Currency Market | Forex Blog

September 14, 2011

Forex Market Outlook 9/14/11

Filed under: Forex News — Tags: beneficiary, currency market, dow, invest, morning, practice account, rate-decision, the-marketplace, trades, trend — admin @ 8:36 am

This morning the markets appear to be in risk taking mode as hopes that the European debt crisis can be contain are outweighing fears of further contagion. This has markets moving higher, led by stocks and the Euro and with gold selling off.

While this does not by any means imply that the problems are over, the markets are re-calibrating themselves in anticipation of a potential solution in Europe, though the Euro is giving back earlier gains. It is quite possible that today will be the type of day that flips back and forth between risk appetite and aversion. A conference call later this morning between EU countries has the markets high on anticipation.

In the UK, the jobless claims figures came in better than expected with fewer newly unemployed. 20K lost jobs vs. the expectation of 35K and the weekly earnings were slightly higher.

The Aussie and Kiwi are also trading lower and giving back earlier gains despite the fact that consumer confidence figures came in much better than last month. However, housing starts in Australia declined 4.7% on interest rate outlooks so the potential for a declining economic picture is on investor’s minds.

The Kiwi, on the other hand, appears to be the beneficiary of a strengthening economy and we will learn more from the Central bank later today when the RBNZ has it’s rate policy meeting. Rates are expected to remain steady at 2.5%.

Here in the US, economic stagnation persists as advanced retail sales figures came in worse than expected showing no change vs. an expected gain of .2%. This is concerning because we are in the middle of the “back to school” season which usually means more spending so overall spending may be a whole lot worse.

The economic picture here in the US is slowly deteriorating the “jobs bill” that the President has proposed is more of political posturing than a serious or credible bill to get people back to work. Apparently the American people are going to have to suffer for the rest of this President’s term as he appears to be unwilling to compromise from the ideology that got him elected but largely has failed.

So there is still major risk in the marketplace, though it might not be reflected at this stage of the morning. Recent trends have the US dollar strengthening as money is moving away from the Euro and needs to find a home.

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September 2, 2011

Forex Market Outlook 9/2/11

Filed under: Forex News — Tags: a-storm-brewing, commodities, currencies, currency market, currency trading, interest-rates-, markets, mike conlon, nzd, time, trader, trend — admin @ 7:08 am

Wow, we have just received one of the worst Non-Farm Payrolls reports on record, which showed that ZERO jobs have been created last month. That’s right, ZERO. Nada. Nilch. The expectation was for a gain of 65K jobs, but not a single one was created.

The good news is that the unemployment rate remained steady at 9.1%, though this is likely because of people dropping out of the labor force. The White House just came out with their own economic projections saying that the unemployment rate would stay above 9% for the rest of the year. No shock there.

Next week we get to hear the President’s ideas for job creation and frankly I couldn’t be less interested. This administration has been a total disaster on the economic front and the US is moving closer to double-dip recession with every passing day of ineffectual political leadership.

Obviously markets have tanked with the exception of gold, as the expectation is that Bernanke and the Fed will attempt to come to the rescue again with QE3. However, the markets aren’t ready just yet to come in to buy on that hope, and we will likely see continued volatility.

Meanwhile, the Dollar tanked right out of the gate against just about everything but the Loonie, though it is gaining strength vs. the currencies deemed “risky” like the Aussie, Kiwi and Euro. The Swiss franc, particularly has been gaining strength.

Oil prices are pulling back despite the threat of a supply disruption from a storm brewing in the Gulf of Mexico, and gold has shot up higher to around $1880.

Not much else matters this morning, and it will be interesting to see if the believe in QE3 can reverse some of this sentiment. My hunch is that we will not see much buying activity here, as we are heading into the long, holiday weekend.

Monday’s holiday is ironically Labor Day. Though it may have to be re-named Non-Labor Day!

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August 18, 2011

Forex Market Outlook 8/18/11

Filed under: Forex News — Tags: australia, carry trade, changing-risk, currency market, dollar, fear, inflation, interest-rates-, markets, mike conlon, testing-the-all, unemployment — admin @ 7:04 am

Well it looks like there is some major selling in the global equities markets today as fears of a global slowdown have induced risk-aversion. Gold is back over $1800 and is re-testing the all-time nominal highs, yet the currency market seems fairly tame by comparison.

Part of the reason seems to be the fear of intervention from the safe haven currencies, namely the Swiss franc and the Japanese yen. As markets have sold-off, money has poured into these currencies, as well as gold and US treasuries. The US dollar is strengthening, but also has the dampening effect of the Fed’s policy that they are going to keep rates at these extraordinarily low levels.

The problems in the Euro zone are not going away and the Merkel-Sarkozy meeting did little to assure markets and a lot to disrupt. The idea they floated of imposing a financial transaction tax will most likely cause money to start seeking alternatives as further taxes and regulation inhibit capital formation and not foster it.

Adding to the global economic slowdown story is the UK, who reported declining retail sales figures of -.2% vs. an expectation of a gain of .1%. As a result, stocks in Europe are down some 3%.

The hope that US economic data would save the day have been thwarted as Initial Jobless Claims once again came back in over 400K for the 18^th time in the last 19 weeks. CPI data did not help either, as the expected declines did not materialize and in fact ticked higher, showing that we are most likely heading for a stagflationary environment.

Headline CPI came in showing a gain of .5% vs. an expectation of .2% which kept the YoY headline figure at 3.6%, the same as last month and above the expected 3.3%. This figure can be somewhat confounding to some as the “normal” expectation is that the fed would consider raising rates to combat higher inflation—but Bernanke just told us last week he’s not budging on rates until mid-2013!

With the threat of higher taxes coming from the government and higher inflation (which essentially is a tax on all), it is not surprising that there is not a lot of consumer confidence at this point. Bernanke has essentially painted himself into a corner and the idea that consumers are going to come back is laughable.

Later this morning, existing home sales and the Philly Fed are due out but I can’t see how these data points, even if better than expected, can reverse market sentiment.

Meanwhile, our great leaders here in the US are all vacationing, and I hope it rains wherever they are. President Obama announced that he would release his new plan to create jobs—right after he gets back from vacation! I’m guessing this vexing problem of unemployment and a floundering economy is not going to affect his golf game. Frankly I’m tired of hearing from all of these buffoons in Washington anyway. So perhaps we would all be better off if they all took a permanent vacation!

Today will be interesting to see if the US stock market can reverse, and if the correlative effects carry over to the currency market. The situation looks bleak from a global perspective, so trade cautiously!

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August 9, 2011

Forex Outlook 8/9/11

Filed under: Forex News — Tags: bank, currency, currency market, dow, forex, gold, london, point, pound — admin @ 8:07 am

The markets appear to be “stabilizing” for the time being after yesterday’s massive sell-off, the 6^th largest down move for stocks in the history of the markets. Oil has pulled back as well, though gold is sky-rocketing to new daily highs, reaching just under $1780.

There is obvious fear in the marketplace, and what started out as debt concerns both here in the US has become global economic growth concerns. So right now, the market is unsure who poses the bigger the risk, the US or the Euro zone. This is reflected in the currency values, as EUR/USD has been trading a range with no clear direction.

This is in stark contrast to the commodity currencies, which have sold-off greatly lead by the Aussie which is down close to 10% for the week! On the flip side, the safe havens have received these money flows, with the Swiss franc making new all-time highs vs. Euro and USD. The Japanese yen is also strengthening despite the attempt to weaken the currency through intervention last week.

The British pound is also trading a range as their economic data weakens and also dealing with the “protests” taking place in London right now. I’m not sure that the media is giving this the proper attention it deserves, but looting and rioting are taking place as a single incident has ignited the anger over austerity measures.

One of the last bastions of growth in the global economy has been China, and overnight their CPI data came in higher than expected showing inflation of 6.5% which means that they may make further efforts to slow down their economy. Talk of the global “double-dip” is starting to heat up, as it appears that the soft patch we were dismissing the data as may become a harsh reality.

So it’s the Fed or nothing today, as all eyes are on the FOMC meeting taking place today. What, if anything, can the Fed do at this point? Bernanke will clearly attempt to calm fears in the market but at this point it may be difficult to provide the magic pill that everyone so desires. Instead, the medicine we may be forced to take is a much tougher pill to swallow.

The global banking system while not in great shape is clearly better than in 2008, though European bank exposure to sovereign debt and US bank exposure to a still-declining housing market may make it difficult to bring confidence back. Money pours into US Treasuries, as it is not certain where to go.

So how do we get out of this mess? It all comes back to economic growth. Without it we are doomed and those who think the government can pick up the slack are delusional. Without job creation form private business, demand will continue to weaken.

So while stocks may be higher to start the morning, do not be fooled into believing a bottom is in. This saga is far from over, and thankfully politicians are on vacation for the rest of the month so I don’t have to listen to the blame game take place.

Be cautious and judicious in your trading and use strict risk management principles. Volatility can be your friend, though it can also be your greatest enemy!

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July 22, 2011

EU Does Their Part!

Filed under: Forex News — Tags: australia, currency market, easily-clearing, gold, invest, italy, oil, politics — admin @ 7:21 am

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March 22, 2011

Inflation Situation!

Filed under: Forex News — Tags: aussie, cad, currency market, events, forextrading, globe, practice, world — admin @ 12:54 pm

Earlier this morning, the UK CPI data came in hotter than expected showing inflation rising at 4.4% vs. an expectation of 4.2%. This is already more than twice the BOE target, and outside of the government band of 3%, which will require the BOE to explain to the government why this is happening.

While the BOE is already accustomed to writing this letter, they are beginning to paint themselves into a corner as a higher Pound could get even stronger if the BOE begins to raise rates. Tomorrow is the release of the rate policy meeting minutes so it will show what they are thinking about the inflation situation brewing.

Meanwhile, there is not a lot of new on tap today, with Canadian retail sales figures and the leading indicators due out later this morning. In the US, the home price index is on tap.

More important though is not the micro news coming out of individual countries, but the macro view of what is going on the world today. There are three basic themes driving world markets today: the Japanese nuclear crisis, unrest in the Arabian countries, and the continuation of QE2 in the US which is essentially weak US dollar policy.

As more and more clarity emerges, sentiment may shift. Oil prices are lower despite Libyan oil supply essentially going off-line, but the markets have already priced this in. Risk is still heightened around the globe, but that hasn’t stopped stocks from moving higher. As the saying goes, “the show must go on”.

In the forex market:

Aussie (AUD): The Aussie is mostly higher as the markets rebound from the sell-off due to the Japanese earthquake last week. While there isn’t much news this week for the Aussie, it has received the correlated benefits of a higher MSCI Pac Rim index.

Kiwi (NZD): The Kiwi is the big winner this morning ahead of tomorrow’s GDP report. While GDP is expected to decline in the short-run due to their earthquake, the IMF came out this morning and said that 2012 growth could be north of 4% due to the rebuilding efforts.

Loonie (CAD): The Loonie has now flipped to lower this morning as retail sales figures have come in worse than expected. The market was looking for a gain of 1%, and it came in at -.3%, which is a bad number. Lower oil prices are also contributing to Loonie weakness. (Click chart to enlarge)

Euro (EUR): The Euro is mixed this morning and is virtually flat against Dollar and Yen. No news is good news out of the Euro zone today.

Pound (GBP): The Pound is mostly higher after today’s CPI report. Tomorrow’s BOE rate policy meeting minutes will determine the near-term fate of the Pound. (Click chart to enlarge)

Dollar (USD): The Dollar is mostly weaker as QE2 is driving the bus right now. Were it not for its safe-haven properties, the Dollar could be a lot lower. It is unfortunate that it takes bad news from around the globe to maintain Dollar strength.

Yen (JPY): The Yen is weaker across the board after the Nikkei posted massive gains of over 4% last night as it was closed on Monday for holiday. The nuclear crisis is obviously the major news, and the G-7 stands ready to intervene further if the news gets worse.

With all the problems going on around the globe, it is sometimes easy to lose track of the individual stories in various regions. The inflation story in the UK would be major news were it not for these other events taking place.

Perhaps the BOE is relying too much on other to make this problem go away. Tomorrow we will see if there is any conviction to combat inflation. The QE2 party will soon be coming to an end so perhaps various markets are attempting to “bubble up” so that when the inevitable burst comes, it will be farther to fall.

To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!

To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!

Tags: account, AUD, Aussie, blog, cad, course, currenc, currency, currency market, currency trading, dollar, EUR, Euro, forex, forextrading, free, fx, fxedu, gbp, Il, jpy, Mike Conlon, news, nzd, practice, practice account, ssi, time, USD, Yen

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February 21, 2011

President’s Day And More!

Filed under: Forex News — Tags: a-bank-holiday, a-major-risk, check-out-our, currency market, earthquake, mind, situation, snow — admin @ 1:00 pm

Today is President’s Day here in the US so it is a bank holiday and most financial markets are closed for the day—yet the forex market is open for trading! However, volume in the US session will be noticeably lighter as the bank holiday will reduce participation.

So today’s blog article will be an abridged version—as I still need to make my way to the trader’s expo here in NY where I will be giving a presentation at 3:30. And I also have a minor snowstorm to navigate, though this winter has left me indifferent to the fluffy white stuff as it has become less of a surprise and more of an expectation.

Some “surprises” coming from the Arab nations have heightened risk in the region and threaten stability as protests in different nations are met with different responses. Just days after protests in Egypt forced change in the government, it is not going as well in Libya as it is already been reported that over 200 people have died. This situation could explode into Civil War, as warned by the son of leader Quaddafi.

This situation is far from over and represents a major risk to global stability. As such, the forex market is in risk aversion mode.

Overnight, German business confidence figures were higher but the Euro is trading lower on risk themes. There will be GDP and CPI data figures released later this week.

One anomaly taking place this morning is a higher Kiwi, as expectations of tomorrow’s inflation expectation report has traders postioning accordingly.

At the end of the week, both US and UK GDP figures will be released.

So this week is busy with news, while heightened risk from Arab countries will keep the markets on edge. It is not quite smooth sailing this week which like the snow in NY is not surprising but more of an expectation.

If we are able to run this economic gauntlet this week without too much damage, then I may be surprised! So the only trading I’ll be doing this week will be demonstrations at the Expo, and if you are nearby come stop in and say ‘hi’.

For the rest of you on the internet:

To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!

To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!

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February 7, 2011

Super Bowl Hangover?

Filed under: Forex News — Tags: a-monthly-gain, a-respite-from, a-show-signs, aussie, course, currency market, economic, euro, fxedu, gbp, practice account — admin @ 12:46 pm

I guess that’s what the markets are counting on as there is very little economic data due out this morning. While the timing is purely coincidental, a respite from news gives the market time to re-evaluate current levels and look ahead to more important data due out later in the week.With that in mind, let’s take a look back at Friday’s NFP report.

While I take no pleasure in being correct that the number would come in worse that expected, I was a little bit shocked at off and un-reliable those numbers appeared to be. How can the number of jobs created miss by a wide margin and the unemployment rate improve .4%? “Official” unemployment was reported at 9%, which some have deemed mathematically impossible. As I have said in previous blog articles, you can’t have the BLS (Bureau of Labor Statistics) without the BS!

The only significant news to speak of this morning is that German Factory Orders came in worse than expected, showing a monthly decline of 3.4% vs. an expectation of a decline of 1.5%, bringing the YoY figures lower to 19.7% from an expectation of an increase of 21.3%. This has prompted further selling in the Euro, which may have topped out at 1.385 from early last week. The market is starting to come around to the idea that without a comprehensive plan to handle the debt crisis, it will be difficult for the ECB to raise interest rates despite the growing inflation the Euro zone is experiencing.Returning to the situation in Egypt, while there is no sign that a resolution is near, order is starting to return to daily life while negotiations take place. Stay tuned for this one, and keep a close eye on oil prices.

In the forex market:

Aussie (AUD): The Aussie is mostly lower as retail sales figures came in lower than expected, showing a monthly gain of .2% vs. an expectation of a .5% gain. Thursday morning is the Australian employment report which is the economic data highlight of the week.

Kiwi (NZD): The Kiwi is trading slightly higher and receiving the bulk of commodity currency in-flows as negative data from its antipodean neighbor Australia show signs of a slowdown. (Click chart to enlarge)

Loonie (CAD): The Loonie is mixed this morning ahead of a building permits number that is due out and expected to show a slight increase of 2% vs. a decline seen last month. With oil prices slightly higher due to event risk in Egypt, volatility will likely come from abroad.

Euro (EUR): The Euro is lower across the board after last week’s summit in Brussels failed to produce any meaningful solutions to the debt crisis. While this was not entirely unexpected, recent hawkish rhetoric from the ECB may be falling on deaf ears until a debt plan is established. (Click chart to enlarge)

Pound (GBP): Euro losses are the Pound’s gain as money flows from the common currency as potential losses seem likely. The big news this week comes on Thursday, as the BOE will give its rate decision. Recent signs of inflation have the market suspecting that a hike may be near, though such action appears unlikely this time.

Dollar (USD): The Dollar is strengthening this morning as the Euro weakens despite no news on tap for today. This week is relatively light of news, so we’re going to get some “Fedspeak” to fill the data voids.

Yen (JPY): The Yen is mostly lower as despite some recent encouraging economic data and the Nikkei was higher overnight. The Yen may be losing some its panache as a safe-haven currency after the credit downgrade by S&P two weeks ago.

On days that are light on news and data points, market correlations sometimes come back into play as one dominant theme can drive the marketplace. This morning that theme is Euro weakness, however that could change when the US market opens.

So often times we can see some mean reversion plays as the market moves throughout the day. By being able to figure out what is actually moving the markets, traders can then look for opportunities in other instruments that may follow suit.

To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!

To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!

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February 1, 2011

Game On!

Filed under: Forex News — Tags: aussie, course, currency, currency market, egypt, forex, free, gbp, jpg, middle-eastern, mike conlon, morning, picture, practice — admin @ 12:59 pm

The market is turning its attention away from the situation going on in Egypt as there is confidence that while this a political uprising and rally, there is no violence to speak of and that the government appears to be stable– for now. The uncertainty that caused last Friday’s risk aversion and subsequent sell-off is now becoming, well, more certain, as this appears to be less of a threat.

As a result, we have some risk taking in the market, with world stock indices higher and oil prices falling from recent highs. However, I don’t want to celebrate prematurely as the real threat going for forward is how other Middle Eastern nations that are similar to Egypt will react and if there will be any further uprisings which may not be as peaceful and therefore casue instability. Stay tuned.

Earlier this morning, the RBA left rates unchanged in Australia at 4.75% which was expected, and comments from the Governor while intended to be dovish may have left the door open for inflation to rise despite the flooding.

There is also strength in the Japanese yen this morning, as Dollar weakness as a prevalent theme has re-emerged and money flows shift to Japan to avoid Dollar losses.

In the Euro zone, unemployment declined slightly to 10% and PPI figures came in higher than expected showing signs that inflation may be afoot.

In the forex market:

Aussie (AUD): The Aussie is higher across the board after rates were left unchanged. House prices came in higher than expected which showed that the temporary economic lull form the flooding may have only dampened inflation temporarily. Rebuilding efforts to repair the damage from the flooding may contribute to excess demand which could alsopush prices higher. (Click chart to enlarge)

Kiwi (NZD): The Kiwi is also higher as risk appetite in the market has improved and overnight they reported that wages remained steady to slightly higher.

Loonie (CAD): The Loonie is mixed this morning as declining oil prices are adding to sentiment that the Bank of Canada wants a weaker Loonie as it has attempted to jawbone it lower as of late. A higher valued currency affects Candian exports negatively.

Euro (EUR): The Euro is lower against all but the Dollar despite higher PPI figures that came in showing a gain of 5.4% vs. an expectation of 5%. In addition, Euro zone PMI figures came in better than expected, posting a reading of 57.3 vs. an expectation of 56.9. Lower oil prices are also weighing on the Euro due to the anti-Dollar effect.

Pound (GBP): The Pound is also mixed as Nationwide House Prices declined less than expected last month and a report came out that the BOE may need to raise rates 125 basis points this year to combat inflation despite austerity measures. IN addition, PMI figures came in much better than expected, posting a reading of 62 vs. an expecation of 58. (Click chart to enlarge)

Dollar (USD): The Dollar is weaker across the board as a resumption of selling due to QE2 has occured now that there is more clarity out of Egypt. The ISM Manufacturing number is due out later this morning and will show if we are making any economic progress.

Yen (JPY): The Yen is stronger acorss the board despite the risk appetite in the market as money flows are leaving the declining Dollar and setting up camp in Japan for its safe haven properties.

It appears as though the global economy is recovering, albeit slowly. Rising prices however are an artificial measure of increased activity because it doesn’t actually add more to the bottom line, it just shows that things cost more.

The situation in Egypt is an interesting “case study” as these types of uprisings may be the new paradigm for Middle East politics which couldn’t be more varied and different. Should these uprisings start to occur with more regularity, then it will inevitable that some will end badly. Attempting to paint this picture with one broad brush is not only insufficient but dangerous. So my caution goes up when I see market reactions like today’s action.

While its true that it may be “game on” again, look for the game to be interuppted more frequently and more rapidly.

To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!

To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!

Tags: account, AUD, Aussie, blog, cad, course, currenc, currency, currency market, currency trading, dollar, economy, EUR, Euro, forex, forextrading, free, fx, fxedu, gbp, Il, interest, jpy, Mike Conlon, nzd, practice, ssi, time, USD, Yen

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January 21, 2011

Retail Sales Tales!

Filed under: Forex News — Tags: against, aud, cad, china, currency, currency market, dow, euro, forex market, free, future, mike conlon, new zealand, sentiment — admin @ 2:55 pm

This morning we received three different retail sales reports from the UK, Canada, and New Zealand, each telling a different story about economic progress. Retail sales are a good barometer of consumer expectations and confidence, and can sometimes forecast inflation fears. The logic is that if you think prices are going up, you may want to buy today rather than chance paying more in the future.

In New Zealand, retail sales increased 1.5% vs. an expectation of 1.1%, though most of that was led by cars and energy as the core rate actually fell for the second straight month. So traders need to be careful as this actually shows weakness and not strength, as consumers are more focused on debt reduction.

In the UK, retails sales declined .8% vs. an expected .2% decline for the largest December decline on record. Higher prices and inclement weather is the excuse given, but overall this may be a sign that already inflation is taking a toll.

In Canada, retail sales figures came in much better than expected, posting a gain of 1.3% for November vs. an expectation of .4%. This shows economic strength and resilience as the Canadian economy appears to be picking up steam.

In the Euro zone, German business climate and expectations figures came in better than expected, though the current assessment figures came in lower. This improved outlook has helped buoy the Euro higher this morning.

Lastly, my “ I told you so moment” : the Dollar is weaker today as yesterday’s prevailing thought that China would attempt to tighten monetary policy seems unlikely as it is looking more doubtful that they will raise rates as they are potentially facing a liquidity problem in overnight lending. Yesterday I mentioned that I thought the market had it wrong and that I didn’t think they would move to tighten. It’s always something!

In the forex market:

Aussie (AUD): The Aussie is mostly higher on the Chinese sentiment reversal that occurred overnight.

Kiwi (NZD): The Kiwi is mostly lower on disappointing retail sales figures, despite the headline number. However Dollar weakness means that it is higher against at least one currency.

Loonie (CAD): The Loonie is higher against all but the Euro despite lower oil prices. Retail sales figures came in better than expected and a bit of inflationary pressure could reverse dovish comments made by the BOC earlier this week at their interest rate announcement. (Click chart to enlarge)

Euro (EUR): The Euro is higher across the board as anti-Dollar sentiment and a renewed economic outlook from Germany looks positive for the Euro zone. However, Fitch rating agency has warned of potential future downgrades which may be tempering Euro gains today. (Click chart to enlarge)

Pound (GBP): The Pound has rebounded from earlier losses to now posting gains vs. the majority except Euro. While retail sales were worse than expected, the prevailing thought is that inflation is to blame for the result which should provide Pound hawks with more ammo to support their notion that the BOE needs to be less accommodative with monetary policy.

Dollar (USD): The Dollar is weaker across the board as the sentiment that China would tighten has been reversed. Stocks in the US are lower to start the morning and there is no news on the docket that would be a potential game-changer.

Yen (JPY): The Yen is higher against all but the Pound and Euro as signs of diminishing deflation are starting to emerge. Japan has been mired in a deflationary “death spiral” for some time and the government has raised its economic assessment for the first time in 7 months.

We can learn a lot from consumer behavior which manifests itself in the form of retail sales figures as this can give us clues as to where each nation may be with regard to inflation. Higher retail sales can mean that inflation expectations are higher for the future; and lower sales can be a sign that inflation is already a current concern.

It is no secret that global inflation is on the rise, particularly in emerging markets countries, and the question remains whether or not Central banks will be quick enough to act or whether they will be content to allow inflation to scare people into consumption.

While this may deemed “necessary” by some (Bernanke et al), it really is unfortunate that they feel that the only way to economic recovery is through the potential hardships of the people they are meant to govern.

This story isn’t finished folks, not by a long shot!

To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!

To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!

Tags: account, AUD, Aussie, bank, Bernanke, blog, BOE, cad, canada, central bank, China, course, currenc, currency, currency market, currency trading, dollar, dow, economic, economy, EUR, Euro, fear, forex, forex market, forextrading, free, fx, fxedu, gbp, Il, interest, interest rate, Japan, jpy, Kiwi, live, loonie, lot, lower, market, Mike Conlon, new zealand, news, nzd, oil, pound, practice, practice account, retail sales, sentiment, ssi, stock, stocks, time, trade, trader, USD, Yen

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