Sales figures, but my focus will be on the Core figure. It is also important to mention that the Core CPI will be released at the same time, but since Core CPI out of U.S. has not been a very market moving report, we should focus more on the Retail Sales.
For more information on my trading method:
Henry's News Trading Methods.
The Market
The medium forecast surveyed by Bloomberg stated that the Core figure is at 0.7% of gain while the headline figure is expected to be around 0.8%, as the median of 58 analysis obtained by Bloomberg.
With pre-Christmas sales reaching around 5.5% versus only 4.1% last year, according to MasterCard Advisors, today's release could surprise to the upside... However, consumer spending was disrupted by the heavy blizzard the day after Christmas, showing only 2.4% versus an average of 5.4%, according to Retail Metrics Inc., we will probably see the Retail Sales number coming out just as expected.
With general advances in the Equity market, the rise in consumer confidence, which would all support a better than expected release, combined with the optimism of extending Bush Tax cuts, I believe ultimately we should see a better than expected Retail Sales figure.
Additional Thoughts
Since both releases (CPI and Retail Sales) are scheduled together, if we get a conflict in the releases, we should stay out regardless whether or not we get our tradable deviation...
Pre-news Consideration
There should be no pre-news trading, but if I were to take a trade pre-news, I would be looking to BUY USD, maybe against AUD, CHF or JPY, as those pairs may offer more room... I'd stay away from EUR and GBP though.
DEFINITION:
“(Retail Sales Core) Derivative of Retail Sales that excludes the Automobile Sales component. Automobile Sales make up roughly 25% of Retail Sales, but they can be very volatile from month to month and can distort the picture. Retail Sales with the exclusion of this volatile component is thought to be a better indicator of the underlying trend in consumer spending.”
Historical Data and Chart For US Core Retail Sales
Thanks,
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