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@tradezie

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Will Canadians catch a break from BoC? 🤔 

Ok Canada! We see you! 👀

Canadian CPI Core came in at 3.7% in May down from the 4.1% we saw last month AND beating the 3.9% consensus.

CPI is now sitting at 3.4%.

The annual inflation rate in Canada has officially dropped to its slowest pace in two years! 🐢

The Bank of Canada wanted to see inflation hit 3% by mid-year and although we're slightly behind schedule, it looks like we could make it if the current rate continues to drop over the next couple months. 👇🏼

But this really begs the question:

Will this be enough for the BoC to chill on interest rate hikes next month? After all, 4.75% is the highest rate we’ve since the early 2000’s - so perhaps we deserve a break? 🤷🏻‍♂️

Aussies saving millions at the pump 🤑

And look at Australia with the lowest inflation rate we’ve seen in over a year!

Knocking the consensus of 6.1% out of the park, CPI is sitting at 5.6% down from 6.8% in April. 😲

The main cause?

A substantial fall in the cost of fuel. Down from $1.72 per litre in April to $1.64 per litre now.

Doesn’t seem like much?

Fair enough. At a glance it looks like Aussies are only saving a couple bucks at the pump. ⛽️

But with an average of 43 million litres of gas being purchased each day, that eight cents turns into millions of dollars in savings each day.

Aussies are hoping this is enough for the RBA to pause rate hikes next week but experts say that the labour and housing markets aren’t slowing down enough for that. ☹️

Trade Of The Day 📈

USDCAD

Thursday News

Which session are you trading tomorrow? 👀

Here’s what you’re in for:
(All times in EST)

• 08:00 — Germany gets the message after 375 point hike 👆🏼

  • Event: Germany CPI (MoM & YoY)

  • Major pairs to watch: EURUSD

• 08:30 — US National debt in the TRILLIONS 🤯

  • Event: USA Annual GDP

  • Major pairs to watch: EURUSD, XAUUSD

• 19:30 — Japanese prices decline: but not without a fight 🤺

  • Event: Japan: Tokyo CPI & CPI excl. food & energy

  • Major pairs to watch: USDJPY

• 21:00 — China’s economy on the verge of expansion? 📈

  • Event: China: Manufacturing & Non-manufacturing PMI (Jun)

  • Major pairs to watch: AUDUSD

Germany gets the message after 375 point hike 👆🏼

Let’s take a look at the price tag on sauerkraut in Germany these days!

Tomorrow Germany will release both their annual and monthly CPI.

And after after that huge drop we saw last month, tomorrow calls for a slight increase; from 6.1% to 6.3%.

Expect EURUSD ↓

But this slight increase isn’t really newsworthy.

What is? 👀

The fall we saw in May from 7.2% to 6.1%.

After the ECB spent the last year hiking interest rates by over 375 BASIS POINTS, German consumers seem to take the hint. Time to stop spending and get those prices down.

What are prices looking like over there? 🏷

• Food prices were down from April’s increase of 17.2% to 14.9%.

• Energy down significantly from 6.8% to 2.6%.

• The price of services even ticked down slightly from 4.7% to 4.5%.

US National debt in the TRILLIONS 🤯

The US will release their annualized first quarter GDP tomorrow. Again.

They’ve given it to us once on May 25th where we saw a decrease from 2.6 to 1.3.

We saw a bit of a drop in Gold then. 👀

They always revise the data and give it to us again but the impact on the market is never as big the second or third time around.

The consensus for the revised data is no change.

In other news, the USA’s debt now exceeds the combined value of the GDPS from China, Japan, Germany and the UK. 😬

The US is in $32.03 TRILLION dollars worth of debt as of June, with the average American household having debt of $244K.

Japanese prices decline: but not without a fight 🤺

Japan’s prices are slowly making their way down. 👇🏼

They started the year with an annual inflation rate of 4.4%.; the highest it had been since the 90’s.

In April, down to 3.5%.

Another decrease expected for the May report released tomorrow, the consensus is 3.2%. 

Expect USDJPY ↓

Like most of the central banks around the world, Japan holds an inflation rate target of 2%. Although they haven’t seen that number in well over a year, they’re not too far off. 🤷‍♀️

So there’s nothing for Japan to worry about?

Not quite. Last month that 3.5% rate was UP from March’s 3.3%. 

Rising food prices and daily necessities added to the cost of living but that’s nothing compared to fuel costs which were rising at the fastest pace we’ve seen in over 40 years. 🤯

Hopefully the data tomorrow shows some relief in these areas. 🤞🏾

China’s economy on the verge of expansion? 📈

Two important scores to watch out for from China before we hit the hay. 😴

On this side of the globe anyway.

The Manufacturing PMI is set to increase ever so slightly from 48.8 to 49.5. 

Not quite reaching the minimum score of 50 to signal expansion in the industry.

This tells us how well businesses in the manufacturing sector of China are doing. And with manufacturing being the backbone of the Chinese economy, these scores tend to have a pretty big impact on the value of the dollar. 🤷🏻‍♂️

And then the non-manufacturing PMI score which will tell us how the service sector is doing.

China will survey roughly 1,200 companies covering 27 industries including ones like construction and transport.

The score is expected to drop in June from 54.5 to 50.8.

Still above 50, so the sector is growing, but not quite as fast.

Expect AUDUSD ↓

Why are we watching AUDUSD for Chinese news? 🤨

The Chinese Yuan likes to shadow the US Dollar; it typically moves in the same direction.

And at the same time, Australia relies heavily on trade with China, exchanging up to one hundred billion dollars’ worth of goods each year.

So news about the chinese economy means volatility for AUDUSD. 📈

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Technical Tip

Listen, we all struggle with the psychological aspect of trading.

There’s no shame in it. 🤷‍♀️

One of the biggest issues FX traders struggle with is exiting trades too early.

Do you do this? Here’s why you do this AND how you can stop it.