Today, financial markets no longer dance
solely to the rhythm of macroeconomic data releases. Instead, they often lurch
or rally in response to an offhand remark from a political leader or an abrupt
policy tweet. Nowhere is this more evident than in recent weeks, where
headlines—not spreadsheets—have dominated market momentum. Traditional
indicators like inflation figures or Purchasing Managers Indices (PMIs) still
carry weight, but traders should also read between the headlines and act on the
fly. Octa Broker provides examples of how news affects the market and what
events are worth monitoring.
The Historical
Impact of News on Markets
Market-shocking news is nothing new. Arguably,
one of the most infamous examples occurred on 15 January 2015, when the Swiss
National Bank unexpectedly eliminated its currency ceiling against the euro.
Within seconds, the EUR/CHF pair plummeted
by nearly 30%, wiping billions from the forex markets and sending
shockwaves around global financial institutions.
This historical context matters. It
reminds that both scheduled and unscheduled news can have outsized impacts on
market pricing, especially when market participants are caught off guard.
Scheduled vs.
Unscheduled News Events
Scheduled news events, by their nature,
offer predictability. Reports such as the Consumer Price Index (CPI), labour
market data, PMIs, and central bank meetings are calendar fixtures. Their
importance, however, varies depending on the issuing country.
The United States is a leader in terms of
influence. As the issuer of the global reserve currency, U.S. economic data has
global ramifications. An example is the U.S. CPI reading, which not only shifts
USD pairs but, often, equity indexes and commodities. The Bureau of Labor
Statistics releases these reports
monthly.
PMI reports, often early indicators of
economic health, are published by S&P Global on a harmonised schedule
across major economies. Central bank meeting dates, while known in advance,
still generate high volatility due to surprise rate decisions or hawkish/dovish
commentary. Federal Reserve (Fed) meetings can be tracked here, and the European Central Bank’s (ECB)
schedule is also available on the institution’s website.
In contrast, unscheduled news events are
unpredictable and often far more dramatic in terms of market impact. These
include geopolitical tensions, unexpected policy announcements, or political
rhetoric. On 1 February 2025, President Trump’s sudden announcement of comprehensive tariffs
on Canadian imports pushed USD/CAD to record multi-decade highs.
The Surge of
Unscheduled News in Recent Times
April 2025 exemplified how chaotic
unscheduled news can become. In early
April, shifting U.S. tariff policies caused sharp moves in equity markets. Major indices
dropped into correction territory but later recovered after revised statements.
Then, in early May, mixed job data added to the uncertainty,
offering little clarity on what to expect next.
Current News
Events Influencing the Markets
Several unscheduled narratives are
currently steering sentiment:
●
Trade negotiations between the
U.S. and China are ongoing, with some progress achieved, but uncertainty
continues to linger as to whether an acceptable and long-lasting agreement can
be achieved within a 90-day deadline.
●
President Trump’s public critique of Fed Chair Jerome Powell
continues to inject uncertainty into the monetary policy outlook.
●
Meanwhile, the U.S. remains
involved—albeit hesitantly—in peace talks between
Ukraine and Russia.
●
Trade discussions with Japan have
also become strained, with little progress reported thus far.
Strategies for
Traders During High-Volatility News Cycles
In this news-saturated environment,
adaptability is key. Traders can navigate volatility with the following
strategies:
●
Use smaller position sizes to
limit exposure.
●
Apply tighter stop-loss orders to
protect against sudden swings.
●
Opt for short-term trades to
reduce the risk of overnight event surprises.
●
Avoid overly volatile assets
unless accompanied by clear signals or hedges.
Kar Yong Ang, a financial market analyst at
Octa Broker, notes: ‘With news-driven and
unexpected volatilities driving trading in our current setting, traders must
become more reactive and less anticipatory in their strategies. Do not try to
front-run and second-guess the outcome of this or that event. Instead, wait for
the dust to settle and then enter the market. Position sizing should reflect
the current volatility regime, ideally calculated through dynamic risk metrics
like ATR (Average True Range). Most importantly, traders should maintain a
structured news-monitoring routine and understand the second-order effects of
headlines—for example, how a tariff announcement may ripple through
commodities, currencies, and interest rate expectations simultaneously.’
About Octa
Scheduled economic releases still matter,
but unscheduled news—particularly in the current politically charged global
climate—has emerged as the primary driver of market sentiment. The line between
economic and political news continues to blur, and with it, the predictability
of price action. For traders, this means one thing above all: stay flexible,
stay informed, and adjust strategies to match the new reality.
Compliance
reminder: trading
Contracts for Difference (CFDs) carries a high level of risk and may not be
suitable for all investors. Emotional trading can increase this risk. Always
trade within your means and understand the risks involved.
Octa is an international broker that has been providing online
trading services worldwide since 2011. It offers commission-free access to
financial markets and various services used by clients from 180 countries who
have opened more than 52 million trading accounts. To help its clients reach
their investment goals, Octa offers free educational webinars, articles, and
analytical tools.
The company is involved in a
comprehensive network of charitable and humanitarian initiatives, including the
improvement of educational infrastructure and short-notice relief projects
supporting local communities.
Since its foundation, Octa has won
more than 100 awards, including the ‘Most Reliable Broker Global 2024’ award
from Global Forex Awards and the ‘Best Mobile Trading Platform 2024’ award from
Global Brand Magazine.
