US CORE CPI

NEWS TRADING

Friday March 16, 2012

[8:30am NY Time]
We´ll be trading US Core CPI m/m release tomorrow. CPI or
Consumer Price Index, also known as the "true cost of
living", is what drives Central Banks to raise/cut interest
rate, therefore this release will be widely watched. Here´s
the forecast for the CPI:

8:30am (NY Time) US Core CPI m/m
Forecast 0.2% Previous 0.2%
ACTION: 0.4% BUY USDCHF

DEFINITION:“CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households wikipedia).” It is also known as the “True Cost of Living”.

THE TRADE Plan
Our minimum tradable deviation for this release is 0.2%; if the release number (core) increases to a minimum 0.4% then we will BUY USD/CHF. If the CPI number decreases to 0.0% or less, we´ll stay out of the market as the current market is pro USD. Historically even at a difference of 0.1%, market is likely to exaggerate its move, therefore if either of our tradable releases is hit, there is about 80% of chance market will move 50 pips within the next 90 minutes or so.