US
ISM non-manufacturing is not a key economic indicator but if the difference is large enough there is a pattern of directional price movement. The ISM non-manufacturing consensus forecast is 56.0. If the actual release is 51.0 or less GBPUSD might possibly increase 30 points or more above the pre-release price. If the actual release is 61.0 or more GBPUSD may possibly decrease 30 points or more below the pre-release price.
Automated Data Processing (ADP) non-farm payroll has recently been added as a tradable indicator. There is no formal prediction so we use the non-farm payroll consensus forecast as the ADP forecast and use the same triggers as the non-farm payroll number. Non-farm payroll is predicted to be 115k. If the actual ADP number is 61k or less market players might read it as a sign of economic weakness and sell the dollar, in which case GBPUSD might possibly increase 50 points or more above the pre-release price. An actual ADP number of 169k or more may be interpreted as a sign of economic strength, which may have a positive effect on the dollar and GBPUSD may possibly decrease 50 points or more below the pre-release price.
Non-farm payroll report is expected to be 115k. If the actual jobs number is 61k or less the dollar may weaken and GBPUSD may possibly increase 90 points or more above the pre-release price. If the actual jobs number is 169k or more traders may view it as dollar positive and GBPUSD may possibly decline 90 points or more below the pre-release price. It should be noted that in the past few months the revisions to the last 2 months releases have been much larger than the difference between consensus forecast and the actual current month’s number; as a result the price action has reflected the revisions much more than the actual number. Watch out for large revisions of the prior two months numbers and trade them accordingly.

UK
CIPS services PMI is forecast to be 58.8. If the actual is 59.8 or more the Pound might rally and GBPUSD might possibly increase 29 points or more above the pre-release price. If the number is 57.8 or less the Pound might weaken and GBPUSD might possibly decrease 29 points or more below the pre-release price.
Industrial production Most news trades for this indicator have been on negative surprises. This month the consensus forecast is for a gain of 0.1. If the actual number is 0.4 or more the Pound may strengthen and GBPUSD might possibly increase 50 points or more above the pre-release price. If the number is - 0.1 or less the Pound may weaken and GBPUSD may possibly decline 50 points or more below the pre-release price.
Interest rate decision rates are almost unanimously expected to be left unchanged at 5.00%. If rates are raised the Pound would likely appreciate in value as a result. Here is the trade strategy. If interest rates are raised GBPUSD may possibly increase 50 points or more below the pre-release price. Note, if interest rates are left unchanged the MPC does not provide an accompanying statement and therefore there is no news to trade.

EUR
European Central Bank interest rate decision The ECB is unanimously expected to raise interest rates to 3.50% from 3.25%. If interest rates are not raised this would be a huge negative surprise and EURUSD may possibly decrease 50 points or more below the pre-release price. If interest rates are raised the market will focus on Trichet’s press conference for possible trade ideas and will be looking spcifically for hints of what the ECB plans to do with interest rates in 2007.
ECB President Trichet’s press conference Assuming interest rates are hiked to 3.50%, Trichet’s words and tone will be carefully scrutinized by traders for hints of future ECB intention regarding further interest rate hikes. If Trichet chooses to talk tough (using the “vigilant” and “strongly vigilant” phrases) traders may interpret this to mean more interest rate hikes sooner rather than later. If Trichet “talks tough” (hawkish) then EURUSD may possibly increase 50 points or more above the pre-statement price. If Trichet does not mention that interest rates remain accommodative, or stresses future interest rate decisions will solely be based on incoming data, or indicates the higher Euro as an inflation hedge (all three are dovish comments) then EURUSD might possibly decrease 50 points or more below the pre-release price.

CAD
Interest rate decision is unanimously expected to be a decision to leave rates unchanged at 4.25%. If interest rates are lowered this would be a huge negative surprise and USDCAD may possibly increase 50 points or more above the pre-release price. Assuming rates are left unchanged traders will be interested to hear what the Bank of Canada has to say in light of a falling oil price, a weakening economy and still a very strong Canadian dollar. Traders will likely sell the Canadian dollar on any strong dovish comments in the statement accompanying the interest rate decision. If the accompanying statement contains any dovish comments or the tone of the statement is dovish USDCAD might possibly increase 50 points or more above the pre-release price. If the BOC is hawkish (focusing on the inflation risk) then USDCAD might possibly decrease 50 points or more below the pre-release price.  

AUD
Interest rate decision Australian interest rates are almost unanimously expected to be left unchanged at 6.25%. If interest rates are hiked this would likely be a big surprise and a very tradable event. Here is the trade strategy. If interest rates are raised AUDUSD may possibly increase 50 points or more above the pre-release price.
NZD
Interest rate decision The vast majority of economists are calling for interest rates to be left unchanged at 7.25%. If interest rates are hiked this would likely be a big surprise and a very tradable event. Here is the trade strategy. If interest rates are raised NZDUSD may possibly increase 50 points or more above the pre-release price. Assuming interest rates are left unchanged; traders will focus on the accompanying statement, which is widely expected to remain hawkish (leaving open the door for future interest rate hikes). If the accompanying statement in word or tone does not remain hawkish NZDUSD might possibly decrease 50 points or more below the pre-release price.

Trade of the Week

Last Week

4 for 6 including a couple of 100 pointers!

Indicator	Date	Buy	Forecast	Sell	Actual	Trade	Pair	T/V	Success	15	Min	30	60	90	120
US durable	11/28	(1.4)	0.2	1.8	(1.7)	Sell	GBPUSD	50@1.6	Yes	40	(2)	37	39	56	52
US confidence	11/28	103.0	106.0	109.0	102.9	Buy	GBPUSD	50@3.0	No	4	(34)	(29)	(28)	(44)	(36)
US home sales	11/28	5.833	6.150	6.467	6.240					4	(34)	(29)	(28)	(44)	(36)
US GDP prelim	11/29	1.3	1.8	2.3	2.2					29	(27)	0	27	27	26
US new home	11/29	972	1048	1124	1004					12	(38)	(31)	(36)	(56)	(47)
US core PCE	11/30	0.0	0.1	0.2	0.2	Buy	GBPUSD	50@0.1	No	28	(11)	11	25	43	71
US NAPM Chic	11/30	50.1	54.0	57.9	49.9	Buy	GBPUSD	30@3.9	Yes	38	(6)	40	83	103	100
UK CIPS manuf	12/1	55.1	54.0	52.9	52.6	Sell	GBPUSD	50@1.1	Yes	2	(23)	(38)	(55)	(31)	(36)
CAD labour	12/1	(8)	12	32	22					14	(5)	30	20	19	14
US ISM manu	12/1	49.6	51.8	54.0	49.5	Buy	GBPUSD	40@2.2	Yes	67	0	90	129	97	85