Wednesday, December 21, 2011

EU courts approves the carbon tax

EU plans to impose tax on carbon emissions produced by airlines, reported the ECJ. The regulation envisages all airlines operating in the EU will have to pay levy on carbon emission starting from January 1, 2012. Foreign carriers oppose the decision citing the violation of aviation pacts and too high tax payments; for example, China's airlines will have to pay 95m euros under the scheme.

by Dukascopy Bank SA

Monday, December 12, 2011

US FOMC Interest Rate Decision - 13 December 2011

US FOMC Interest Rate Decision - 13 December 2011

Today’s FOMC Meeting will probably not impact the market as much, as the Fed probably ran out of new measures to stimulate the economy. As a matter of fact, most analysts agree that the Fed will be leaning towards providing a “clearer guidance” rather than a policy change, or in other words, inflation and unemployment targets for rate changes…

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UK CPI Y/Y 13 December 2011

UK CPI Y/Y 13 December 2011

We´ll be trading the UK Consumer Price Index (CPI) release at 4:30am NY Time today. We´ll be looking at the yearly release figure and the market could react with lots of volatility as CPI is the basic measurement of Inflation, therefore expect to see more exaggerated moves if we get a huge surprise release. Here is the forecast:
4:30am NY Time UK CPI y/y Forecast 4.8% Previous 5.0%
ACTION: GBP/USD BUY 4.5% SELL 5.1%

The Trade Plan

We are looking for a variable deviation of 0.2~0.3%. If the Inflation number increases to 5.1%, which is even higher than last months and definitely above BOE´s inflation target, we will BUY GBP/USD. If the Inflation number decreases to 4.5% or less, we´ll look to SELL GBP/USD. Historically, even with a slight difference of 0.1%, market usually overreacts. If our deviation is hit, there is a strong possibility that the market will move 50 pips immediately.
We´ll be looking to trade this release using my after-news retracement method. We´ll wait for the release, wait for market spike, and then wait for a decent retracement before jumping in. Read more


Sunday, December 11, 2011

European Union Summit First Results

European Union Summit First Results

Only 23 out of the 27 EU nations agreed to join the new treaty which implies giving up some sovereignty of the fiscal policy and towards closer fiscal integration.
The main points of the statement produced after the night of negotiations are:
- Participants of the treaty will need to have balanced budgets with structural deficit which doesn’t exceed 0.5% of the GDP (this requirement must be included in the constitutions of the member states);
- In case the rule mentioned above is breeched, the unspecified “automatic correction mechanism” will be activated;
- Countries with deficits of more than 3% of the GDP will face sanctions;
- Member nations will have to submit their national budgets to the European Commission, which will have the authority to ask for revisions. Member states will have to report in advance how much they plan to borrow.

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