Saturday, 20 April 2019

Week to Apr 19th


Mixed first week of Earnings Season, Healthcare and European manufacturing stumbles


Mon Apr 15
The euphoria following Friday’s JPM beat was tamed today with a revenue miss by GS. US markets dipped but recovered to end the day flat. The situation was better elsewhere with NKY and the European indices making small advances. USD advanced only very slightly (DXY +0.09%) mainly due to a CAD fade after the weak BoC Business Survey. Other currencies were largely flat, as were yields. Gold and Oil slipped slightly in line with the dollar.

Tuesday April 16
The pre-bell earnings were better today, with comfortable beats from heavyweights BAC, JNJ and UNH, although the latter immediately fell again, on concern about the Democrat plan (if elected in 2020) for universal healthcare. The overall effect on SPX, after an initial rally was another flat day, whilst once again non-US indices advanced.

USD continued to gently fade up (DXY+0.13%), as EUR and GBP faded after mixed German sentiment (0900) and the UK claimant count miss (0830). AUD fell sharply on the dovish RBA minutes (0130), but caught a bid as the US awoke, and recovered equally fast. CAD was up, as was Oil after the API stock report beat at 2030.

The surprise mover was Gold, dropping 0.9% to a new 2019 low, after reports that some ECB policymakers are pessimistic about economic projections, reducing the need for safe-haven bullion. Similarly, US yields were substantially up 6bp (bonds are also a safe haven).

Wednesday April 17
Despite early hopes from the Chinese GDP beat at 0200, the UNH rout spooked the markets today as the stock broke through April and Feb 18 support to an 18-month low dragging DJIA down, and pushing XLV into the red for 2019. This is despite NDX briefly (for 5 minutes at the open!) made a new ATH. NKY and FTSE followed suit (the latter into the next day), but DAX was immune to all this and carried on rising.

Another quiet day for the dollar (DXY +0.06%) saw a small recovery in EUR balanced by move down in JPY. CAD briefly spiked up on the CPI beat at 1230, but quickly gave this up and also ended down. Gold continued to make new lows, and Oil gave up some of Tuesdays gains despite the EIA beat at 1430. Yields were flat on the day.

Thursday April 18
A strong beat on US Retail Sales at 1230, gave the OpEx day before the Easter break a boost and after stuttering early, markets US rose to recover some of Wednesday’s losses. Other world markets followed suit.  In forex, EUR fell hard after the crucial German (0830) and Eurozone (0900) Manufacturing PMIs both missed, the single currency losing 0.54% in two spikes down. Most currencies (and Gold) also fell, giving DXY (+0.43%) its best day of the week. Surprisingly, yields fell again to return to Tuesday’s lows.

Friday April 19
World equity and bond markets were closed for Good Friday. Forex was traded but was extremely muted, with a very slight dollar softening (except for CAD, which was down).


WEEKLY PRICE MOVEMENT
Indices were fairly flat again this week, with DAX the best performer up 1.85%. The weakest forex pair week was NZDJPY down 1.24%. NFLX was the top FANG after its losses last week, and cryptos rallied again, but more modestly than they have done in the past.


Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on UUP. The equity and index prices are now based on the cash close each day.


NEXT WEEK (all times are GMT)
(Calendar High volatility items are in bold)

  • Rate decisions in Japan and China
  • Large weight of Dow and NDX reporting
  • Preliminary US GDP and PCE for Q1
  • Another four-day (or less) week in Europe

Monday April 22
A quiet day on news. Markets are closed in Europe and Australia/New Zealand for Easter Monday.

12:30 USD Chicago Fed National Activity Index 
14:00 USD Existing Home Sales (MoM)

Tuesday April 23
Before the bell we have volatile TWTR and three DJIA defensives KO, PG, and UTX, the latter comprising 7.4% of the index, but little in scheduled news. Markets are closed in Turkey.

13:00 USD Housing Price Index (MoM)
14:00 USD New Home Sales (MoM)
20:30 WTI API Oil Stock

Wednesday April 24
Before the bell, we have earnings from BA, CAT and V, adding up to 17.5% of DJIA, the largest concentration this season, whereas afterwards 16% of NDX reports in the form of FB, TSLA and MSFT. The main scheduled event is the Canadian rate decision, or more specifically, the statement.

00:30 AUD Australia CPI (RBA Mean QoQ est 0.4% lunch.)
04:30 JPY Japan All Industry Activity Index (MoM)
05:00 JPY Japan Leading Economic Index
08:00 EUR Germany IFO Business Sentiment
08:00 EUR Eurozone Economic Bulletin
08:30 GBP UK PSBR
14:00 CAD BoC Rate Decision (1.75% hold e)
14:30 WTI EIA Oil Stock

Thursday April 25
Only one DJIA stock, MMM (5.9% weight) reports before the bell. The action is at the end of the day with giants AMZN and INTC, which with SBUX make up 14% of NDX. It’s odd that SBUX is in the ‘Tech’ 100, but so is inter alia PEP, WBA, and KHC. There are rate decisions on TRY, IDR and UAH. Markets are closed in Australia/New Zealand for ANZAC Day, and also in Portugal and Italy.

02:00 JPY BoJ Rate Decision (-0.1% hold e)
06:00 JPY BoJ Presser
06:00 EUR Germany Gfk Consumer Confidence Survey
12:30 USD US Jobless Claims
12:30 USD Durable/Capital Goods (CG e 0.1% p -0.1%)
22:45 NZD NZ Imp/Exp/TB
23:30 JPY Japan Jobs-Applicants/Unemployment
23:50 JPY Tokyo CPI (e 1.1% unch.)
23:50 JPY Japan Ind. Production/Retail Trade

Friday April 26
The preliminary GDP and PCE reports for Q1 are clearly the most important release today. Oil giants XOM and CVX report before the bell. There are rate decisions on RUB, SGD and COP. Markets are closed in Romania.

12:30 USD US GDP/PCE 19Q1 Prelim. (GDP YoY e 1.8% p 2.2%)
14:00 USD US Michigan CSI
17:00 WTI Baker Hughes Rig Count

This week I was involved the preparation of a video for my colleague Ed Matts forthcoming webinar next Thursday. You can see it here and sign up for the presentation here.

This report is published every week as an email by MatrixTrade.com - you can sign up to receive it here. This blog is supported solely by advertising, so if any of the ads interest you, please click on them. If you want notification when the blog is updated, please follow me on TwitterFacebookStocktwitsTradingView or Linkedin (all open in separate windows). Details of how I compile the report are here

Sunday, 14 April 2019

Week to Apr 12th



EU grant further Brexit delay, No ECB or Fed surprises, Strong start to earnings season

Mon Apr 08
Last week’s equity rally ran out of steam, and in the absence of important news, equity markets drifted. DAX was slightly down, other markets slightly up. The dollar was firmly down (DXY -0.31%) after two weeks of gains, and all currencies (and Gold) were up with a particularly strong showing from CAD, tracking Oil, which was up nearly 2% on concerns about Libyan politics and conflict.

It is pleasing to see the CAD/Oil link work so well, the loonie tracked black gold pretty much all this week, as seen in the chart below. Yields advanced slightly.
Tuesday April 09
A gloomy growth forecast from the IMF, and a Trump tweet threatening EU tariffs spooked markets, which pulled back today. The DAX move was particularly sharp on the tweet, as you would expect as 20% of the German index is autos, one of Trump’s well-known targets.

The dollar had a flat day, with a slight move up in JPY (and Gold) being matched fades in CAD (as Oil gave up some of Monday’s gains) and GBP (the usual reason). EUR and AUD were flat. Yields were down due to stock-bond rotation.

Wednesday April 10
Today was packed with events, but they had little effect on the market. The ECB and Fed offered nothing new, merely repeating their dovish rhetoric from previous months, and the mixed US CPI at 1230 (MoM beat 0.4% vs 0.3%, Core miss, MoM 0.1% vs 0.2%, YoY 2.0% vs 2.1%) was disregarded. Even the hefty EIA miss (7.03M v 2.29M) at 1430 had little effect on Oil which followed equities up, recovering some (Europe/Japan) or all (US) of Tuesday’s losses.

DXY slipped slightly (-0.11%) largely due to a GBP recovery after the GDP beat at 0830. EUR did crash 40 pips when ECB Draghi spoke at 1230, but this was recovered in four hours. Of course this may have been caused by the simultaneous CPI print (as CAD made a similar move, as did yields, which stayed down). Despite the equity recovery, Gold and JPY continued to advance, as counterintuitively did AUD.

Thursday April 11
Equities stalled today, with most markets flat. DAX and FTSE dumped at the European open, probably in disappointment at the Brexit 6-month (and not 12-month extension) but quickly recovered. The dollar was slightly up (DXY +0.26%) but evenly (all currencies down) up after positive comments on the US/China situation from TreasSec Mnuchin.

Despite flat indices, there were mixed messages from the usual indicators. JPY and Gold gave clear risk-on signals. The yen was the weakest currency today, and Gold fell 1.39%, its worst day this month. However, yields rose 3bp, and Oil gave up 2% from Wednesday’s high.

Friday April 12
The long awaiting earnings season opened with a bang with banking giant JPM beating estimates and filing the highest ever first quarter profit for a US bank. It added 4.6% on the day. WFC also beat on EPS but missed on revenue and its stock fell 2.6%. DIS gapped up 10% on news of their new streaming service. SPX is now only 0.81% off its all-time high, and NDX is only 0.45% away, a remarkable recovery from the December lows. A sharp rise in yields signalled further bond-stock rotation, and Oil followed stocks although giving up those gains into the close.

Other world indices followed suit with the exception of FTSE which collapse on a very strong GBP rally, although this faded after European equities closed. Overall DXY continued its downward trending for the week with all currencies up, except of course JPY (and Gold).


WEEKLY PRICE MOVEMENT
Equity markets were directionless for much of the week, only rallying on Friday. NDX was the best performer. In forex, USD finally had a pullback week, with DXY shedding 0.53%. The best performer was, unusually, AUDJPY up 1.21%.  FANGs were fairly flat, except for NFLX, which pulled back on the DIS streaming channel announcement. DIS was up 13% on the week, its best for 10 years. Cryptos went back to sleep after a couple of wild weeks.


Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on UUP. The equity and index prices are now based on the cash close each day.

NEXT WEEK (all times are GMT)
(Calendar High volatility items are in bold)

Monday April 15
The four-day pre-Easter week opens with little scheduled news, so attention will be on the next two banks, GS and C who report before the bell. GS is 5.26% of DJIA. Fed Evans (2019 voter, centrist) speaks at 1700, and BoE Haskel (centrist) is on an hour earlier. It is Tax Day in the US, so expect additional volatility. Markets are closed in Vietnam, Thailand and Sri Lanka.

14:30 CAD BoC Business Outlook Survey
16:00 GBP BoE Haskel speech

Tuesday April 16
A big day on earnings with BAC, and JNJ and UNH (together 9.62% of DJIA) reporting before the bell, and tech giants IBM and NFLX reporting after the close. Fed Rosengren (hawk, 2019 voter) speaks at 0000. Markets are closed for a second day in Thailand for the Songkran Festival.

00:00 USD Fed Rosengren speech
01:30 AUD RBA Meeting Minutes
02:00 CNY China NBS Press Conference
08:30 GBP AHE/Unemployment/Claimant Count Change (AHE e 3.4% uc)
09:00 EUR ZEW Sentiment Surveys (Econ Sentiment e -11 p -3.6)
12:00 NZD GDT Milk Index (time approx.
13:15 USD US Industrial Production (MoM)
20:30 WTI API Oil Stock
22:45 NZD NZ CPI (e 1.8% uc)
23:50 JPY Japan Imports/Exports/TB

Wednesday April 17
The earnings reports continue today, with banker MS before the open, and AA after the close. UK inflation will be watched closely, now the immediacy of Brexit is muted. Fed Bullard (dove, 2019 voter) speaks on the economic outlook. Markets are closed in India and for a half-day in Norway. There is a rate decision on HKD, and a general election in Indonesia (incumbents leading in polls).

02:00 CNY China Retail Sales/Industrial Production
02:00 CNY China NBS Press Conference
02:00 CNY China Q1/19 GDP (YoY e 6.3% p 6.1%)
04:30 JPY Japan Industrial Production (YoY)
08:30 GBP UK CPI/RPI/PPI (Core CPI YoY e 1.8% uc)
09:00 EUR EZ CPI (Core YoY est 0.8% unch.)
12:30 USD TB (Feb)
12:30 CAD Canada CPI (BoC Core p 1.5%)
14:30 WTI EIA Oil Stock
18:00 USD Fed's Beige Book

Thursday April 18
Today is option expiration date for April and the week as tomorrow is a holiday. DJIA components TRV (before the market) and AXP (after) report today. Markets are closed in the Nordic Countries (except Finland), The Philippines, and most of Latin America for Maundy Thursday. There is a rate decision on KRW.

01:30 AUD Australia NFP/UE (e 12k/5% p 4.6k/4.9%)
06:00 EUR Germany PPI MoM (Mar)
07:30 EUR Germany Markit PMIs (Mfr e 45, p 44.1)
08:00 EUR EZ Markit PMIs (Composite e 51.8 p 51.6)
08:30 GBP UK Retail Sales
12:30 USD US Retail Sales (Mar Control Group e 0.4% p -0.2%)
12:30 USD US Jobless Claims
12:30 USD Philly Fed Manufacturing Survey
12:30 CAD Canada Retail Sales (p -0.3%)
23:30 JPY Japan National CPI

Friday April 19
The USTC is expected to release its report on the USMCA (NAFTA 2). There may also be a report this week (scheduled mid-April) on China currency manipulation. Markets in the US and Europe are closed today for Good Friday. Asia remains open. Note that Europe and Australasia are also closed on Monday. There are no earnings reports of note, and only one news item. Futures trading and forex remain open.

12:30 USD US Building Permits/Housing Starts
17:00 WTI Baker Hughes Rig Count


This report is published every week as an email by MatrixTrade.com - you can sign up to receive it here. This blog is supported solely by advertising, so if any of the ads interest you, please click on them. If you want notification when the blog is updated, please follow me on TwitterFacebookStocktwitsTradingView or Linkedin (all open in separate windows). Details of how I compile the report are here

Sunday, 7 April 2019

Week to Apr 5th


Equities rally on China hopes, Flat dollar despite wild GBP, Best crypto week for over a year

Mon Apr 01
The first day of the week, the month and the quarter opened strongly after the China Manufacturing PMI beat at 0145. We pointed out the significance of this last week. The figure came in at 50.8 vs 49.9 est, only 0.9 beat, but critically crossing the 50 point, the line between contraction and expansion. The important US ISM similar release beat at 1400, giving a sharp uptick to USDJPY. (the same release for Germany at 0700 - 44.1 vs 44.7 est - showed that last month’s print of 47.6 was not an outlier, as some commentators had thought.

The net result was a strong risk-on run for equities across the board, and an advance of 0.13% for DXY. EUR, JPY, Gold and 10-year Bonds (inverse to yields) dropped suddenly after the ISM print. Against this, CAD perked up after hawkish (well less dovish than expected) remarks from the BoC at 1755. AUD, without news, was flat. The dollar advance would have been greater expect for cable, up 1% on ‘soft’ Brexit hopes.

Tuesday April 02
As we predicted last week, the RBA did indeed join the chorus of doves at 0330, and the day started with a sharp fall in AUD. GBP had collapsed overnight, but climbed back to end the day flat on reports of bipartisan (ie May and opposition leader Corbyn) Brexit talks. CAD faded the Poloz gains. As AUD is not part of DXY, and the other majors had a quiet day, the DXY basket closed virtually flat (-0.03%), as did yields. Gold was slightly up. Equities had another good day, but mostly outside the US. NDX managed to add 0.3% but SPX was flat.

What was interesting is that after months in the doldrums, BTC spiked up 20% up in an hour from 0430, with, obviously, over 100x normal volume (and held onto these gains). This was accompanied by a similar move in ETH, but that took two days to complete. Naturally rumours abounded an Asian ‘whale’ in this unregulated world.

Wednesday April 03
Reports in the FT that the US and China were close to finalising their trade deal, plus a raft of PMI Services beats, resulted in a third day of equity gains, particularly in DAX. Only the US wobbled slightly after their ISM Non-Manufacturing print missed at 1400, trimming an SPX 0.6% advance to 0.2% at the close. After two green days Oil was down slightly after the substantial EIA stock miss (+7.2M vs -0.4M, more is worse) at 1430.

DXY shed 0.22% today, on the contrasting US and other PMIs, and possibly the ADP jobs miss at 1215. Gold was down, and yields and AUD were up in line with risk-on equities. JPY and CAD were probably pulled in two directions, risk on vs dollar weakness and Oil respectively. Both currencies were flat. EUR and GBP were both up.

Thursday April 04
Another up day from equities as Trump confirmed the China progress, although the pace was slowing. FTSE gapped down 0.4% to reflect overnight GBP strength but managed to recover this to end flat. The dollar recovered to close where it ended on Tuesday, evenly across all currencies. Oil faded slightly in line with the dollar. Gold was unusual, spiking down 0.5% through six hours to touch it Mar 7 low before recovering. Yields were flat on the day.

Friday April 05
Without a lead from China, which was closed, markets breathed a sigh of relief on the NFP beat at 1230, showing that last month was an outlier, and all were up, although the DAX gain was marginal. The SPX ran nicely to a pattern we have pointed out before, where after an instant spike, the price fades until the cash open, and then the size of that spike is repeated, as shown in the chart here. The trade is to buy SPX at the open, with a stop below the pre-NFP price, and a target of the ramp repeated. Oil was up 1.5% in line with the mood.


DXY was only very slightly up (+0.07%), EUR made small gains to offset the fall in GBP (Brexit) and CAD (Canadian NFP miss). After a strong week, yields fell 4bp after Trump called for the Fed to reintroduce QE.

The US major markets are now very close to previous all-time highs. SPX and DJIA are 1.68% away, NDX is even nearer at 1.39%, although notably RUT, DAX, NKY are around 10% off. It will be interesting to see if the SPX record close of 2930 is beaten next week.


WEEKLY PRICE MOVEMENT
Another strong week for DAX makes it the top index mover again. In forex, the best trade would have been AUDJPY, up 0.90%. FANGs all beat their parent NDX index, with a particularly strong showing from FB, and the Tuesday crypto spike held, to give BTC and ETH their best week for over a year.


Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on UUP. The equity and index prices are now based on the cash close each day.


NEXT WEEK (all times are GMT, not BST)


(Calendar High volatility items are in bold)
  • EU consider further Brexit delay
  • US, China and German inflation
  • ECB rate decision and statement
  • Earning season starts on Friday

Monday April 08
After last weeks big calendar and start to the week and quarter, we are back to the usual quiet Monday today. Watch out for any weekend news, particularly on Brexit or Trump tweets. There are rate decisions on ILS and LKR. Markets are closed in Thailand.

06:00 EUR Germany Trade Balance
14:00 USD US Factory Orders (MoM)

Tuesday April 09
Another quiet day, with no releases in the European and US cash sessions, except the JOLTS jobs openings at 1400. Fed Vice Chair Clarida, (voter, obviously) centrist by definition, but thought to be leaning dovishly at the moment. Markets are closed in the Philippines and in Israel where there is an election, where the incumbent Likud government may not win. There is a rate decision on RSD.

01:30 AUD Aus Home Loans
05:45 CHF Switzerland Unemployment Rate
20:30 WTI API Oil Stock
22:45 USD Fed Clarida speech
23:01 GBP UK BRC Like-For-Like Retail Sales
23:50 JPY Japan Machinery Orders

Wednesday April 10
Easily the busiest day of the week, the EU summit is almost certain to grant UK PM May a long extension to Brexit, rather than the short one she has asked for, figuring that the longer the extension, the softer the eventual Brexit, which is the EU’s stated preference. With Bund yields still negative, the ECB statement should prove interesting. Further TLTRO details may be unveiled, and if not, may be asked about in the presser.

US CPI is expected to be unchanged, which validates the Fed’s current no hike policy. The risk is to the upside, ie a beat may make traders think again. Although not a rate set meeting, the FOMC March minutes today put some flesh on the bones of the dovish reversal seem recently.

00:30 AUD Aus Westpac Consumer Confidence
02:30 AUD RBA's Debelle speech
06:15 JPY BoJ Governor Kuroda speech
08:30 GBP UK Manufacturing/Industrial Production
08:30 GBP UK GDP (MoM Feb)
11:45 EUR ECB Rate Decision/Statement (est 0% hold)
12:30 USD US CPI (Core YoY est 2.1% prev 2.1%)
12:30 EUR ECB Presser
15:30 WTI EIA Oil Stock
15:50 USD Fed Quarles speech
18:00 USD FOMC Minutes

Thursday April 11
Voting in the Indian election starts today. The world’s largest electorate will take six weeks to vote, with the counting starting on May 23. Exit polls are notoriously unreliable, but nevertheless, any significant move from the BJP to the Congress party may have an effect on markets. Chinese and German inflation are the key prints on the day.

00:00 AUD Aus Consumer Inflation Expectations
01:30 CNY China CPI (est 2.3% prev 1.5%)
02:30 AUD RBA's Debelle speech
06:00 EUR Germany CPI (est 1.4% prev 1.5%)
12:30 USD US PPI
12:30 USD US Jobless Claims
13:30 USD Fed Clarida 2nd speech
20:00 USD Fed Bowman speech
22:30 NZD Business NZ PMI
22:45 NZD NZ Electronic Card Retail Sales 

Friday April 12
The Q1/2019 Earnings Season starts today with the usual first reporter JPM, and fellow bank WFC, before the bell. The dovish Fed is bad for banks, and traders will be watching forward estimates closely. The IMF begin a three-day meeting in Washington DC. Today is the next Brexit 'deadline' although it is likely another extension will have been granted before then. Markets have a half-day in Sri Lanka. There are elections in Finland on Sunday.

02:00 CNY China Imports/Exports/Trade Balance
02:15 CNY China FDI
09:00 EUR Eurozone Industrial Production
14:00 USD Michigan Consumer Sentiment Index (est 98.0 prev 98.4)
17:00 WTI Baker Hughes Rig Count

This report is published every week as an email by MatrixTrade.com - you can sign up to receive it here. This blog is supported solely by advertising, so if any of the ads interest you, please click on them. If you want notification when the blog is updated, please follow me on TwitterFacebookStocktwitsTradingView or Linkedin (all open in separate windows). Details of how I compile the report are here


Sunday, 31 March 2019

Week to Mar 29th


Further Brexit defeats, NZD collapse, Mueller exonerates Trump (for now)

Mon Mar 25
After last Friday’s collapse following the 10-year/3-month bond inversion, markets were subdued today, with SPX flat, although non-US markets showed some recovery. USD was similarly flat, with slight moves down in GBP being matched by slight increases elsewhere.  Oil, Gold and bonds (inverse to yields) were up on the day, with the 10-year yield down 4.4bp. Apple’s product event underwhelmed the market, and the stock dropped 1.5%.

Tuesday March 26
All equity indices were up today as market digested the Mueller report exonerating, which was announced at weekend, but probably took a day to digest. Sometimes they do this on a ‘no news’ day. The dollar was also up as the drop in yields halted. DXY added 0.28% but the picture was mixed. The usual risk-on profile was seen. Gold and JPY were down, but AUD and CAD were up. EUR fell after the Germany Gfk confidence miss at 0700, whereas GBP was slightly up as some Brexiteers softened on the Theresa May deal, not enough however for the vote, which was cancelled. Oil had another good day.

Wednesday March 27
The day started with the RBNZ joining the dovish CB chorus. The kiwi fell sharply, finishing nearly 2% down on the day. Also Trump potential Fed nominee Stephen Moore called for a policy reversal and rate cut. Yields naturally fell again, but surprisingly USD held its own with DXY adding 0.17%, in a mixed day where JPY advanced as rates fell, as did GBP, but others declined. Gold and Oil were down in line with the stronger dollar. The dovishness caused an early rally in SPX futures, but this sold off hard at the open despite the trade balance beat, and did not fully recovery. DAX and FTSE were choppy but ended roughly flat helped by weaker currencies. NKY fell all day. An odd day, where markets behaved counter-intuitively.

Thursday March 28
Markets recovered on Thursday as the US QoQ GDP and PCE beats at 1230 (although the YoY figure missed). Housing and Jobless Claims data was mixed. All indices were up on the day. DXY was up again, only 0.17% but all currencies were down, GBP sharply (over 1%) as British MPs voted down a series of alternatives to the Prime Minister’s deal. Gold was notably down 1.5%. Oil dipped during the session on growth expectations, but ended the day flat.

Friday March 29
A final rally on Friday, fuelled by China trade talks optimism, and another upturn in the Michigan Sentiment Index gave the indices their best quarterly increase since 2010, and the best SPX Q1 since 1998. A flat DXY belied substantial currency movement, in particular an immediate 0.68% move up in CAD after the GDP MoM beat at 1230 (0.3% vs 0.0% best), and a wildly choppy GBP after the third Brexit deal vote was lost, down 1.16% on the day. Yields carried on upwards, and Oil rallied in line with equities.


WEEKLY PRICE MOVEMENT
After last week’s work performance, DAX was the best index this week. Four weeks in a row now for GBPJPY as the biggest mover, like last week a sell. Cryptos had another quiet week.

We have problems with Google Finance data this week, so no table


NEXT WEEK (all times are GMT)
(Calendar High volatility items are in bold)
  • RBA Rate Decision
  • More China trade talks
  • Lots of Manufacturing data
  • Non-farm Payrolls

Monday April 01
This week Chinese Premier Liu travels to the US to continue trade talks. One of the busiest Mondays in months has a day packed with Manufacturing PMIs. China’s is very important, as it’s on the cusp on expansion/contraction, and may cause even more of an effect than the US ISM figure later in the day. Note that the UK and Europe are now on DST, but we stick with GMT in our listings. Also of course we start a new month and quarter.

01:00 CNY China Mfr & Non-Mfr PMIs (Sunday)
23:50 JPY Japan Tankan Large Mfr Index/Outlook (Sunday)
00:00 AUD HIA New Home Sales (MoM)
01:45 CNY Caixin Manufacturing PMI Mar (est 49.9 prev 49.9)
07:55 EUR Germany Markit Manufacturing PMI
08:30 GBP UK Markit Manufacturing PMI
09:00 EUR Eurozone CPI (Core est 1%)
12:30 USD US Retail Sales (Feb Control Group best 0.4% prev 1.1%)
13:30 CAD Canada Markit Manufacturing PMI
13:45 USD US Markit Manufacturing PMI
14:00 USD US ISM Manufacturing PMI (est 54.4 prev 54.2)
21:00 NZD NZIER Business Confidence (QoQ)

Tuesday April 02
The big story is the RBA statement, where traders will be looking for a repeat the RBNZ dovish line last week. Fed Bostic (dovish, non-voter) speaks today. Argentina's markets are closed today. There is a rate decision on RON (2.5% hold expected)

00:30 AUD Aus Building Permits (MoM)
03:30 AUD RBA Rate Decision/Statement (est 1.5% hold)
06:30 CHF Switzerland CPI
09:00 EUR Eurozone Unemployment Rate
09:30 GBP UK Markit Construction PMI
12:30 USD US Non-defense Capital Goods (est 0.3% prev 0.8%)
14:00 NZD NZ GDT Milk Index
20:30 WTI API Oil Stock

Wednesday April 03
Unusually quiet for a Wednesday on the data front. Watch for the ADP print, an indicator for Friday’s NFP. Fed Mester (hawk, 2019 voter) speaks today. There is a rate decision on PLN (1.5% hold expected)

00:30 AUD Aus Retail Sales s.a. (MoM)
00:30 AUD Aus Imports/Exports/TB
01:45 CNY China Caixin Services PMI
08:00 EUR Eurozone Markit PMI Composite
08:30 GBP Markit Services PMI
09:00 EUR Eurozone Retail Sales (YoY)
12:15 USD US ADP Employment Change
13:45 USD US Markit Services/Composite PMI
14:00 USD US ISM Non-Manufacturing PMI (est 58.7 prev 59.7)
14:30 WTI EIA Oil Stock

Thursday April 04
Another slow data day. Fed Bostic is on again today. There is a rate decision on INR (6.25% hold expected)

06:00 EUR Germany Factory Orders s.a. (MoM)
12:30 USD Jobless Claims
14:00 CAD Canada Ivey PMI
21:30 AUD Aus AiG Performance of Construction Index
23:30 JPY Japan Overall Household Spending (YoY)

Friday April 05
US and Canadian NFPs as always almost guarantee USDCAD volatility. After last month’s shocker, traders will be looking to see if there is any further shutdown effect on the March report. It's the end of the UK income tax year today. Hong Kong and China are closed for Ching Ming.

05:00 JPY Japan Leading Economic Index
06:00 EUR Eurozone Industrial Production s.a. (MoM)
12:30 USD US NFP/AHE/Unemp/Participation (est 175k prev 20k)
12:30 CAD Canada NFP/AHE/Unemp/Participation (prev 55.9k)
17:00 WTI Baker Hughes Rig Count


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Sunday, 24 March 2019

Week to Mar 22nd


Fed signal no more hikes in 2019, Still no Brexit resolution, Very bad week in Germany


 Mon Mar 18
US markets continued last week’s rally today, as did FTSE on the back of weaker sterling. The mood did not extend to NKY and DAX, which were flat. The dollar was generally flat (DXY +0.08%). There was none of the usual intermarket correlation. Gold and JPY (and EUR) were slightly up despite SPX gains. AUD was up, CAD was slightly down despite Oil rising, as was GBP. Yields fell slightly despite stronger equities.

Tuesday March 19
An early rally in SPX today fell off sharply on reports that China is pushing back on some US trade demands, with indices flattening off. Only DAX managed to stay green, after upbeat comments on the automotive sector (about 20% of the index) from BAML. The dollar had another flat and directionless day (DXY +0.12%), with a Turnaround Tuesday on most currencies, bonds and Oil. Only Gold and EUR moved in the same direction as Monday. This was despite decisive beats in UK AHE and unemployment (the latter the lowest since 1971) at 0930, and German ZEW Sentiment at 1000. It seems like everyone was waiting for the Fed.

Wednesday March 20
The big story today was the Fed minutes, with a hugely dovish move in the ‘dot-plot’ (the views of individual FOMC members) from two rate hikes in 2019 to zero. The reaction in USD was immediately, an instant 0.5% down, which is where it ended the day. All currencies, Gold and bonds (inverse to yields) were up with the exception of GBP, which was already down 0.75% on Brexit concerns that it still managed to close red on the day. The third parliamentary vote on Brexit was postponed. Oil was up sharply on the EIA beat at 1430.

US equities had been falling all day following a statement by President Trump that the US will most likely leave tariffs in place during negotiations to ensure “China lives by the deal”. They were given a small short-lived boost by the Fed announcement, but all ended red. DAX woes were compounded by a 13% drop in BAYN.DE (BAYRY) following a court judgment that Roundup weedkiller caused cancer, and 5.7% drop in BMW on a profits warning.

Thursday March 21
Stocks slid in the Asian and European markets, as did US futures, but on the cash open there was a classic risk-on surge with SPX adding 1.1% and the riskier NDX was 1.4% higher. It was clear that this was a reaction to the dovish Fed as financials (which benefit from high interest rates as they are lenders when everyone else is borrowers) were the only sector to fall. Other indices followed, except DAX, beleaguered with individual component problems, today it was DBK.DE (DB) and CBK.DE (CRZBY) opening 5% and 4% lower.

DXY recovered most of its Wednesday drop, and all currencies, Gold, Oil and bonds were down. However this was not even. Although EUR exactly retraced (as did AUD), the key instruments of JPY and bond yields only faded a little of the Fed move. It was a large further drop (0.57%) in GBP which evened out the basket. The BoE rate decision did not cause any notable move, selling was fairly even all day.

Friday March 22
In the European session today, DAX and EUR were hit hard by a surprisingly bad miss on the German Manufacturing PMI at 0830 (44.7 v 48.0 est). The German Bund yield went negative for the first time since October 2016.

The Eurozone equivalent print half an hour later was 47.6 vs 49.5 est. FTSE also fell as GBP recovered. Following that, US markets were sapped by the US 3-month bond yield rising above that of the benchmark 10-year note, as the latter hit a 14-month low of 2.418%. This inversion is considered to be a recession indicator and was last seen in August 2007, just before the massive equity pullback. The sell-off was strong, SPX down 1.9%, NDX down 2.5% and RUT losing 3.6%.

USD was generally back up again today, although Gold, JPY and bonds rallied in the risk-off conditions, and GBP bounced back from the Thursday low. The Canadian CPI beat
and Retail Sales miss at 1230 cancelled each other out. Oil 
gave up Wednesday’s gains in line with the equity fade.


WEEKLY PRICE MOVEMENT
The collapse of DAX after a string of issues for individual stocks such as Bayer, BMW and Wirecard made in the biggest index mover in a generally flat week for equities. For the third week, the biggest forex mover was GBPJPY, the best short two weeks ago, the best buy last week, and now the best short again. It was a second quiet week for cryptos, and FANGs were mixed, although generally outperforming NDX.



Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on UUP. The equity and index prices are now based on the cash close each day.



NEXT WEEK 
(all times are GMT)


(Calendar High volatility items are in bold)
  • Brexit endgame approaches
  • Large CB speaker roster
  • NZ rate decision
  • Final week of Q1/2019


Weekend News
The latest on Brexit is that the EU have offered to extend Friday’s deadline until May 22 if the deal is passed in Parliament this week, but only until Apr 12 if it isn’t. Weekend reports suggest no progress. In the US, Special Prosecutor Mueller is due to publish his report into Russian election meddling, but has already said there will be no further indictments. 


Monday March 25
USTR Lighthizer and TreasSec Mnuchin return to China this week to resume trade talks. Apple are holding a special product event, widely believed to be a new streaming service. There is another attempt by British MPs to take control of Brexit from the government. Fed Evans (centrist, 2019 voter) speaks today at 0145, followed by Harker (dove, 2020 voter) at 1000. Markets are closed in Greece and Colombia.

09:00 EUR Germany IFO Business Climate/Assessment/Expectations
12:30 USD Chicago Fed National Activity Index
17:00 AAPL Apple Product Event
20:30 AUD RBA Ellis speech
21:45 NZD NZ Imports/Exports/TB


Tuesday March 26
The third and final Brexit deal vote is planned for today, although weekend reports suggested it may be cancelled due to lack of support.

The Boao Forum opens in China today, with Premier Li Keqiang giving the opening remarks. Fed Harker (dove, 2020 voter) speaks at 1200 followed by Rosengren (hawk, 2019 voter). There are rate decisions on HUF (est 0.9% hold) and NGN.

07:00 EUR Germany Gfk Consumer Confidence Survey
12:30 USD US Housing Starts/Building Permits
13:00 USD US S&P/Case-Shiller Home Price Indices (YoY)
14:00 USD US Consumer Confidence
20:30 WTI API Oil Stock


Wednesday March 27
Senate Aviation Committee hearings on the Boeing 737-Max start today. The FAA and NTSB will testify. Traders will be listening to see if the RBNZ joins the dovish chorus. There are plenty of other CB speakers. RBA Asst Gov Kent speaks at 0010, and Fed George (hawk, 2019 voter) is on at 2130. From the ECB we have Chair Draghi (0800), Praet (0845), De Guindos (1045) and Mersch (1330). There is rate decision on KES.

01:00 NZD RBNZ Rate Decision/Statement (1.75% hold est)
09:40 EUR DE10 Bond Auction
12:30 USD US Trade Balance
12:30 CAD Canada International Merchandise Trade
14:30 WTI EIA Oil Stock


Thursday March 28
Today is the most important day in the week for data, with the final US GDP print for Q4, as well as PCE, the Fed’s preferred inflation indicator, and German inflation as well. Fed Quarles (centrist, 2019/2020 voter) speaks at 1115, followed by Williams (hawkish, 2019/2020 voter) at 1325 and Vice-Chair Clarida (centrist 2019/2020 voter) at 1330, and Bullard (dove, 2019 voter) at 2120. SNB Maechler is on at 1700. There are rate decisions, all expected to hold on CZK (1.75%), ZAR (6.75%) and MXN (8.25%).

In the British Parliament, today is the last day to pass the Brexit extension bill (short or long) as the House does not sit this Friday.

08:00 EUR ECB Pres Draghi speaks
10:00 EUR Eurozone Business Climate
12:30 USD US Jobless Claims
12:30 USD US 18Q4 GDP Final (est 2.4% prev 2.6%)
12:30 USD US PCE
13:00 EUR Germany CPI (est 1.6% prev 1.7%)
14:00 USD US Pending Home Sales (MoM)
21:45 NZD NZ Building Permits s.a. (MoM)
23:30 JPY Tokyo CPI (est 1.1% prev 1.1%)
23:30 JPY Japan Unemployment Rate
23:50 JPY Japan Retail Sales


Friday March 29
Today is the end of the week, month and quarter. In the UK, it is Brexit Day, unless an extension is granted and passed by Parliament, which seems almost certain. Taxi firm LYFT makes their IPO on the Nasdaq. Fed Quarles speaks again at 1645. A Moodys rating review is due in South Africa. There is a rate decision on CLP.

00:00 GBP Brexit Day - UK Initial Departure Day
00:01 GBP UK GfK Consumer Confidence
07:00 EUR Germany Retail Sales
08:55 EUR Germany Unemployment Rate/Change
09:30 GBP UK 18Q4 GDP Final
12:30 USD US Personal Income (MoM)
12:30 CAD Canada GDP Jan (MoM)
13:45 USD Chicago PMI
14:00 USD Michigan CS Index
14:00 USD US New Home Sales (MoM)
17:00 WTI Baker Hughes Rig Count



This report is published every week as an email by MatrixTrade.com - you can sign up to receive it here. This blog is supported solely by advertising, so if any of the ads interest you, please click on them. If you want notification when the blog is updated, please follow me on TwitterFacebookStocktwits or Linkedin (all open in separate windows). Details of how I compile the report are here


Saturday, 16 March 2019

Week to Mar 15th


Brexit deadlock: UK seeks extension, Trade talks postponed, SPX NDX and Oil hit new 2019 highs

Mon Mar 11

Equities sharply reversed last week’s decline today as the mood changed, driven by M&A enthusiasm as NVDA announced the acquisition of MLNX, and the merger of DB and CBK.DE moved closed. All four stocks shot up. SPX added 1.5% and NDX was up 2%. DJIA opened much lower as its largest component BA gapped down 10% after the 737-Max disaster in Ethiopia, but recovered during the day to close 1.2% up. DAX and NKY followed the US, but FTSE was in the red due to the strong pound. As explained many times in the past, the FTSE has an large number of companies whose revenue is in USD, and so their GBP-quoted stock price moves up when GBP moves down.

DXY was down 0.42% mainly because of a 1.4% surge in GBP, after reports that the weekend had led to something new from the EU side for the Brexit deal vote on Tuesday. The other instruments were as you would expect on a risk-on day. AUD, CAD, Oil and US 10-year yields were up, JPY and Gold were down.

Tuesday March 12
US indices took a breather today and closed only marginally up. DJIA was marginally down, as BA fell again as countries around the world started grounding the 737-Max. DAX was down as DB and CBK gave up some of Monday’s gains, as did NKY. Only FTSE benefited for the same reason it bucked the prevailing trend yesterday.

The high hopes that today, embattled British PM May was finally going to get her Brexit deal passed by Parliament crashed and burned at 1100, when AG Cox confirmed the legal position on the backstop had not changed. GBP instantly fell 1.5%. As expected, the vote later in the day failed.

The US CPI miss at 1230 weighed on USD which fell against most currencies, which when added to the GBP crash resulted in a flat dollar basket for the day. Yields fell sharply by 4.1bp on the CPI news to under 2.6%, a two-month low. Gold rose in line with the dollar move, and Oil was flat.

Wednesday March 13
Enthusiasm returned today, and stocks took another leg up, with SPX and NDX adding 0.7%. The US joined other countries in grounding BA airplanes, but after an initial 3.2% dip, the stock closed 0.5% up. Global indices were up in line. NKY, which had fallen sharply at the open on weak Japanese machinery data recovered in futures to join the others. Yields pulled back 2bp in line.

The dollar was firmly down (DXY -0.53%) across the board (even against JPY) after a miss on PPI at 1230 added to yesterday’s poor CPI print, and GBP soared again, after UK MPs voted to reject a no-deal exit from the EU. Gold and Oil were up in line, the latter reaching a four-month high after the EIA beat at 1430.

Thursday March 14
Just as Wednesday was like Monday, today was like Tuesday, and US indices were flat (this time SPX and NDX were a shade down and DJIA a little up, after strong day for AAPL and V). Misses on Jobless Claims and New Home Sales, and reports of a postponement to April in the US/China talks did not help. It was a similar picture in non-US indices, except for FTSE, buoyed by the no-deal rejection and a pullback in GBP.

USD recovered some of yesterday’s losses and was up against all currencies and Gold. The fall in Gold and AUD was particularly sharp and both may be linked to Copper giving up 1.75% on the day. Yields climbed slightly in line with the dollar. Oil made a small advance. The rise all week has been built on supply cut hopes, and the US sanctions on Venezuela.

Friday March 15
There was another step up today, although slightly weaker as SPX added 0.5% to make a total of 2.9% for the week, the best this year, and together with NDX, a 2019 high. This is all driven by US/China hopes and a ‘patient’ Fed. Today’s rally was largely driven by the JOLTS Jobs beat and the Michigan Consumer Sentiment beat (97.8 vs 95.3) both at 1400. The MCS estimate had already been revised above the 93.0 we published last week, but the print was read as a reversal of the recent decline.

Different prints affect different assets, and the NY Manufacturing Index and Industrial Product and Capacity Utilisation misses at 1230 had little effect on index futures, but precipitated move down in USDJPY and 10-year yields, the latter dropping 5bp in two hours. The decline in both was arrested by the MCS print, but they did not recover. Overall DXY was down 0.24% today, with only CAD weakening as it followed Oil which pulled back slightly after four days of gains. There was nothing surprising from the BoJ rate hold meeting, and despite a brief 30 pip wobble, the yen remained flat during the Asian session.


WEEKLY PRICE MOVEMENT
NDX was the standout performer this week, reflecting a return to risk-on mood, with its biggest component AAPL the star performer. In currencies the wild GBP swings. DXY fell 0.89%, giving up last week’s gains, with only yen declining, also reflecting risk-on. Therefore last week’s top short GBPJPY is this weeks best buy, up 2.42% to pretty much exactly where it was two weeks ago. BTC and ETH had a second quiet week. It was unthinkable even a year ago that crypto would be less volatile than currencies and indices, never mind individual stocks. The CBOE closed its Bitcoin futures contracts this week, citing lack of interest, although the rival CME continues to offer the product.



Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on UUP. The equity and index prices are now based on the cash close each day.


NEXT WEEK (all times are GMT)
(Calendar High volatility items are in bold)
  • Brexit saga continues with two weeks to go
  • Fed Rate Decision week
  • UK inflation, jobs, and rate decision
  • Bumper PMI day Friday

Monday March 18
Another quiet Monday, unless some black swan flies in over the weekend. There is no European or US news today. Markets are closed in Mexico for Benito Juarez' birthday.

23:50 JPY Japan Imports/Export/TVB (Sunday)
04:30 JPY Japan Industrial Production (YoY)
20:00 NZD NZ Westpac Consumer Survey
22:00 AUD RBA Kent speech


Tuesday March 19
The German sentiment index is likely to be balanced with a continuing strong equity index being offset by continual weak data and Brexit concerns. Any move in GBP from the UK earnings and unemployment results is likely to be overshadowed by Brexit.

00:30 AUD Aus House Price Index (QoQ)
00:30 AUD RBA Meeting Minutes
09:30 GBP UK AHE/Unempl/Claimant Count (AHE est 3.4% prev 3.4%)
10:00 EUR Eurozone Labour Cost
10:00 EUR Germany ZEW Sentiment (est -11.3 prev -13.4)
14:00 USD US Factory Orders (MoM)
14:00 NZD NZ GDT Milk Index
20:30 WTI API Oil Stock
23:50 JPY BoJ MPC Minutes


Wednesday March 20
The CME FedWatch tool has a 98.7% priced-in hold at today’s Fed meeting. With the recent weak jobs and inflation data, yet strong ISM prints, it will be interesting to see which way the Fed jumps in their rhetoric. Note the press conference is 30 minutes later, allowing for some wild moves in the short intervening period. Also scheduled today is yet another UK Parliamentary vote. on Brexit. This could be ‘the one’ with only nine days to go before the scheduled leaving date. This thing is changing every day, so keep watching the press. UK inflation, normally important is overshadowed by Brexit developments. There is a rate decision on BRL (1700)

00:00 AUD RBA Bullock speech
05:00 JPY Japan Leading Economic Index
07:00 EUR Germany PPI
09:30 GBP UK CPI/RPI/PPI (est 1.8% prev 1.8%)
14:30 WTI EIA Oil Stock
18:00 USD Fed Rate Decision/Statement (est 2.5% hold)
18:30 USD Fed Presser
19:00 GBP UK Parliamentary Vote on Brexit
21:45 NZD NZ 18Q4 GDP (est 0.6% prev 0.3%)


Thursday March 21
The UK rate statement allows Gov Carney to give his view on the Brexit situation. It may be hard to determine the general dovish/hawkish view through this. The European Council meets today to discuss China and the US-EU trade deal. Markets in Japan and India are closed for Vernal Equinox Day and Holiday respectively. There are also rate decisions on CHF, NOK, IDR, PHP, and TWD.

00:00 EUR European Council Meeting (all day)
00:30 AUD Aus NFP/Unemployment (est 15k prev 39.1k)
00:30 AUD RBA Bulletin
08:30 CHF SNB Rate Decision/Statement (est -0.75% hold)
09:00 EUR Eurozone Economic Bulletin
09:30 GBP UK Retail Sales
12:00 GBP BoE Rate Decision/Statement (est 0.75% hold)
12:30 USD US Jobless Claims
12:30 USD Philly Manufacturing Survey
23:30 JPY Japan National CPI


Friday March 22
Mostly PMIs today, the full Markit sets (Manufacturing, Services, Composite) are published for Germany, the UK and the US. The main volatility today will probably be in CAD with the Retail Sales and CPI simultaneous prints. Fed Bostic (dovish, non-voter) speaks at 0130 Saturday. There are rate decisions on RUB (1030) and COP (2000).

08:30 EUR Germany Markit PMIs
09:00 EUR Eurozone Markit PMIs
09:30 GBP UK PSBR
12:30 CAD Canada Retail Sales
12:30 CAD Canada CPI (Core est 1.2% prev 1.5%)
13:45 USD US Markit PMIs
14:00 USD Existing Home Sales (MoM)
17:00 WTI Baker Hughes Rig Count
18:00 USD Monthly Budget Statement


This report is published every week as an email by MatrixTrade.com - you can sign up to receive it here. This blog is supported solely by advertising, so if any of them interest you, please click the links. If you want notification when the blog is updated, please follow me on TwitterFacebookStocktwits or Linkedin (all open in separate windows). Details of how I compile the report are here



Sunday, 10 March 2019

Week to Mar 7th


Growth forecast cuts in China, Europe and Canada, Worst US TB since 2008

Mon Mar 04
Despite encouraging remarks from President Trump at the weekend, and another call for a weaker dollar, a rally in China during the Asian session did not prevent optimism from fading in the US markets and SPX close down 0.4%. DAX and NKY followed suit although FTSE advanced as GBP faded some its Brexit hopes gains. Yields fells on stock-bond rotation.
President Trump also called for a weaker dollar again, but this had no effect, with all currencies except JPY declining slightly, in line with the equity softening. Gold fell in line, although Oil managed to move up after Friday’s sharp fall.

Tuesday March 05
Mixed US data left equities directionless today. The situation was better in Europe after UK, German and Eurozone PMI beats at 0855, and DAX and FTSE were both up slightly. The dollar benefited from continuing EUR weakness ahead of the ECB meeting, with DXY advancing 0.24%, and CAD and JPY also fell slightly, and GBP was flat, as was Gold. Oil was choppy but ended slightly up, whereas yields fell for a second day. AUD hardly moved after the rate hold.

Wednesday March 06
Markets faltered again today on the US trade balance miss at 1330, the worst deficit since 2008, together with the ADP miss at the same time, and all indices were down, even FTSE. Yields were down 3.2bp, and JPY was up in line with the risk off mood. DXY was flat (as was Gold), with small recoveries (after two days decline) in EUR and GBP balancing a sharp drop in CAD (only 9.1% of the basket) after gloomy growth forecasts from the BoC at 1500 and mixed Ivey PMIs at the same time. AUD dropped sharply by nearly 1% on the Australian Q4 GDP miss. Oil ended slightly up, with the usual choppiness around the EIA print at 1530. The headline missed, but the Gasoline estimate beat.

Thursday March 07
Another day, another problem. Following the record US trade deficit and the BoC forecast, today the ECB downgraded growth forecasts for the giant Eurozone, and more significantly reversed policy from tightening (the end of bond buying in December) back to easing by a new TLTRO program. The forecast was expected, the TLTROs were not, and EUR fell 1.27% during the next six hours. US, Japanese (futures), and UK equities accelerated their fall. DAX had a short currency related spike up and then joined them.

DXY had its best day since June 2018, and rose 0.75%. As you would expect EURJPY moved even more (down 1.18%). Other currencies moved down, although notably, CAD did not suffer from its usual risk aversion, having softened the day before. Gold was flat. Oil was up slightly again, staying in the 56.50-57.50 range it has held all week. Yield were down again, following the rotation principle rather than the stronger dollar. This is showing that the dollar was not really stronger, it is just EUR that is weaker, as evidenced by the move down in USDJPY.

Friday March 08
The February NFP miss (20k vs 180k) at 1330 gave us three bad days in a row. Small misses sometime push equities up on the theory that they will delay rate hikes, but this was the third-worst print since 2011, following a stellar (311k) January. No tweet from Trump today! Markets all slid down further, although there was a small rally in the last hour. Notably China fell 4% in Asia well before the NFP release.

DXY was down 0.26%, giving back a third of its Thursday gains, with all currencies up, in particular big moves up in JPY and Gold, and down in Oil in line with the equity fade, although the latter recovered somewhat into the close. The Canadian NFP beat had a surprisingly modest effect, with USDCAD only down 0.28%, no more than DXY as a whole. Yields were down 5bp on rotation or dollar tracking.


WEEKLY PRICE MOVEMENT
Despite the stronger yen, NKY was the biggest index decline this week. The strong yen also made shorting GBPJPY (down 2.35%) the best forex trade of the week. Cryptos went to sleep again after a brief burst of activity last week. Another mixed week for FANGs with a surprisingly strong performance from FB.



Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on UUP. The equity and index prices are now based on the cash close each day.


NEXT WEEK 
(all times are GMT)
(Calendar High volatility items are in bold)
  • Yet another Brexit ‘high noon’
  • BoJ Rate Decision
  • US Inflation release
  • US/Europe DST disconnect

Monday March 11
Today is the first day of the bi-annual one-hour disconnect between the start of daylight saving (summer) time in North America and Europe. The first effect is the Retail Sales print, an hour earlier for European traders, coming after the worst figure since 2001 last month. Our times remain on GMT, as they will when Europe enters DST.



21:45 NZD NZ Electronic Card Retail Sales (Sunday)
00:00 EUR Eurogroup meeting (all day)
07:00 EUR Germany Industrial Production/Trade Balance
12:30 USD US Retail Sales Jan (Control Group est 0.6% prev -1.7%)
13:00 GBP BoE Haskel speech

Tuesday March 12
Today, we have another attempt by embattled UK PM Theresa May to get her Brexit deal through the British Parliament. The vote seems likely to fail again, at which point the saga moves to later votes in the week. US inflation (one leg of the Fed’s dual mandate) will inevitiably affect USD if it is well off estimates. Fed Chair Powell is due to speak at some time today (unconfirmed).

00:00 EUR EcoFin Meeting (all day)
02:15 CNY China FDI
06:30 AUD RBA Debelle speech
09:30 GBP UK Industrial/Manufacturing Production
09:30 GBP UK GDP MoM
12:30 USD US CPI (Core YoY est 2.1% prev 2.2%)
13:45 USD Fed Brainard speech
19:00 GBP UK Parliamentary vote on Brexit (time approx)
20:30 WTI API Oil Stock

Wednesday March 13
Provided the Tuesday vote fails (as expected), a (free) vote by UK MPs is expected to on whether it is acceptable to exit on Mar 29 without a deal. This is designed to be rejected, and almost certainly will be.  In the middle of this, the UK Spring Statement (Budget) is announced, with possible tax changes. A new US report, the unwieldy-titled Nondefense Capital Goods Orders ex Aircraft has been marked by commentators as important, more so that the normal Durable Goods release at the same time.

10:00 EUR Eurozone Industrial Production s.a. (MoM)
12:30 USD US Core PPI
12:30 USD US Durable Goods
12:30 USD US ND Capital Goods (est 0.1% prev -1%)
12:30 GBP UK Budget Report (time approx)
14:30 WTI EIA Oil Stock

Thursday March 14
If the two previous votes are rejected, today’s British Parliament vote is crucial. This will be to extend the exit date (probably to May 23). There may be amendments for a longer delay, or even a second referendum (polls suggest a new people’s vote would cancel Brexit). This is the least certain and therefore potentially the most volatile for GBP. China’s Industrial Production figures are important, given reactions to recent Chinese data. There is a rate decision on UAH (0.5% cut expected)

00:00 AUD Aus Consumer Inflation Expectations
02:00 CNY China Retail Sales/Industrial Production (YoY)
07:00 EUR Germany CPI (est 1.% prev 1.7%)
12:30 USD US Jobless Claims
14:00 USD US New Home Sales (MoM)
21:30 NZD Business NZ PMI
22:50 CAD BoC Wilkins speech

Friday March 15
After growth downgrades elsewhere last week, traders will be listening carefully for any similar views from the BoJ, so for once, this normally unimportant rate decision and statement may cause some JPY volatility. The Michigan Sentiment Index is estimated to fall further. The miss two weeks ago caused a sharp fall in SPX, and another could do the same.

02:00 JPY BoJ Rate Decision/Statement (est -0.1% hold)
10:00 EUR Eurozone CPI
13:15 USD US Industrial Production (MoM)
14:00 USD Michigan Consumer Sentiment Index (est 93.0 prev 93.8)
18:00 WTI Baker Hughes Rig Count


This report is published every week as an email by MatrixTrade.com - you can sign up to receive it here. This blog is supported solely by advertising, so if any of them interest you, please click the links. If you want notification when the blog is updated, please follow me on TwitterFacebookStocktwits or Linkedin (all open in separate windows). Details of how I compile the report are here