Saturday, 21 November 2020

Week to Nov 20th

Deja vu on vaccine, First ATH for DJIA since Feb, Inside weeks in all asset classes

There was a sense of deja vu this week as another successful vaccine candidate, this time from Moderna, pushed markets up firmly on Monday to new highs, but from then, markets retreated and consolidated again, as the world seems to progress but cannot shake COVID. All indices moved less than 1% and (except FTSE) reported inside weeks. We also saw inside weeks in DXY, Gold, Bonds and Oil, probably the first time for years that this has happened across all asset classes. The dollar merely reversed last week’s move and DXY has traded in a 3% range, and largely in a 2% range since July. Similarly Gold stayed in the 6% range it has occupied since August.

Mon Nov 16

There was a sense of deja vu today, as MRNA announced that their vaccine was “95% effective”. There was the immediate pre-market in DJI futures but not in NDX futures. Unlike last week, though, the effect persisted all day and SPX closed up 1.2% at a new ATH, as DJIA for the first time since February. The small-cap RUT also hit an ATH, and Oil and yields (inverse to bond prices) were up in line. Other world indices followed suit. Although briefly spiking up on the vaccine news, the dollar retreated to end the day down, following the pullback which started last week, and still within the 2% the greenback has followed since July.

Tuesday November 17

The Retail Sales miss at 1330, and general coronavirus concerns resulted in a slight decline today in markets. SPX fell a little more than NDX. Oil was flat on the day. The dollar continued to pull back, and JPY outperformed in line with the equity move, as did bonds, which advanced. Gold’s reaction, a decline of 0.37% did not follow either equity or dollar trend, but appeared, as we will see later in the week, to be treating the market as still (vaccine) risk-on. We have written before about how Gold sometimes detaches itself from intermarket forces.

Wednesday November 18

Markets tried to rally today, but collapsed in the US afternoon session, with SPX giving up 2.1% from the point Europe closed (up). This may have been a reaction to NYC announcing a new schools closure due to COVID-19. Sentimentally, anything in the Big Apple is going to have more of a reaction. The main index was 1.2% down on the day (NDX down 0.8%). The dollar was down yet again, but reversed from 92.20 support (at which point there was slight EUR resistance at 1.1890). Yen was the largest gainer, in line with stocks. Oil was up on the EIA beat at 1530, and although it pulled back, the black stuff still managed a green candle for the day. Bonds were flat, and Gold once again ignored the dollar and markets, and fell.

Thursday, November 19

After Wednesday’s sharp drop, there was a bounce back today, and markets were slightly up, (NDX outperformed) although only in the final US hour, meaning Europe closed red. Oil and yields were up in line. We are seeing a pattern where good news pushes the market up, but this quickly fades. Note however, that unlike the dollar, and even NDX, SPX and DJIA are starting to break out to new levels. The dollar was down again today, as was Gold and yields, arguably in line with equities

Friday, November 20

A familiar pattern again today, markets tried to rise, but collapsed into the close with little difference between SPX and NDX, as TreasSec Mnuchin decided not to extend several emergency lending facilities set up by the Fed. The dollar bounced again off 92.20, and ended the day slightly up. Gold and Bonds were up in line with the equity move. Oil had its fifth day of gains, making 4.05% up on the week.


A very flat week with no index moving more than 1%, the largest move being SPX. Forex was also quiet with NZDUSD being the strongest mover. EURUSD posted an inside week. FANGs were exciting again with BTCUSD putting on 14.2% in sight of its amazing 2017 high. The crypto-asset BTCUSD has risen 76% in two months. FANGs reflected equities generally and were largely flat.

My GBPUSD short failed again, this time costing me 0.65% taking my running total to 8.44% (21 of 39 wins). I have given up trying to short it, and this week I am selling EURGBP.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on DXY. 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)

  • Thanksgiving short week
  • Black Friday
  • Possible sentiment change
  • US Durable Goods and GDP

Monday November 23

CB speeches today from BoE Haldane at 0930, and Fed Daly and BoC Gravelle later in the day. Markets are closed in Japan for Worker’s Day.

22:00 Aus Commonwealth Bank PMIs (Sunday)

08:30 Germany Markit PMIs (Mfr e55.1 p58.2)

09:00 Eurozone Markit PMIs (Comp e49.3 p50.0)

09:30 UK Markit PMIs

13:30 Chicago Fed National Activity Index (Oct)

14:45 US Markit PMIs

Tuesday November 24

A quiet day for data,. BoE Haskel speaks at 1100, with Fed Williams at 1700.

00:30 Aus Imports/Exports/TB

02:30 RBA Debelle speech

07:00 Germany Q3 GDP

09:00 Germany IFO Sentiment Reports

12:05 BoJ Governor Kuroda speech

14:00 US Housing/Home Price Indices

15:00 US Consumer Confidence(Nov)

Wednesday November 25

A raft of US number at 1330 is the busiest data point of the week. FOMC Minutes will of course also be closely watched, but today marks the effective end of the week.

09:00 EU Financial Stability Review

13:30 US Durable/ND Capital Goods (NDC e0.5% p1.0%)

13:30 US PCE/Personal Income

13:30 US Jobless Claims

13:30 US Q3 Prelim GDP (e33.2% p33.1%)

15:00 Michigan CSI

15:00 New Home Sales (MoM)(Oct)

15:00 UK Autumn Forecast Statement (time approx.)

19:00 FOMC Minutes

Thursday November 26

Today is Thanksgiving and US markets are closed. There are rate decisions in Sweden (SEK is part of the DXY basket) and South Korea, but all market activity is expected to be muted.

07:00 Germany Gfk Consumer Confidence Survey

12:30 ECB MPC Minutes

23:30 Tokyo CPI

Friday November 27

Today is retail sales day Black Friday. Also US markets are closed for a half-day as the holiday season starts. There is a rate decision in Colombia.

10:00 Eurozone Consumer Confidence

10:00 Eurozone Business Climate(Nov)

Sunday, 15 November 2020

Week to Nov 13th

Rally on vaccine news, rotation out of tech, Biden wins Presidency

In a week that saw a new US president on the same day that a working vaccine was announced, cyclical and COVID-damaged equities rose to all time highs, at the expense of tech stocks to a degree. European stocks did particularly well. On the vaccine announcement at 1145 Monday, DJIA futures shot up by 4% in a few seconds. The dollar and Oil followed the rally at the expense of Gold.

The rotation had started to unwind by the end of the week, and it is likely that tech will outperform in the coming days, as the market separates the vaccine view (all good) from the election view, and in particular whether the outgoing Congress will agree a stimulus package, or carry on fighting.

President-elect Biden has won in Georgia this weekend, but the Senate race in that state seems certain to go to January run-offs. However, the Democrats would have to win both to control the upper chamber, and this is seen as extremely unlikely.

Mon Nov 9
Today PFE announced that their vaccine candidate was 90% successful, the best progress report so far in COVID vaccine research. The response was immediate but not across the board, with DJI futures leaping 4% in seconds, and rising quickly to 5% but there was no equivalent move from NDX futures, which in fact fell. This was a clear rotation into COVID-damaged stocks, and was also seen in Europe in DAX and FTSE. There was a clear risk-on aspect, Gold, bonds and JPY fell sharply, as the dollar also surged, as did Oil. Later in the day SPX and DJI gave up some of these gains, although the other asset classes did not.

Co-incidentally of course, Joe Biden became 46th US President over the weekend, and who knows, history may record that markets surged on his election. But that was not the reason.

Tuesday November 10

More rotation today, with a flat SPX being flanked by a rising RUT (small caps) versus a further fall in NDX. DAX was also flat, although FTSE managed another rise, even against a rising pound. Oil was up, anticipating a transport recovery. Pandemic winners such as AMZN and ZM fell particularly hard, as investors imagined an end to the COVID world. The dollar was also flat, allowing Gold to recover slightly, but bonds continued to fall.

Wednesday November 11

Two days of rotation out of tech was reversed today as NDX rose 2% against only 0.8% for SPX. In Europe DAX was flat like yesterday, but once again FTSE managed to rise, this time against a falling pounds. Oil was up in line. The dollar took another leg up pushing Gold down. Bonds rose in line with the equity reversal.

Thursday November 12

After three days of rising markets took a breather today, following a US CPI miss, traders were reminded that COVID is still with us, and cases are not falling, meaning a rising second wave (and its costs) may come before the vaccine. All indices and Oil were down, and Gold, JPY and bonds were up. The dollar was flat overall with a slight uptick in EUR balanced by a sterling fade.

Friday November 13

Markets rallied again today, with the rotation back into tech continuing, again on the vaccine, but maybe also an election relief rally, as SPX and DJIA made new closing all-time highs for the first time since Sep 2. Oil and yields were up in line. Gold was up on a weaker dollar down across the board.


Another strong week with FTSE outperforming, without the help of the currency. The strongest currency was NZDJPY up 2.4%, but crypto although rising, did not outperform stocks. FANGS were definitely out of fashion and underperformed NDX as a whole.

My GBPUSD short failed. However the pair was only up 0.21%, taking my total to 9.09% (21 wins out of 38). I still think sterling will come unstuck and I am shorting cable again.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on DXY. 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)

  • UK, Eurozone and Canada inflation
  • UK, US and China Retail sales
  • Heavy CB speaker roster
  • Option Expiration week

Monday November 16

BoJ Masai speaks today, as does RBA Kent, and BoE Haskel. Markets are closed in India.

23:50 Japan GDP Q3 (QoQ e4.4% p-7.9%) (Sunday)

02:00 China Retail Sales (YoY e5.0% p3.3%)

08:40 RBA Governor Lowe speech

19:00 Fed Deputy Chair Clarida speech

Tuesday November 17

BoE Ramsden and Fed Williams speak today. There is a rate decision in Hungary. Markets are closed in Czechia and Slovakia.

00:30 RBA Meeting Minutes

13:30 US Retail Sales (Control MoM e0.5% p1.4%)

14:00 BoE Governor Bailey speech

14:15 US Industrial Production (MoM)(Oct)

19:00 BoC Governor Macklem speech

22:00 RBA Governor Lowe speech

23:50 Japan Imports/Exports/TB

Wednesday November 18

BoE Haldane, Fed Williams and BoC Wilkins speak today, and there is a DE10Y bond auction, and a large US auction of $27B on. Markets are closed in Latvia, Morocco, and Oman.

07:00 UK CPI (YoY e0.6% p0.5%)

10:00 Eurozone CPI

13:30 US Building Permits/Housing Starts

13:30 Canada CPI (BoC Core YoY e0.9% p1.0%)

Thursday, November 19

There is an EU leaders virtual summit meeting today

00:30 Aus NFP/UnEmployment (Jobs e-30k p-29.5k)

13:30 US Jobless Claims

13:30 Philly Fed Mfr Survey

15:00 US Existing Home Sales

23:30 Japan National CPI

Friday, November 20

Today is November option expiration date. A physical G20 meeting starts today in Riyadh and lasts all weekend. today and tomorrow. Markets are closed in Brazil.

00:30 Aus Retail Sales

01:30 PBoC Rate Decision/Statement (e3.85% hold)

07:00 UK Retail Sales

07:00 Germany PPI

13:00 German Buba President Weidmann speech

13:30 Canada Retail Sales

15:00 Eurozone Consumer Confidence

Sunday, 8 November 2020

Week to Nov 6th

Biden wins Presidency, Senate still undecided, Markets at consolidation extremes

The election came and went and by Friday night, we were no wiser as to the result. The failure of the Biden camp to produce a landslide means that a Democratic Senate is looking increasingly unlikely, and this potential future ‘brake’ on Democratic policy legislation helped stocks, particularly in energy, rise all week. In general price/action was a reversal of last week in all asset classes, meaning the COVID/election uncertainty consolidation continues. The dollar fell hard, with DXY’s Friday close the lowest since August, and the second lowest close since April 2018.

The Biden win came in over the weekend, but the Senate color is still unknown because of the Georgia results. Note that the Georgia special election will certainly go to runoff as there were no primaries and thus multiple GOP and Democrat candidates. This is all priced in, so once again, something new (a vaccine, the next stimulus package, a post-Trump Republican policy shift) is needed to push markets out of the SPX (3230-3580 10%) and DXY (92.00-94.50 2.8%) ranges they have been in for months.

Mon Nov 2

We mentioned previously that a Republican Senate was regarded as good for markets, to water down any left-wing Democrat policy ideas, and as polls start to show this as a real possibility, markets started to fall, helped by a string of manufacturing PMI beats today. The dollar was flat today, as a slightly declining euro was balanced by a sharp uptick in CAD, following Oil’s 4% rally. The rally did not prevent haven assets Gold and bonds from counterintuitively also rising, and JPY was flat.

Tuesday November 3

More of the same today, with SPX up 1.8% and other indices following suit, with Oil up in line. Yields rose to 0.882% after briefly touching a four month high of 0.896%.The dollar had its worst day since August down 0.6%, causing Gold to rise. All due to increase election volume and therefore volatility.

Wednesday November 4

As the election night went on, there was surprisingly little equity futures volatility as you can see from the chart. The only noticeable move was at 0220GMT when Trump won Florida, which caused a sharp uptick in USD and bonds (and drop in Gold), although this was quickly reversed. Overall, it was a third strong day on risk-on, with NDX outperforming, and Oil up in line. The dollar spike meant the greenback closed flat overall as did Gold, whereas bonds held onto their gains.

Thursday November 5

The lack of volatility in equities was quite surprising given such a momentous event as the election. SPX and the others continued to gently rise today, although Oil topped out and pulled back to close the day slightly down. The dollar took another sharp leg down, meaning a big (2.3%) move up in Gold. Bonds were flat on the day.

Friday November 6

Despite a blowout NFP, the markets took a breather today, and SPX was flat, as were most other indices, although Oil came off slightly. The dollar continued to push down, and closed at a three month low, and the second lowest close since April 2018, giving Gold another slight boost. Bonds also came off slightly. The week ended with SPX new the top and USD at the bottom of the consolidation ranges seen since early summer.


A huge recovery for DAX but the top-performing index in this very strong week was NDX up 9.39%. The strongest currency was AUDUSD, and crypto had its best week for months, with moves reminiscent of the old days. FANGS were up broadly in line with NDX.

My CADJPY pick (a risk on pair) worked and added 0.72% to my running total, now 9.3% in 21/37 wins. This week I am selling GBPUSD. The dollar is at support, and Brexit fatigue must kick in at some point.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on DXY. 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)

  • Senate race undecided
  • COVID still dominates
  • US, German and Chinese inflation
  • 11 Central Bank speeches

Monday November 9

A new week without an Senate election result, and nothing much on the calendar to affect things.

07:00 Germany Trade Balance s.a.(Sep)

10:35 BoE Governor Bailey speech

14:00 BoE Haldane speech

Tuesday November 10

Another day with no significant US news. Again the election will dominate.

01:30 China CPI (YoY e0.8% p1.7%)

07:00 UK Claimant Count/UnEmp (UnEmp e4.8% p4.5%)

10:00 Germany ZEW Sentiment Surveys

19:00 Fed Quarles speech

22:00 Fed Brainard speech

Wednesday November 11

Today is Veterans Day, and markets trade for a half-day in Canada, but the US and Europe trade as normal, although banks are closed, so some markets (forex) might be quieter.

01:00 RBNZ Rate Decision (e0.25% hold)

Thursday November 12

The busiest news day of the week, with US inflation being the key print. Dow giant DIS and NDX heavyweight CSCO report after the bell. There are rate decisions in Mexico and Egypt.

00:00 Aus Consumer Inflation Expectations

07:00 UK GDP Q3 Prelim (QoQ e15.8% p-19.8%)

07:00 Germany CPI (YoY e-0.5% p-0.5%)

08:00 BoE Governor Bailey speech

09:00 Eurozone Economic Bulletin

10:00 Eurozone Industrial Production

13:30 US CPI (Core YoY e1.7% p1.7%)

13:30 US Jobless Claims

18:30 BoC Wilkins speech

19:00 Fed Williams speech

19:00 US Monthly Budget Statement

Friday November 13

End of a lacklustre week on data, but an enormous one in politics.

10:00 Eurozone Q3 GDP Prelim (QoQ e12.7% p12.7%)

10:00 ECB Weidmann speech

12:00 Fed Williams speech

13:30 US PPI

14:00 BoE Tenreyro speech

15:00 Michigan CSI (e82.0 p81.8)

16:00 BoE Governor Bailey speech

Sunday, 1 November 2020

Week to Oct 30th

US surge in COVID cases, Markets pull back sharply, FANGs disappoint


The continuing uncertainty consolidation resulted in markets pulling back by around 6%, but still holding above the September low. The move was probably exacerbated by a sharp increase, and record number, of daily new COVID cases, as there was no real change in the stimulus or election situation.

Next week is unique, in that both NFP and the Fed rate decision are relatively unimportant as all eyes are on the election, both for the White House and the Senate majority. A unified White House and Congress can only be a good thing for markets.

Monday October 26

Stocks today suffered their biggest one-day drop in a month, on fears that COVID cases, which had been rising sharply all last week could mean more economy-damaging safety measures. Oil fell in line. The dollar continued upwards in the consolidation range since August, and Gold fell in line. We have seen Gold move inversely to the dollar, rather than to equities for a while now. Bonds were up, and JPY was flat in line with equities.

Tuesday October 27

The market paused today, with SPX down 0.3% but NDX up 0.6%. The Capital Goods beat was not enough to remove the COVID gloom. Although DXY was flat, the dollar fell against all currencies except EUR, and so Gold was up. Bonds were up again, and Oil staged a small recovery. MSFT beat on estimates, but lowered guidance, and the shares fell 2% AH.

Wednesday October 28

Another sharp leg down today by equities and Oil as coronavirus cases soared on both sides of the Atlantic. The drop was double that of Monday, and at 3.5%, the worst day since June. The dollar was up again, although notably not against JPY. Gold once again appeared to correlate to equities, but in fact was pulling back on the stronger dollar. Bonds were flat on the day.

Thursday October 29

The strong GDP print,+33.1% a beat, and the highest quarterly number on record was enough, coupled with bounce back from Wednesday’s sharp fall was enough to push equities up today, and a message from President Trump that he was preparing a “big fiscal package” (if he is re-elected, of course, a big if). This, plus a dovish ECB meant USD was up again. Gold and bonds were down in line with the equity move, and the dollar. Oil however, was down again, on concerns about COVID-depressed demand.

The FANGs duly reported after the bell, and although all beat on earnings and revenue, forward guidance concerns and poor customer numbers meant all except GOOGL fell AH.

Friday October 30 

Markets were down again today, closing the worst week since March, driven by the ‘third wave’ of COVID cases, with the highest daily new cases since the pandemic began. Added to this was of course election uncertainty, and to finish thing, poor reports from the FANG giants that lead the market. Oil followed suit. The dollar was more or less flat, so Gold followed the equity lead and rose. However, bonds were down again.


DAX crashed hard this week, down 8.61%, against ‘only’ 6% in the US. The strongest forex mover was EURJPY down 1.65%. Cryptos were unusually, with BTC and ETH moving in the opposite direction. FANGS of course fell very hard, with only GOOGL unscathed.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on DXY. 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)

This must be a unique week, with both NFP and a Fed rate decision being relatively unimportant as all eyes are on the election, both for the White House and the Senate majority. A unified White House and Congress can only be a good thing for markets.

  • US Election
  • Non-farm payrolls
  • Fed Rate Decision
  • New month

Monday November 2

The new month opens with Manufacturing PMIs all day, but clearly all eyes will be on the election, looking past the assumed Biden win to whether the Democrats take the Senate. US Daylight Savings time ends, and is synchronous with Europe again. Markets are closed in Brazil and Mexico.

00:00 Aus TD Securities Inflation

01:45 China Caixin Mfr PMI

08:55 Germany Markit Mfr PMI

09:30 UK Markit Mfr PMI

14:30 Canada Markit Mfr PMI(Oct)

14:45 US Markit Mfr PMI(Oct)

15:00 US ISM Mfr PMI (e55.6 p55.4)

Tuesday November 3

Today is the long awaited US Presidential election, although results will not be known until well after the closing bell. Voting closes at 8am Pacific Time, which is 2300EST/0400GMT. Results are normally in within an hour, unless its very close, and futures will be trading throughout. Markets are closed in Japan.

03:30 RBA Rate Decision/Statement (e0.1% p0.25%)

15:00 Factory Orders (MoM)(Sep)

21:30 AiG Performance of Construction Index(Oct)

22:00 Commonwealth Bank Services PMI(Oct)

23:50 BoJ Monetary Policy Meeting Minutes

Wednesday November 4

Everything today, and probably for the rest of the week will be about the election result, although the ADP print would upset things if wildly out. Markets are closed in Russia.

00:30 Aus Retail Sales (e-1.5% p-1.5%)

01:45 China Caixin Services PMI

08:55 Germany Markit PMI Composite

09:00 Eurozone Markit PMI Composite

09:00 EC Economic Growth Forecasts (time approx.)

13:15 US ADP Employment Change (e526k p749k)

13:30 US Trade Balance(Sep)

14:45 US Markit Services/Composite PMI

15:00 US ISM Services PMI (e57.8 p57.8)

Thursday November 5

Given the election, and the fact that CME Fedwatch has a 100% expectation of a hold for this meeting and for December, today’s Fed meeting is likely to be one of the least important for markets this year.

00:30 Aus Imports/Exports/TB

06:00 Germany Factory Orders

10:00 Eurozone Retail Sales (e2.8% p3.7%)

12:00 BoE Rate Decision/Statement (e0.1% hold)

12:30 BoE Governor Bailey speech

13:30 US Jobless Claims

15:00 ECB Weidmann speech

19:00 Fed Rate Decision/Statement (e0.25% hold)

19:30 FOMC Press Conference

Friday November 6

The NFP figure continues to taper down, with little more than 50% of the March/April losses recovered, but will probably be overshadowed by the election result.

00:30 RBA MPC Statement

07:00 Germany Industrial Production

13:30 US NFP/AHE/UnEmp (NFP e700k p661k)

13:30 Canada NFP/AHE/UnEmp

14:00 BoC Gov Macklem speech

15:00 Canada Ivey PMI