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Important ISM services release Friday🚨

Posted: 3rd March 2023

Good morning and welcome to episode 798 of ‘Talking Bull’. Here are the latest headlines today, Core Euro-Zone inflation hits fresh record high, Stronger increase in US labour costs, Hawkish Fed rhetoric continues, US yields move higher, BoE watching wages, Some resilience in equities, Dollar index below 8-week highs & Important ISM services release Friday.

We take a technical look at key markets that are likely to be impacted by today’s events. Also, we participate in a ‘Gun to the head’ challenge where each of us calls a live trade. These will expire at 9pm tonight and we will keep track of the progress over time.

We hope you enjoy it!

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Show notes:

Joe and Steve were stopped out on CHFJPY and Silver.

We have included an illustration based on a £1000 account. This will follow the combined return of our morning trades by risking 1% of the trading capital per trade. The 1% risk is a variable monetary amount and will rise and fall based on the success of the calls.

We are currently up 200.83% collectively since we began recording Talking Bull on the 30th October 2019.


Core Euro-Zone inflation hits fresh record high

Euro-Zone consumer prices increased 0.8% for February with the headline inflation rate declining to 8.5% from 8.6%, but this was significantly above consensus forecasts of 8.2%.

The underlying inflation rate increased to a record high of 5.6% from 5.3% and above market expectations of 5.3%.

Markets moved to price in a peak rate of 4.00%.

Stronger increase in US labour costs

Revised data on unit labour costs recorded a 3.2% increase for the fourth quarter of 2022 with a 6.3% annual increase in costs. The increase in labour costs was much higher than for the original estimate which has recorded an increase of 1.1% and annual increase of 4.5%.

The higher rate of increase in labour costs reinforced fears that the Federal Reserve would have to tighten policy further to bring inflation under control.

Hawkish Fed rhetoric continues

Fed Governor Waller stated that the central bank may need to raise rates beyond the December 5.1-5.4% view and that progress on inflation had been slower than expected, although he added that there some reasons for hope with a sharp deceleration in rent increases.

US yields move higher

Treasuries lost further ground after the US data with further concerns over underlying inflation pressures.

The 10-year yield increased to fresh 3-month highs around 4.08% before a limited retreat to 4.04% on Friday.

BoE watching wages

According to Bank of England chief economist Pill, the evidence suggests that the economy has been slightly stronger than expected and the pace of wage settlements was also slightly stronger than expected, but he also commented that some high-frequency indicators of wages had fallen quite sharply recently.

Some resilience in equities

Wall Street indices managed to make limited gains on Thursday despite inflation and Fed fears. Asian bourses also made headway with China releasing another positive report with a stronger rebound in the Caixin PMI non-manufacturing index.

Dollar index below 8-week highs

The dollar posted gains on Thursday, but was held just below 8-week highs and edged lower on Friday as equities managed to post gains and defensive demand faded slightly.

Important ISM services release Friday

The latest US ISM services data will be released on Friday. This will be a key piece evidence on conditions in the non-manufacturing sector.

Consensus forecasts are for a headline reading of 54.5 from 55.2 previously.

The prices and employment data will also be very important within the release.

Data Today

15.00: US ISM index non-manufacturing.

Key events over the next week

March 7th: Reserve Bank of Australia policy decision.

March 7th: Fed Chair Powell testimony

March 8th: Bank of Canada rate decision

March 10th: Bank of Japan policy decision

March 10th: US employment report

March 10th: Canada employment report

Gun to head challenge – Update


Today’s trade idea








Have a great week everyone.

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