United States Core CPI m/m April 13 2021 - futures io
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United States Core CPI m/m April 13 2021


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United States Core CPI m/m April 13 2021

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  #1 (permalink)
 JamesThatcher   is a Vendor
 
 
Posts: 11 since Apr 2021
Thanks: 1 given, 7 received

What does the data mean to the market?

The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

A higher than expected number is positive/bullish for the USD, a lower than expected number is negative/bearish for the USD.

There are 4 lines of data.

Headline CPI - Core (M/M)
CPI - Core (Y/Y)
CPI - (M/M)
CPI - (Y/Y)


Historic Deviations and Their Outcome

March 10 2021 We got a +0.1 on both core lines gave a nice 15 pip move on USDJPY ; that's a really nice move for such a small deviation, shows how hot this data is becoming.


February 10 2021 Check out last months 0.2 deviations, and bear in mind that I expect the same deviations to create a better reaction today!
We can see a small but gradual move over the first one minute.



November 12 2020 Most of last year, the same deviations were not moving the market, as conditions were very different then, but I believe the focus is back.





My Forecasts For Today

CPI - Core (M/M) 0.2
CPI - Core (Y/Y) 1.5
CPI (M/M) 0.5
CPI (Y/Y) 2.5



Today's Trade Plan

The focus is on CPI - Core (M/M) - Headline.

Iím looking for a Deviation of 0.2% or greater in either direction from the forecast of 0.2% to take a trade.

So, an actual figure of 0.0% to Sell USD or 0.4% to Buy USD.

We would need to confirm no conflict on any of the other three lines!

CPI - Core (Y/Y)
CPI - (M/M)
CPI - (Y/Y)

If they all lineup, we should bank some good pips today.


Tradable Pairs

USDJPY


Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

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  #2 (permalink)
 Schnook 
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Well the numbers all came within a smaller deviation and the market's reaction both in yen and bonds suggests that traders were well prepared for such an event. Now seeing a bit of a relief rally.

Thanks for posting the above, but I'm also curious how you approach data releases like this, given the speed with which market making algorithms react to these events. A 15 pip move, as described above, can easily happen before a human brain is even able to process the move. So do you place stop-order entries on either side of the market to try to enter a directional move as quickly as possible? Or do you evaluate the data with your own brain and then manually trade (or not trade) using your own discretion after the algos have already done their thing?

And now that the dollar has weakened after a firmer CPI print, are you fading? Has the relief bounce run its course or do you think there's more room to squeeze?

I've been leaning bearish on Treasuries (a somewhat correlated position to JPY) into this week's supply but had my trailing stops tagged on this morning's bounce so thinking about whether to re-enter some shorts before the bond auction. Keeping eyes fixed on Yen and other related markets here as well

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 JamesThatcher   is a Vendor
 
 
Posts: 11 since Apr 2021
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Schnook View Post
Well the numbers all came within a smaller deviation and the market's reaction both in yen and bonds suggests that traders were well prepared for such an event. Now seeing a bit of a relief rally.

Thanks for posting the above, but I'm also curious how you approach data releases like this, given the speed with which market making algorithms react to these events. A 15 pip move, as described above, can easily happen before a human brain is even able to process the move. So do you place stop-order entries on either side of the market to try to enter a directional move as quickly as possible? Or do you evaluate the data with your own brain and then manually trade (or not trade) using your own discretion after the algos have already done their thing?

And now that the dollar has weakened after a firmer CPI print, are you fading? Has the relief bounce run its course or do you think there's more room to squeeze?

I've been leaning bearish on Treasuries (a somewhat correlated position to JPY) into this week's supply but had my trailing stops tagged on this morning's bounce so thinking about whether to re-enter some shorts before the bond auction. Keeping eyes fixed on Yen and other related markets here as well

Thanks for your comments. I work to reply to every comment, each on its merit, so forgive the delayed response.

You are correct; algorithms that get the news and make a trade decision quicker than the human brain can read the numbers do exist. I am also using my bespoke software with multiple news feeds, which is tried and tested and does the job in record time. My trade plans always look for a set-up that will provide a continued price action after the initial spike. An auto clicker would suffice for entry, although this adds risk unless you are using slippage control. It's possible to take a manual entry after the initial release with the numbers I put out on my trade analysis. Usually, within the first minute, the price will pull back and allow anyone to get in at a reasonable price. Even if you end up at the end of the initial spike, the move should continue. My advice would be to get yourself into a break-even situation asap.

I solely do news trading; it's what I've spent the last ten years perfecting. I don't keep my trades open for longer than a few minutes; I like to catch the initial move and cash out.

There's almost always consolidation after a significant news event before the market decides on a longer-term position. By the time this happens, I've usually shut down my PC, relishing some time with my family or walking my dog.

You are correct. Correlations between FX, bonds, futures, treasuries, indices are present. However, trading medium or long term is not my thing. I only look to trade something if the news moves it, has good leverage and an excellent historical success rate. This has worked well for me. I have earned a decent full-time living from this strategy for many years now. Could you have a look at my results in April? I only took three trades; two resulted in a win, one resulted in a loss. This ratio was enough to make it a profitable month, and I'm happy with that.

Thanks again for your comments and interest. If you want to know more about me or my trading system, please contact me directly.

James Thatcher

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