Fundamental Analysis and Central Bank Resources

Fundamental analysis can be daunting, but this is what drives the market. I don’t care how many doji’s or buy signals Deutche Bank saw on the eve of the Russian Debt default. I guarantee they where glued to International news stations not there computer’s technical chart analyzers. That being said, where do traders locate news events that move the market? DailyFX has a great economic calendar to show you what events are coming up and what the numbers are. These numbers move the market and each event is marketed with a simplistic high, medium, low rating as to whether or not traders place trades regarding the outcome

The Fed, the ECB, and the Swiss National Bank (SNB) all have websites. Google them and you won’t be disappointed. I must admit like all things European the ECB and SNB website’s are aesthetically pleasing, but they both hold a plethora of information. The information on these site’s can give you crucial information, easily access statistics and other information that will help you make informed currency trades. The Fed website on the other hand is a lot like the mid-west, boring but full of endless bounty. There is no window dressing and it gives you links to libraries of statistics complied by the (BEA) the bureau of economic analysis. There are the minutes from each FOMC meeting and statements made by Fed Governor’s regarding the feds directives.

All the sites have a mission statement of each central bank, while the Fed’s is more fluid and allows the Governors to tailor monetary policy to each situation. The ECB in stark contrast state in the second sentence of there mission statement underline that they will ensure price stability at all costs. The SNB otherwise known as the central banker’s central bank have objectives are a hybrid like the Fed, they acknowledge that price stability is key but other developments may prevent the feasibility of this objective. Basically the SNB and the Fed are free to conduct responsible monetary policy at their discretion. While the ECB’s independence is mandated by the Maastricht treaty they are treated like children when it comes to monetary policy. Germany made this a pre requisite for signing the treaty because they feared the monetary irresponsibility of there Southern brethren notably Italy and Spain. The ECB must keep inflation below 2%, good luck in the coming years. Good for traders to know because over the last year the Euro has killed the dollar. I’m not going to give you a homework assignment that will benefit you in your trading but if I’m placing money on the Euro, US dollar, or Swiss franc then I’d want to have an intimate relationship with their central banks.