Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com
The financial industry anticipates major economic reports this week, focusing on the US Retail Sales and Australia Wage Price Index and Employment Change. These reports are crucial for traders navigating the markets and making informed decisions.
NY Empire State Manufacturing Index | US (15 May) The NY Empire State Manufacturing Index unexpectedly jumped to 10.8 in April 2023 from -24.6 in March 2023. Analysts expect a reading of 8 for May 2023.
Claimant Count Change | UK (16 May) The number of people claiming for unemployment benefits in the UK rose by 28,200 in March 2023, the first increase in three months, and the biggest since February 2021. The UK Claimant Count Change for April will be released on 16 May, with analysts expecting a decrease of 15,000.
Consumer Price Index | Canada (16 May) Canada’s CPI increased by 0.5% in March 2023 compared to February 2023 figures. Data for April will be released on 16 May, with analysts expecting an increase of 0.3%.
Retail Sales | US (16 May) US retail sales dropped 0.6% in March 2023, after falling 0.7% in February 2023. Analysts project a 0.7% increase for April 2023, with the data set to be published on 16 May.
Wage Price Index | Australia (17 May) Australia’s seasonally adjusted Wage Price Index jumped 3.3% year-on-year in Q4 2022, after an upwardly revised 3.2% growth in Q3 2022. Data for Q1 2023 will be released on 17 May, with analysts expecting another increase of 3.5%.
Employment Change | Australia (18 May) Australia’s employment rate increased to 13.88 million, with a surge of 53,000 in March 2023. The unemployment rate stood at 3.5%. The data for April 2023 is set to release on 18 May, with analysts expecting the employment rate to increase by 25,000. The unemployment rate is likely to remain at 3.5%.
Forex trading is a global market that operates 24 hours a day. And it is important to know the best times to trade in order to maximise your profits.
The Forex market can be divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session.
source: investopedia.com
The Forex market opens in New Zealand on Monday morning, while it is still Sunday in most parts of the world. The market operates continuously from Monday to Friday, and there are no formal closing times during the week.
As one region’s Forex market closes, another region’s market opens or is already open, resulting in overlapping trading periods, which are often the most active times in Forex trading.
Apart from weekends, there are only two public holidays when the Forex market remains closed worldwide: Christmas and New Year’s Day.
You should be aware that the opening hours of the Forex market may vary in March, April, October, and November due to different countries’ daylight savings schedules. This is an important consideration if you plan to trade during those times.
Traditionally, the Forex market has had three main trading sessions that traders tend to focus on instead of trading all day and night. This is referred to as the “Forex 3-session system”, which includes the Asian, European, and North American sessions, also known as Tokyo, London, and New York.
Tokyo session
The Tokyo session starts at 12:00 am GMT. Japan is the world’s third-largest Forex trading centre. During the Asian session, around 20% of all Forex trading volume occurs.
Economic data from Australia, New Zealand, China and Japan are released early in the session, and this could provide an excellent opportunity to trade news events.
The Tokyo session’s moves could set the tone for the rest of the day, and traders in later sessions often evaluate what strategies to take in other sessions
London session
London’s strategic location benefits from its time zone, as its morning overlaps with late trading in Asia, and its afternoon overlaps with New York City. 43% of all Forex transactions happen in London.
The London session is also known as the “European” trading session. Other major financial centres such as Geneva, Frankfurt, Zurich, Luxembourg, Paris, Hamburg, Edinburgh, and Amsterdam are also open during this time.
Most trends begin during the London session and continue until the beginning of the New York session.
Due to the high volume of transactions, the London session is typically the most volatile, making almost any pair tradable. However, sticking to the major pairs (EUR/USD, GBP/USD, USD/JPY, and USD/CHF) is generally best due to their tight spreads.
source: investopedia.com
New York Session
The US session begins at 8:00 am EST (12:00 pm GMT). New York is responsible for about 17% of all Forex transactions.
This session is also referred to as the “North American” trading session, as major financial centres like New York, Toronto and Chicago in North America are open at the same time.
Economic reports are usually released at the start of the New York session, with 85% of all trades involving the dollar. Hence, significant US economic data releases can move the market.
During the US and European markets’ simultaneous opening, abundant liquidity allows traders to virtually trade any pair. During the afternoon US session, volatility and liquidity tend to drop when European markets close.
According to the analytical reports, the most favourable trading time is around 10 am and 3 pm London time (10 am NY time) when there is optimal liquidity. This is the busiest time of day when traders from London and New York engage in trading, and it can be affected by news reports from the US, Canada, and Europe.
Additionally, this is the time when the WM/Refinitiv Spot Benchmark Rate is set, also known as the “London fix”. Banks and financial institutions use it as a reference point for daily currency exchange rates. For traders, there may be a surge in market activity before the fixing time that abruptly disappears exactly at the fixing time.
In general, it is recommended to trade in the middle of the week when the most action occurs. Fridays are generally busy until 04:00 pm GMT, and then the market becomes quiet until it closes at 9:00 pm GMT.
There are several ways to trade Forex, and each method has its own advantages and disadvantages.
The most popular financial instruments used in Forex trading include retail Forex, spot FX, currency futures, currency options, currency exchange-traded funds (or ETFs), Forex CFDs, and Forex spread betting.
Retail Forex is a way for individuals to participate in the Forex market through forex trading providers or brokers. These brokers trade on behalf of the retail traders in the primary OTC market by finding the best prices and adding a markup before displaying them on their trading platforms. Retail Forex trading involves trading contracts to deliver underlying currency rather than the currency itself.
Retail Forex trading is leveraged, meaning traders can control large amounts of currency with a small initial required margin. For example, with $2,000, traders can open a position valued at $100,000. However, this also means that traders can potentially lose more than their initial investment.
To avoid the physical delivery of currency, retail Forex brokers automatically “roll” client positions by entering into an equal but opposite transaction. This rolling process is known as Tomorrow-Next or “Tom-Next” and results in either interest being paid or earned by the trader, known as a swap or rollover fee.
Retail Forex trading is considered speculative, as traders are trying to profit from the movement of exchange rates without taking physical possession of the currencies they buy or sell. It is important for traders to understand the risks involved and to have a solid understanding of the market before participating in retail Forex trading.
Spot FX is an OTC market where customers trade directly with a counterparty. Unlike centralised markets, spot FX contracts are private agreements between two parties, and most trading is done through electronic trading networks or by telephone.
The primary market for FX is the interdealer market, which is dominated by banks and accessible only to institutions that trade in large quantities.
In the spot FX market, traders buy or sell contracts to make or take delivery of a currency at the current exchange rate. The price of currencies in the spot market is determined by several factors, such as current interest rates, economic performance, geopolitical sentiment, and price speculation.
The finalisation of a deal in the spot market is known as a spot deal, which is a bilateral transaction between two parties. A position in the spot market is settled in cash, but it takes two business days for the actual transaction to be settled.
Although the spot FX market operates 24 hours a day, it is not where retail traders trade.
Currency futures are contracts that allow traders to buy or sell a certain amount of currency at a set price and date in the future.
The contracts have standard details, such as the amount of currency, the date when the trade will happen, and the smallest price change allowed. The exchange makes sure that both sides of the trade are settled. Traders can buy or sell currency futures based on a fixed size and date at commodities markets.
The market is well-regulated, and you can easily get information about prices and trades. Currency futures are used by traders to protect against currency value changes or to predict future changes.
Currency options are financial agreements that give the holder the right, but not the obligation, to buy or sell a specific amount of currency at a fixed exchange rate or before a future date.
These options are available for trading on popular exchanges such as the Chicago Mercantile Exchange (CME), the International Securities Exchange (ISE), and the Philadelphia Stock Exchange (PHLX).
In general, currency options are commonly used to protect against unfavourable changes in exchange rates by corporations, individuals, and financial institutions. At the same time, traders can use currency options to speculate on currency movements.
Currency ETFs are managed investments in one or multiple currencies. They are created and managed by a financial institution and traded like a stock.
Currency ETFs serve various purposes: speculation, diversification, and hedging. But they come with macroeconomic risks like geopolitical risks and interest rate hikes.
Despite the limitations of trading, currency ETFs offer a convenient way to invest in the Forex market without the burden of managing investments.
Forex CFDs, also known as Contracts for Difference, are financial instruments that allow traders to speculate on whether the price of an underlying asset, like a currency pair, will rise or fall. When a trader enters into a CFD contract, they agree with a provider to exchange the difference in the value of the asset between the opening and closing of the trade.
Unlike traditional investments, CFD investors don’t actually own the underlying asset; instead, they receive revenue based on the price change of that asset.
The advantages of trading Forex CFDs include access to the underlying asset at a lower cost than buying it outright, ease of execution, and the ability to take both long and short positions.
source: babypips.com
Forex spread betting is a way to predict if a currency’s price will go up or down in the future without owning it. The price is based on the currency’s value in the FX market.
Spread betting providers allow this type of trading and consider three factors: the trade direction, the bet size, and the spread of the instrument traded.
One benefit of forex spread betting is that traders can use leverage to potentially make a larger profit from a smaller investment. However, if the market moves against you, you could lose more than your initial investment.
Each of these trading methods has its advantages and disadvantages, and traders should choose the method that best suits their trading style and risk tolerance.
When we want to talk about different types of currencies, we use three-letter symbols to represent them. The first two letters in the symbol tell us which country the currency comes from, and the third letter tells us the name of the currency. For example, USD stands for United States Dollar. These codes are called ISO 4217 Currency Codes.
The most actively traded currencies are the US Dollar (USD), Euro (EUR), Japanese Yen (JPY), British Pound (GBP), Australian Dollar (AUD), Swiss Franc (CHF), Canadian Dollar (CAD), and New Zealand Dollar (NZD). These currencies are often referred to as the “majors” and are traded in high volumes due to their liquidity and stability.
source: statista.com
The US Dollar plays a central role in the Forex market, with over 50% of the trades involving it.
The US Dollar is crucial in the global economy for several reasons. Firstly, it has the largest economy and most liquid financial markets globally, making it a powerhouse for international trade. Secondly, it is the primary global reserve currency and is used in half of all international loans and bonds and in cross-border transactions, including petrodollars. Lastly, the US’s stable political system and sole military superpower status make it a safe haven for investors.
It is important to understand that currencies are always traded in pairs. A currency pair is the exchange rate between two different currencies. For example, the EUR/USD currency pair represents the exchange rate between the Euro and the US Dollar.
There are three main categories of currency pairs: the “majors”, the “crosses”, and the “exotics”. The popularity of currency pairs can vary depending on market conditions, so it’s important for traders to stay informed about which pairs are currently in demand.
While there are eight major currencies, only seven major currency pairs exist. That is because US Dollar must always be present in the pair. This currency group involve EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, and NZD/USD. The last three pairs are also called commodity currency pairs. The “majors” are usually the easiest for beginners to trade.
The “crosses” are currency pairs that do not involve the US Dollar. Cross-currency pairs consist of two major currencies: the Euro and the Japanese Yen (EUR/JPY) or the British Pound and the Japanese Yen (GBP/JPY). Crosses are typically less liquid than the majors, but they can still provide opportunities for profitable trades.
The “exotics” are currency pairs that involve a major currency paired with a currency from an emerging or developing country. Exotic currency pairs are considered more volatile and less liquid than the majors and crosses. Examples of exotic pairs include the USD/MXN (US Dollar/Mexican Peso) and the USD/ZAR (US Dollar/South African Rand).
Understanding currency pairs is crucial for forex trading because buying one currency means simultaneously selling another. For example, if you buy the EUR/USD currency pair, you are essentially buying Euros and selling US Dollars. Trading currency pairs allows traders to speculate on the exchange rate between two currencies and potentially profit from the difference in price.
Forex speculation is the practice of buying and selling currency pairs in order to profit from the fluctuations in their exchange rates. Speculators aim to buy currencies when they are undervalued and sell them when they are overvalued, making a profit on the difference in the exchange rate.
Exchange rates are the values at which one currency can be exchanged for another. These rates are determined by the supply and demand of each currency in the market. When demand for a currency is high, its value increases, and when demand is low, its value decreases. Exchange rates are expressed as a ratio, such as 1.20 EUR/USD, which means that one euro is worth 1.20 US dollars.
There are several factors that can affect exchange rates, including:
Economic Factors: The state of a country’s economy can have a significant impact on its currency’s value. Factors such as inflation, interest rates, and economic growth can all affect exchange rates.
Political Factors: Political stability and government policies can also affect exchange rates. For example, a country with a stable government and sound economic policies may have a stronger currency than a country with political turmoil and uncertain economic policies.
Market Sentiment: The mood of the market can also influence exchange rates. If traders are optimistic about a currency’s prospects, its value may increase, while pessimistic sentiment can lead to a decline in value.
source: Bloomberg.com
Brexit is a prime example of how political events impact a nation’s currency exchange rate. The UK’s decision to leave the EU in 2016 resulted in uncertainty and instability, leading to a decline in the value of the British pound. Before the referendum, the pound traded at 1.50 USD, but after the decision, it fell to 1.30 USD. Prolonged negotiations between the UK and the EU added to the volatility, further weakening the pound against other currencies.
Understanding these basics of Forex trading is essential for anyone looking to enter the market. VT Markets provides its clients with daily market analysis to keep them up to date with the latest news and help make informed decisions about their investments.
Forex is a short term for “foreign exchange,” which means changing one currency to another.
Let’s say you’re travelling from France to the United States. You’ll need to change your euros to US dollars. When you go to the bank, you’ll see a big board with names of different currencies and numbers. This board shows exchange rates, which are the price of one currency compared to another. For instance, the exchange rate for €1 is $1.2.
source: canva.com
Suppose you exchange €1000 for $1200 before your trip. This means you participated in the Forex market.
However, when you’re on vacation, you’ll notice that the exchange rate has changed, and now €1 is worth less in US dollars than when you exchanged your money. As a result, your €1000 is now worth only $1100 instead of $1200. This means your euros can buy fewer things in the United States than you initially thought.
In the financial world, Forex traders aim to profit from the changes in exchange rates by buying and selling currencies at the right time.
The Forex market is the world’s largest and most liquid financial market. It is estimated that the daily trading volume of the Forex market has reached $7.5 trillion USD. To put this into perspective, the stock market in the United States has a daily trading volume of around $400 billion USD, which is just a fraction of the Forex market’s volume.
To help you visualise just how big the Forex market is, imagine the world’s largest shopping mall on Black Friday, with millions of people buying and selling goods all at once. Now, imagine that happening every single day, 24 hours a day, 5 days a week, all over the world. That’s how big the Forex market is.
To facilitate trading around the clock, the Forex market has several financial centres located in different parts of the world, including New York, London, Tokyo, and Sydney. Each financial centre has its opening and closing hours, which overlap to create a continuous trading session.
For example, when it’s morning in New York, and the Forex market opens, it’s already afternoon in London, where the market is already open. This overlap in market hours allows traders to trade in multiple markets simultaneously and take advantage of the increased liquidity and volatility.
source: Image courtesy of independent brokerage
Forex plays a crucial role in facilitating international trade and investment by allowing businesses and individuals to exchange one currency for another. Without Forex trading, it would be difficult to conduct international transactions, as businesses and individuals would have to rely on their own country’s currency.
The forex market is decentralised, meaning that it does not have a central location like the New York Stock Exchange or the London Stock Exchange. Instead, it operates through a global network of big commercial banks, central banks, multinational corporations, investors, hedge funds, and individual traders who buy and sell currencies electronically.
Commercial banks are the biggest players in the Forex market. They trade currencies for lots of different clients, such as other banks, big companies, and people who want to exchange money for their travels. When they trade currencies, they help to set the prices for all the other traders in the market. The big players that significantly influence the market are called market makers.
The Forex market operates through two main channels: the interbank market and the over-the-counter (OTC) market.
source: investopedia.com
The interbank market is where banks and financial institutions trade currencies with each other, acting as both buyers and sellers. For example, if a bank needs to exchange US dollars for euros, it will turn to the interbank market to find another bank willing to sell euros and buy US dollars.
On the other hand, the OTC market is where trades are conducted directly between two parties without using a centralized exchange or clearinghouse. For example, if you’re travelling to another country and need to exchange your currency for the local currency, you might go to a currency exchange booth at the airport. The currency exchange booth acts as an OTC market maker, buying your currency from you and selling you the local currency at a markup.
Forex brokers like VT Markets play a crucial role in the Forex market by providing a platform for traders to buy and sell currency pairs. They act as intermediaries between traders and the market, executing trades on behalf of their clients.
As a broker’s client, you have the opportunity to earn profits by speculating on the movement of currency pairs. Brokers also offer various tools and resources to help traders make informed decisions, such as market analysis, educational materials, and trading signals.
Choosing a reputable and regulated broker is important, as the Forex market is known for its volatility and potential risks. However, with the right knowledge and strategy, trading Forex can be a lucrative opportunity for those willing to put in the effort to learn and practice.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com
The Non-Farm Payroll (NFP) report is a monthly economic release that provides insight into the employment situation in the United States. It is a highly significant economic indicator and is widely used by investors, traders, and policymakers to evaluate the health of the U.S. economy.
Impact of Nonfarm Payroll on the Foreign Exchange Market
The NFP report can significantly impact the foreign exchange (Forex) market. If the report shows more jobs added than expected, it can indicate a strong economy, leading to an increase in the value of the U.S. dollar. Conversely, if the report indicates fewer jobs added than expected, it can signal a weak economy and lead to a decrease in the value of the U.S. dollar.
Non-Farm Payroll Report Employment Change
The NFP employment change measures the number of jobs added or lost in the U.S. economy, excluding the farming industry. It is issued on the first Friday of each month by the U.S. Bureau of Labor Statistics and is based on data collected in the previous month.
How to read the Non-Farm Payroll Report
While the NFP report can be complex, it offers valuable insights to investors and traders. It includes critical data such as the unemployment rate, the number of jobs added or lost, and the average hourly earnings. Investors and traders analyze this information to assess the economy’s health and make investment decisions.
Where to find the Non-Farm Payroll Report
The NFP report, released on the first Friday of every month at 8:30 a.m. Eastern Time (ET), can cause significant volatility in financial markets.
It is available on the website of the U.S. Bureau of Labor Statistics, as well as various financial news outlets and online platforms. Monitoring the NFP, along with other economic indicators, allows investors, traders, and policymakers to gain insights into the health of the U.S. economy and make informed decisions. Thus, comprehending the Non-Farm Payroll report is crucial for making better investment decisions.
Gross Domestic Product (GDP) is a measure of the economic activity of a country. It is the total monetary value of all the goods and services produced within a country’s borders in a specific period, usually a year. GDP is often used as an indicator of a country’s economic health and overall standard of living.
Understanding Gross Domestic Product (GDP)
GDP is an important measure of a country’s economic activity. It provides a snapshot of a country’s economy at a specific point in time. It is important to understand that GDP is not a measure of a country’s wealth or standard of living, but rather a measure of its economic activity. It is calculated by adding up the total value of all goods and services produced within a country’s borders, including exports and imports.
Types of Gross Domestic Product
Nominal GDP
Nominal GDP is the total value of all goods and services produced within a country’s borders at current market prices. Nominal GDP does not consider the effects of inflation or deflation on the economy.
Real GDP
Real GDP is the total value of all goods and services produced within a country’s borders adjusted for inflation or deflation. Real GDP is often used as a measure of a country’s economic growth, as it considers changes in the price level.
GDP Per Capita
GDP per capita is the total GDP of a country divided by its population. This measure is often used to compare the economic activity of different countries.
GDP Growth Rate
GDP growth rate is the percentage change in a country’s GDP from one period to another. It is often used to measure the health and growth of a country’s economy.
GDP Purchasing Power Parity (PPP)
GDP purchasing power parity (PPP) considers the differences in the cost of living between countries. It adjusts for differences in the prices of goods and services between countries to provide a more accurate measure of economic activity.
GDP Formula
The formula for calculating GDP is:
GDP = C + I + G + (X-M)
Where:
C = Personal consumption expenditures
I = Gross private domestic investment
G = Government consumption expenditures and gross investment
X = Exports of goods and services
M = Imports of goods and services
How to Use GDP Data and where to find them
GDP data is useful for analyzing a country’s economic activity and identifying trends in specific industries or sectors. It can be used to compare the economic activity of different countries and to determine if an economy is growing or contracting.
Policymakers, investors, and economists often use GDP data to make informed decisions and to gain insights into the health of the economy.
A high Gross Domestic Product (GDP) generally indicates a strong and growing economy. It means that the country is producing more goods and services, creating more job opportunities, and generating higher incomes. A high GDP can also attract foreign investments, which can further boost economic growth. Additionally, a high GDP can provide the government with more resources to invest in public goods and services, such as infrastructure, education, and healthcare.
However, a high GDP alone does not necessarily equate to a better quality of life for all citizens, as income inequality and other social issues can persist. Therefore, while a high GDP can bring many benefits, it should not be the only measure of a country’s overall well-being.
The Federal Reserve (Fed) sets the interest rates that banks charge each other for short-term loans, known as the federal funds rate. The federal funds rate is the benchmark for other interest rates, such as mortgage rates, credit card rates, and car loan rates. The Fed has two primary tools for controlling interest rates: open market operations and the discount rate. Open market operations involve buying and selling Treasury securities in the open market to influence the supply of money in the economy. The discount rate is the rate at which banks can borrow money directly from the Federal Reserve.
5 ways Federal Interest Rates affect your money
Interest rates have a significant impact on the economy, and changes in interest rates can affect consumers in many ways:
Mortgages: When the Federal Reserve raises interest rates, mortgage rates tend to increase, which can make it more difficult for people to buy homes.
Credit Cards: Credit card companies typically charge variable interest rates, which are often tied to the prime rate. When the Federal Reserve raises interest rates, the prime rate increases, and credit card rates follow.
Car Loans: When interest rates rise, car loan rates tend to follow. This can make it more expensive to finance a car.
Savings Accounts: When interest rates rise, savings account rates tend to increase as well. This can be good news for savers, as they can earn more interest on their savings.
Inflation: The Federal Reserve raises interest rates to combat inflation. When inflation is high, interest rates tend to be high as well. High interest rates can help keep inflation under control, but they can also make it more expensive for consumers to borrow money.
Why is the Federal Interest Rates important
The Federal Reserve sets interest rates to achieve its dual mandate of price stability and maximum employment. The Fed raises interest rates to slow down inflation and lower interest rates to stimulate the economy. The Federal Reserve also uses interest rates to manage the money supply in the economy. By increasing or decreasing the money supply, the Fed can affect the overall level of economic activity.
Interest rates also play a critical role in financial markets. Changes in interest rates can affect the prices of stocks, bonds, and other financial assets. For example, when interest rates rise, the prices of bonds tend to fall, and when interest rates fall, the prices of bonds tend to rise.
What makes the Federal Reserve (Fed) change Interest Rates
The Federal Reserve changes interest rates based on its assessment of the economy’s performance. The Fed’s policymaking body, the Federal Open Market Committee (FOMC), meets regularly to assess economic conditions and determine whether to raise, lower or maintain interest rates. The FOMC considers a range of economic indicators, including inflation, unemployment, and economic growth, when making its decisions.
In general, the Federal Reserve raises interest rates when it wants to slow down inflation, and it lowers interest rates when it wants to stimulate economic growth. The Fed may also change interest rates in response to external factors such as changes in the global economy or financial market instability.
Where can you find the Federal Interest Rates
The Federal Reserve releases information about interest rates through its website and other public channels. The Federal Reserve publishes the minutes of the FOMC meetings, which provide insight into the committee’s thinking and decisions.
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