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NO Core Inflation [m/m]
Inflation rate in the country. Most of all, the market reacts to the core inflation indicator in monthly terms: NO CoreInflation [m/m]. It has a good potential of the market reaction at the time of publication, but the exotic pair EURNOK can show a significant increase in the spread at this time.
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How to trade NO Core Inflation [m/m]
If NO Core Inflation [m/m] grows above forecasts, then the trading pair EURNOK will fall. Since the price of NOK will be strengthened in this case, the Euro will fall against it accordingly.
The indicator is traded quite well, despite the fact that traders are initially afraid of the spread of the trading pair EURNOK or USDNOK. If you try to handle this, it becomes clear that practically all brokers have an extra decimal place for this pair, and in fact the spread is standard like in more familiar and popular instruments.
The only thing to be afraid of is the low liquidity of EURNOK, as its trading volume is far behind the popular EUR or USD. In this regard, at the time of special attention, at the time of publication of news, the spread can expand, and your order can slip. It is for this reason that we always recommend using higher triggers for this indicator.
Also, as a rule, together with this indicator, a package of additional statistics on inflation in Norway is necessarily published, and the largest market movements are observed when all indicators indicate “one way”, all data is unidirectional:
- NO CPI (M/M)
- NO CPI (Y/Y)
- NO CPI – Underlying Core (M/M)
- NO CPI – Underlying Core (Y/Y)
Also, less important data can be published simultaneously, such as:
- NO PPI - incl oil (M/M)
- NO PPI - incl oil (Y/Y)
The key to success is that you follow the main indicator, which we trade NO CPI – Underlying Core (M/M), as well as the same indicator but only in its annual expression NO CPI – Underlying Core (Y/Y). If both indicators have a directional (one way) deviation of the fact of the news from its forecast, then the primary movement may continue more than the primary reaction, and vice versa, if NO CPI – Underlying Core (Y/Y) does not support the release of its colleague, the movement can quickly stop.
Note that, as a rule, NO CPI – Underlying Core (M/M) is published first (we use it for trading), and NO CPI – Underlying Core (Y/Y) comes out second.
It is worth remembering that the trading is conducted under the exotic instrument, and therefore, it is worthwhile to closely monitor the sharp movements of the pair until publication. As soon as you see sharp, abnormal fluctuations of the rate some minutes before publication, think maybe it is worth refraining from trading.
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