What I discovered in China - Andrew Barnett, LTG GoldRock

You can physically feel the need for speed. Impatience is everywhere and there is an insatiable appetite to get ahead amongst the 1.375 Billion people who live in what will shortly be the biggest economy in the world. China has opened up to the world on a massive scale over the past 20 years and after a week listening and watching I concluded that the business opportunities to explore this fascinating and diverse country have really only just begun.

Those were my overall findings from spending last week in Shanghai. I left with the distinct feeling China is the new frontier and whilst it technically remains a communist country being such has strangely meant its financial firepower is arguably stronger than developed democratic countries who are mostly struggling under the weight of massive debt, low interest rates, low growth and low inflation and they seem to be reliant in China in some way or another. Australia for commodities, the US for selling their bonds and products are just two examples. China is the elephant in the room.

LTG GoldRock Members can read the full report in today's GoldRock Insider Report for Monday the 15th of June, 2015.

US Fed statement drives the US Dollar lower and stocks higher.

They removed the word “patient” from their statement however it wasn’t the wording in the statement that drove traders to abandon the US Dollar and jump into US stocks on Wednesday. It was the Fed’s adjustment of its expectations for the US economy when it comes to inflation, growth and interest rates.

Traders on Wednesday assumed the US Fed would raise rates later in the year rather than sooner however Janet Yellen really didn’t give a firm indication either way. She simply said the Fed had removed the word “patient” from its statement but said the Fed could make a decision any month to raise interest rates. She’s certainly frustrating the market with her Dovish but yet slightly Hawkish comments.

Clearly the US Fed doesn't see the economy strong enough just yet but it is ensuring the market knows that if the data does rebound strongly, inflation lifts and job creation continues it could act at any time. One part of the statement that was also responsible for the US Dollar diving on Wednesday was the fact that US Fed lowered its forecast of where the official cash rate will be in December this year. It lowered its forecast by 0.50%.

You can read the full report in Today's LTG GoldRock Insider Report. for more information about our trading community and how you can learn to trade go to www.ltggoldrock.tv

The Week Ahead in the Forex Market

It is going to be a busy week for economic data and you only need to look at the High Impacting News announcements below to see currency markets are highly likely going to be volatile this week. There is that word “volatile” which many people think means risk but as you are now managing your risk to a static risk on every trade the fact there is lots of volatility coming simply means an increased profit opportunity and a set downside risk.  

 

For the full report check out Today's LTG GoldRock Insider Report.

In other market news.

• US Industrial Production expanded 1.3% in the month of November from the same period last year. Another little sign the US economy is continuing to gain strength.
• The RBA Minutes from its December meeting are due out today at 11.30am AEDT so expect some increased volatility on the AUD at that time. Traders will be eager to see what the RBA committee discussed and whether or not there was any discussion or hints about a cut in the official cash interest rate in 2015. If this was the case the AUD will quickly slide lower.
• In case you are wondering if the tragic events that unfolded in Sydney yesterday and overnight impacted financial markets the answer is yes. The AUD yesterday morning around 10am local time dropped around 25 ticks and continued to make a new low in price throughout the day. The AUDUSD traded as low as 0.82005.

LTG GoldRock Director Andrew Barnett provides FX Market Analysis in the Daily GoldRock Insider Report. Register for the next LTG Goldrock Live Trading Room Session from www.ltggoldrock.com

China and the Greeks spark market sell off.

It wasn’t just one thing it was a number of things that sparked the sell off on stocks and drove the Yen off its lows. Tuesday was a great example of traders buying the Yen in times of stock market uncertainty.




Chinese stocks went down 5% which is the equivalent of the Dow Jones being down 900 points (a big down day on the Dow Jones is about 150) and Greek stock markets dropped over 12.7% which is the biggest single decline in 27 years.

The Greek government has called an election a couple of years early and overall Europe has a big struggle on its hands and countries such as Greece, Spain and Italy will cause more grief over coming months and years for the European Central Bank.

The full LTG GoldRock Review of this Forex News can be found in the GoldRock Insider Report for Wednesday 10th December 2014