New Zealand Third Quarter GDP Missed Estimates, Economic Growth Continues

Economy expanded 0.2 percent in the third quarter, Statistics New Zealand reported today at 10:45 local time. The quarterly number missed the average estimate by 0.2 percent. New Zealand dollar fell against the yen and the US dollar after the report though the depreciation was somewhat limited. I made a very small profit by selling the NZDUSD after the news.

UK Retail Sales Disappoints Market

A 0.3 percent decline in November retail sales completely disappointed the market which was looking for a 0.6 percent increase.

Pound depreciated against the dollar and the yen, in a day that the sentiment in financial markets was battered by ongoing concerns about the credit quality of some countries, especially Greece which its rating downgrade raised questions about the economic healthiness of the euro-area. However - and with all the regrets! - I take my profit by selling the pound against the dollar after the report.

UK Jobless Claims Unexpectedly Fell in November

On December 16, employment data from the UK surprised the market. Jobless claims unexpectedly fell by 6,000 when analysts were waiting for more than 12,000 increase. It was the first decline since February. Unemployment rate however rose to 7.9 percent, in line with expectations. Sterling appreciated in response and I managed to take profit by buying the pound against the dollar just minutes after the report.

Australian GDP Missed Average Estimates

On December 16, a report showed that Australian gross domestic product rose just 0.2 percent in the third quarter, after 0.6 percent in the previous three months. The GDP figure missed the average analysts’ estimate by 0.2 percent. I sold the Aussie against the dollar and the yen just after the report and both positions resulted in profit.

Making 99 pips of profit from the falling Gold

US Advance Retail Sales and the University of Michigan index of consumer sentiment both rose more than estimates. Dollar rose and gold fell in response to the news and I managed to make 99 pips of profit by selling gold after the retail sales report.

50 pips Profit on FOMC Statement

The FOMC announcement showed that the policymakers are starting to think about the possible options in order to wind down the accommodative measures when the economy resumes its growth. Referring to the purchases of mortgage-backed securities and housing-agency bonds, the Fed said that it “will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010”.

Stocks dropped and treasuries rose in response to the decision and it was when I decided to bet on rising risk-aversion by buying the yen. I sold eurjpy and the trade finally resulted in 50 pips of profit in almost 6 hours. The following charts show the market reactions.

50 pips of Profit from the Continuing Weakness of the U.S. Dollar

Today, I made 50 pips of profit by buying eurusd in early European markets. The dollar is generally weak these days and my bet was that the Beige Book from the Fed, which was expected to show the policymakers’ desire to hold interest rates low, would work in favor of that trend.

50 pips Profit from the UK Retail Sales Surprise

I managed to make profit from the U.K. Retail Sales report on Feb 20. A 0.7 percent increase in January surprised the market which expected to see a 0.1 percent decline. I bought GBPJPY in minutes before the report. It was however more a gamble than a usual trade as I hold the position after the report.

147 pips Profit from the BOE Quarterly Inflation Report

On Feb. 11, I mad 147 pips of profit by selling gbpusd ahead of the Bank of England (BOE) Quarterly Inflation Report and may be more importantly the ILO Unemployment report. It was after nearly 5 percent drop in the U.S. equity indexes on rising skepticism about the Treasury's plan for fixing the financial system.

Jobless Claims rose by 73,800 in January, a little better than the estimates, and the unemployment rate climbed to 6.3 percent. Mervyn King, the BOE Governor, painted a very gloomy picture about the state of the U.K. economy in the coming months, saying that the MPC may start buying assets to print money even before the next meeting in March. However, the charts below might show that the news was mostly priced.

Case-study: U.K. PMI (Service)

On Feb.4, the PMI report showed that the service industry continued to contract in January. The figure came better than average estimates.

U.K. Nationwide Consumer Confidence also dropped to record low. I made a small profit from selling gbpjpy before the report and I decided to close it soon after announcement of a new stimulus package from Australia.

Japan Industrial Production Fell to Record Low

Industrial production in Japan fell 9.6 percent just in December. Jobless rate also rose to 4.4 percent, a three years high. The U.S. Q4 GDP was ahead and investors expected a 5.5 percent contraction.

U.K. GfK consumer confidence also fell as the Britain become increasingly worried about job security and the prospect of the economy. I made 41 pips of profit by selling gbpjpy before the reports. I had also a short position on usdjpy which closed in 51 pips of profit.

The House Passed $816 bln Stimulus; No Republican Support

On Jan 28, Obama's stimulus package passed by the House but without any support from the Republicans. It needs the Senate's passage where the lawmakers seem to be even more divided. Republicans say that the plan is ineffective because the tax cuts are relatively small and most of the spending plans would not stimulus the economy until 2010. The positive effects on the market sentiment started to fade much sooner than I was expected; however I made profit by selling usdjpy ahead of jobless claims and Friday's U.S. GDP.

Profit from the RBNZ Rate Reduction

On Jan 28, the Reserve Bank of New Zealand (RBNZ) cut the cash rate by 1.5 percent to 3.5 percent. It was 0.5 percent more than average estimates. I made 84 pips of profit by selling nzdjpy after the FOMC announcement and less than 30 minutes before the RBNZ rate decision (I closed it about 15 minutes after the announcement). I made also profit from selling audusd but the position closed before the announcement.

10 Percent Profit on UK GDP Contraction

UK GDP (A) Contracted 1.5 percent, a little more than estimates. I made 10 percent profit with selling gbpusd three times before the GDP announcement. Pound was under pressure from the start of the week and I was asking myself that to what degree the negative news were priced.


1 - Opening the first position

2 - Opening the second position (with a conservative stop loss)

3 - One position automatically closed with 147 pips profit

4 - I closed the other with 124 pips profit

5 - Another position opened latter

6 - I closed it just minutes before the announcement with 105 pips profit

7 - End of the day

8 - GBPUSD in week

Profit from Rising Unemployment in Britain

Ahead of UK GDP, I made 107 pips profit by selling gbpusd betting on the pressure from the UK unemployment report on the sterling. I had also an order at 1.4030 for the time I was asleep but it never triggered as the price didn't go beyond 1.4019.

Profit from the BOE Rate Decision

The Bank of England was expected to cut rate on Jan8. However, British pound was rising in all days before the rate decision, mostly because of the weakness in Euro and Dollar. I sold GBPJPY in late American session and the position automatically closed with more than 200 pips of profit well before the rate decision announcement (BoE cut rate by 0.5 percent; in line with expectations).