Posts Tagged "positive"

Spring arrived this week

Posted by on Mar 10, 2014 in Featured, Market News, Uncategorized

Spring arrived this week

You may have heard that the British spend a lot of time talking about the weather. It’s true. But there is another nation that beats us on this score, the USA. In my view, they spend more time discussing the weather in the USA. They even have a dedicated weather channel on TV. Anyone following the US weather will be aware of their big winter freeze this year with exceptionally low temperatures. In her recent testimony to Congress, even Janet Yellen spoke of the impact of the freezing weather on economic activity in the USA. She mentioned that more data is needed as it is difficult to quantify the impact. When spring arrives, our collective mood improves and we feel more positive. The days are getting lighter, the weather is kinder and plants burst into growth. There is an impact on the economy as we head out and spend more. If people have to dig their way through snow drifts and fight off polar bears at the end of the street, they are hardly likely to be out there spending money and driving the economy forwards. Having said all that, the first green shoots of spring arrived this week. And they came from a surprising source – Europe. In his press conference on Thursday afternoon, Mario Draghi referred to the more positive data coming from Europe. Just the mention of growth caused the Euro to leap in value against the US Dollar. With spring arriving in Europe, it was only a short time to wait for the US figures (NFP) on Friday. Evidence from January and February suggested these figures were going to disappoint and the US economy was running out of steam. The dollar sold off again early on Friday giving a further opportunity to profit ahead of the figures. I was watching a trade in the market some 20 minutes ahead of the figures, I detected some buying of the US Dollar, not what I was expecting. As a trader, I am there to act on evidence though. It was this early buying that led me to close my Euro trade for a profit. At that time, I said to a fellow trader that I felt these figures are going to be better than the market expects. Nice when your gut feeling is right. Come the NFP announcement, the figures were better than expected and the previous month’s figures were revised upwards. Buy the dollar. It was an apt reminder that spring always follows winter. After the severe winter in the US, it was inevitable spring would arrive sooner or later. Following in Europe’s footsteps, the US NFP figures announced that spring arrived this...

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