Henry Liu
Former FPA Special Consultant
- Messages
- 473
Revised GDP q/q, or better known as the 2nd quarterly GDP release, is going to be the focus for today. Here is the forecast:
4:30am (NY Time) UK Revised GDP q/q Forecast 0.5% Previous 0.5%
ACTION: GBP/USD BUY 0.8% SELL 0.2%
The Trade Plan
Since this is the second release of the 4th quarter GDP, we’re not likely to get a huge surprise as most 2nd releases are pretty much inline. However, judging from the expected release of 0.5% and previous release of 0.5% (Prelim GDP), we may not get a surprise release after all.
However, we’ll still be looking to trade the release using our after news retracement method. Our surprise factor is 0.3% as we’ll look to possibly SELL GBP/USD at 0.2% or worse, and BUY GBP/USD at 0.8% or better, as I believe the only reason that would justify a short-term LONG on Sterling is definitely a flat or positive figure.
Historically, if there is a 80% of chance that our S. Factor hits, the market will move up to 50~70 pips within the hour as GDP is a very high impact report.
For more information on my news trading methods:
Henry Liu's Trading Method
The Market
The revised UK GDP report will most likely reflect the preliminary GDP expectation of 0.5%. The BOE stated that high energy prices and the VAT tax hike are the primary causes of the 4.5% inflation mark, and not a result of economic turmoil. Consumers are struggling at home to pay for basic needs such as food and gas due to the high cost of living. The MPC voted 3-0-6 to keep interest rates on hold as the economy shows no clear signs of future direction. Market uncertainty is leaving policy makers in a state of confusion. Therefore, rate hike expectations for the end of the year have diminished although the likelihood of it happening are still very possible.
Additional Thoughts
A strong release could create bullish sentiment for the Sterling for the rest of the week since this is a high impact release. If the deviations are met, look to BUY the GBP/USD around the 1.6100 mark and SELL GBP/USD at the 1.6300 mark.
Pre-news Consideration
There is no pre-news consideration for this release today.
Definition
Revised GDP q/q from UK, is defined as “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.” GDP is the basically direct measurement of the economy, and a stronger GDP means that the central bank will more likely raise interest rate as better economy usually brings higher inflationary pressure…
Historical Chart and Data for UK Revised GDP q/q
Thanks,
4:30am (NY Time) UK Revised GDP q/q Forecast 0.5% Previous 0.5%
ACTION: GBP/USD BUY 0.8% SELL 0.2%
The Trade Plan
Since this is the second release of the 4th quarter GDP, we’re not likely to get a huge surprise as most 2nd releases are pretty much inline. However, judging from the expected release of 0.5% and previous release of 0.5% (Prelim GDP), we may not get a surprise release after all.
However, we’ll still be looking to trade the release using our after news retracement method. Our surprise factor is 0.3% as we’ll look to possibly SELL GBP/USD at 0.2% or worse, and BUY GBP/USD at 0.8% or better, as I believe the only reason that would justify a short-term LONG on Sterling is definitely a flat or positive figure.
Historically, if there is a 80% of chance that our S. Factor hits, the market will move up to 50~70 pips within the hour as GDP is a very high impact report.
For more information on my news trading methods:
Henry Liu's Trading Method
The Market
The revised UK GDP report will most likely reflect the preliminary GDP expectation of 0.5%. The BOE stated that high energy prices and the VAT tax hike are the primary causes of the 4.5% inflation mark, and not a result of economic turmoil. Consumers are struggling at home to pay for basic needs such as food and gas due to the high cost of living. The MPC voted 3-0-6 to keep interest rates on hold as the economy shows no clear signs of future direction. Market uncertainty is leaving policy makers in a state of confusion. Therefore, rate hike expectations for the end of the year have diminished although the likelihood of it happening are still very possible.
Additional Thoughts
A strong release could create bullish sentiment for the Sterling for the rest of the week since this is a high impact release. If the deviations are met, look to BUY the GBP/USD around the 1.6100 mark and SELL GBP/USD at the 1.6300 mark.
Pre-news Consideration
There is no pre-news consideration for this release today.
Definition
Revised GDP q/q from UK, is defined as “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.” GDP is the basically direct measurement of the economy, and a stronger GDP means that the central bank will more likely raise interest rate as better economy usually brings higher inflationary pressure…
Historical Chart and Data for UK Revised GDP q/q
Thanks,
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