forex-scalping.com

The Beige Book is a summary of economic conditions across the twelve Federal Reserve districts, published eight times a year, two weeks before each FOMC meeting.

What it contains:

• Anecdotal reports from businesses and contacts in each district.
• Comments on employment, wages, prices and activity.
• A national summary.

Market impact:

• Usually small, because it contains no new hard data.
• It can matter when the market is uncertain about direction and the Beige Book's tone is clearly different from recent data.
• Phrases about wage pressure or slowing activity are sometimes quoted widely.

For short-term traders, the release at 14:00 New York is mostly a low-impact event. For longer-term views, the Beige Book helps understand what Fed officials are hearing before the meeting.

Do you read the Beige Book, and has it ever changed your view of the dollar?

For intraday work I mostly treat it as a 14:00 New York event to stay out of rather than one to trade. The first few minutes on EURUSD tend to be thin, and spreads can open up even when nothing in the text surprises anyone.

Where I have seen it matter is the wording on labour. A run of districts describing hiring as flat or softening lands differently when the last payrolls print was strong, because it hands the doves something to quote.

The move rarely comes at release time. More often it shows up the next morning, when Fed speakers or the press start repeating a phrase and the dollar drifts in line.

One habit I have kept is counting districts. If the number reporting slight or modest growth drops from eight to five between editions, I pay attention even if the national summary sounds calm.

Do you find it matters more when the following meeting is priced close to a coin flip? That is the only setting where I have seen it push USDJPY more than 20 pips on the day.