Sunday, 24 May 2020

Week to May 22nd

Opening surge on vaccine hopes, Ranging all week, US-China tensions

The week started with a strong gap up ad surge on hopes of a potential COVID-19 vaccine from MRNA (whose stock gapped up 30%), and positive comments from Fed Chair Powell but failed to advance much further as poor data (including another new 2.5m Jobless Claims) and rising US-China tensions tempered enthusiasm.  However, Monday’s gains were not lost, and Gold and the yen fell, showing some degree of positive sentiment.
Monday is Memorial Day, and also a holiday in the UK shortening the final week of May which has been more flat than bearish this year. Earnings season is over,  and there isn’t much news other than another preliminary read of US GDP (QoQ est -5%). Look out for any further war of words between the US and China, and of course any COVID-19 second wave effect as many people exit lockdown.

Mon May 18
Markets gapped up hugely over the weekend on new of a potential COVID-19 vaccine from MRNA (whose stock gapped up 30%), and carried on rising all day after Fed Chair Powell told CBS 60 Minutes “there’s a lot more we can do to help the economy”. SPX closed at a two-month high. Oil rose sharply in line with equities. The haven trio bonds, gold and JPY were sharply down, the latter even against an otherwise falling dollar, following the dovish Fed remarks. A classic risk-on day. 

Tuesday May 19
Initially, markets held Monday’s gains as TreasSec Mnuchin confirmed the governments commitments to COVID-19 bailouts. However we had turnaround Tuesday into the US close, as some profit was taken. (Non-US indices were still up, as they close earlier). MRNA stock had been falling since the gap up. Gold and Bonds also reversed back up, although JPY continued to fall, again the only currency to do so, which can also be put down to forex being mainly traded in London hours.

Wednesday May 20
Markets were back up again today, although only matching Tuesday’s high, following positive Fed minutes indicating further support for the economy, which of course means printing more money, and the dollar was down again everywhere except GBP, following the UK inflation miss at 0600. The equity push was led by FB and AMZN which made new all-time highs. Oil was up in line. Oddly Gold and bonds continued upwards, the latter possibly on the new US 20-year bond auction

Thursday May 21
Pessimism started in Asia, with HSI down 3.4% on news of a new Chinese ‘national security’ law in Hong Kong, aimed at quelling protest, and Donald Trump claimed China was behind a disinformation and propaganda attack on the US. This was followed by another depressing Initial Jobless Claims report of 2.4 million, just one of many bad reports, for example New Home Sales hit a 10-year low. Markets were down everywhere. Oil ignored all this, and was up following the EIA stock report beat.

The dollar broke its three-day losing snap, and rose against all currencies (although it was practically flat against JPY). Bonds were flat as well, although Gold, reacting to the dollar reversal, was down 1.46%.

Friday May 22
US and European markets initially dipped on Friday but ended the day roughly flat going into the long weekend. By contrast the HSI was down 5.6%, its worst day in five years on China’s new laws. SecState Pompeo called the plans a “death knell” for autonomy in the territory, and this was reflected in Gold and bonds, both up. Oil also pulled back after gaining all week. USD was again up across the board, except for JPY which was flat, in line with the earlier dips.

Indices had a strong week, although all the beginning, and the biggest riser was DAX. NZDJPY was the strongest performer up 3.31%. Crypto had a fairly flat week, and FANGs were rather variable swinging from a 5.48% loss on NFLX to a 11.4% gain on FB.

My choice last week of NZDCAD paid off, up 2.04%. 16 weeks, 7 wins, net profit 6.45%. I am still bearish about equity markets, so I will sell EURJPY this week, also considering the new EU pandemic plan, which will be expensive. (My other choice was to sell EURUSD, but you can never tell with USD when markets fall).

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. Recoveries in line were seen in most FANGs, but not NFLX, which has not really fallen like the others.

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

  • Memorial Day 4-day week
  • US and Canada GDP
  • Expect more China tension
  • End of month
Monday May 25
Markets are closed today in the US and the UK, so forex will be calm as well as equities, unless of course something happens in Asia. Ramadan ended this weekend, so there may be increased activity from Islamic countries. There are rate decisions in Romania and Israel.

06:00 EUR Germany Q1 Final GDP
08:00 EUR Germany IFO Business Sentiment
17:30 CAD BoC Governor Poloz speech
22:45 NZD NZ Imports/Exports/TB

Tuesday May 26
A quiet day on news, so COVID-19 and China will drive the markets. There is a rate decision in Hungary. Markets are closed in Indonesia.

06:00 EUR Germany Gfk Consumer Confidence Survey
12:30 USD Chicago Fed National Activity Index
13:00 USD US Housing/Home Price Indices
14:00 USD US New Home Sales/Consumer Confidence
14:30 USD Dallas Fed Manufacturing Business Index
21:00 NZD RBNZ Financial Stability Report

Wednesday May 27
The EU presents a continent-wide pandemic recovery plan today. Remember that most of Europe is borderless. The debate will be, as ever, whether richer countries should support poorer ones.

Here is a useful chart from Reuters showing the effect of COVID-19 policies on EURUSD, both from the Fed and ECB.

There is little scheduled news.

08:00 EUR EU Financial Stability Review
14:00 USD Richmond Fed Manufacturing Index

Thursday May 28
Today is the heaviest news day, with the 1230 batch of US data, the Jobless Claims being the most important. There are rate decisions in South Korea and Poland.

12:00 EUR Germany Prelim CPI (YoY e0.6% p0.8%)
12:30 USD US ND Capital Goods (p-0.8%)
12:30 USD US Prelim PCE QoQ
12:30 USD US Initial Jobless Claims (May 22) (e2.0M p2.4M)
12:30 USD US Q1 Prelim GDP (Annualised e-5.0% p-4.8%)
12:30 CAD Canada Current Account
14:00 USD US Pending Home Sales
15:00 USD US EIA Oil Stocks
23:30 JPY Tokyo CPI (Core YoY e0.1% p-0.1%)
23:30 JPY Japan Jobs/Unemp
23:50 JPY Japan Industrial Production (p-5.2%)

Friday May 29
The last trading day of the month may bring volatility, especially as “Sell in May” does not appear to have happened this year. There are rate decisions in Colombia and Chile.

06:00 EUR Germany Retail Sales
09:00 EUR Eurozone CPI (Core YoY e0.9% p0.9%)
12:30 USD US Prelim PCE (MoM and YoY)/Personal Income
12:30 CAD Canada Q1 Final GDP (Annualised p0.3%)
13:45 USD Chicago PMI
14:00 USD Michigan CSI

Sunday, 17 May 2020

Week to May 15th

Markets turn down, Worst Retail Sales ever, Earnings season pause and Opex

In a week that saw reality bite, with WHO reporting a (so far small) second wave in countries which are furthest in lockdown release, and Fauci’s gloomy Senate testimony, the sharp move down for markets came when Fed Powell said that more needs to be done to support the economy. SPX was down 5.46% at its lowest point in the week, although some relief came in the last couple of days. There was notable sector divergence, with NDX managing to break even for the week, whereas lockdown-affected sectors like aviation fell heavily, AAL down 10.85% for example. Oil rose all week, but of course from a very low base, but a clear and constant move up in yen, gold and bonds, and to an extent the dollar, showed how any equity rallies are being driven by cheap or free money, rather than solid earnings hopes.

Next week has plenty of events, the retail phase of earnings season, led by giant WMT, Senate testimony on Tuesday and a Thursday speech by Fed Chair Powell, both on COVID-19 and the FOMC minutes, a Chinese interest rate decision, inflation from Japan, the UK and Canada, and another weekly set of no doubt depressing PMIs from Europe. But the patchwork reopenings, and arguments against will probably take centre stage, as traders continue to try and work out the endgame.

Mon May 11
A mixed day today with DJIA down but NDX up, as comments about reopening from New York governor Cuomo were balanced by general concern about the cost of the lockdown. The mood was positive overall, with Gold, bonds and JPY clearly down. USD was up across the board. Oil was flat on the day.

Tuesday May 12
US health official Dr Fauci warned today that a vaccine is still a while off, and it was a Turnaround Tuesday, as stocks fell around 2%, although AAPL outperformed, up 1.14% on the day. The turnaround was reflected in Gold, Bonds and JPY all up. The dollar was also down after the US CPI miss. Oil was surprisingly up, although this was not reflecting in the USO ETF which has failed to fully track the price of Oil recently.

Wednesday May 13
The downward trend continued today after Fed Chair Powell said that more needs to be done to support the economy, with airlines and banks falling particularly hard. Again the triple haven set (Gold, Bonds, JPY) were up, the latter being the only currency to gain against the dollar. Oil had a flat day, with reaction to the equity market being balance by a strong trend up from this historic low.

Thursday May 14
Despite another shocking Initial Jobless Claims figure of nearly 3 million, markets rallied today after an initial drop, as markets tested but ultimately were supported by the May 4 SPX 2780 low, and closed over 1% up. Oil was up in line, and CAD followed it. However, Gold and bonds were also up, showing that sentiment had not necessarily changed. However, JPY was down on what was otherwise a flat day for USD.

Friday May 15
Markets dipped today and then recovered, ending up marginally green on the day (SPX was up 0.39%), as Thursday’s recovery rally continued despite the worst Retail Sales print in history. In fact, there was a element of sell the rumour buy the news as the XRT Retail ETF was up nearly 2%. There were also rumblings of the trade war reopening as China threatened to “restrict or investigate” certain US chipmakers if the US continues to block Huawei’s supply chain. Oil was up again and bonds and JPY were down in line with the market, although Gold carried on rising. The dollar was fairly flat overall.

Just to show you how this is still a sentiment-driven market, look how well the Google Trends search terms for a second wave (fear) and a vaccine (hope) correlate with the SPX price over the last few weeks. The trends are of course inverted on the left-hand chart.

All indices were down this week, with DAX the largest faller at 4.03%. The weakest currency was NZD and the strongest was the dollar, with NZDUSD down 3.32% the worst performer. Cryptos pulled back sharply in the line with the equity markets, and with Bitcoin finding $10,000 to be a barrier. FANGS generally followed the market, except for NFLX which outperformed.

My call to buy EURUSD initially paid off, but eventually failed, losing 1.37%. Fifteen weeks, six wins, net profit 4.41%. I think NZD should recover a little, and CAD may fall with Oil next week, so I am buying NZDCAD.

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. Recoveries in line were seen in most FANGs, but not NFLX, which has not really fallen like the others.

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

  • More lockdown release
  • UK, Japan, Canada inflation
  • Chinese rate decision
  • Powell Senate Testimony

Monday May 18
Like Mondays often are, today is quiet. The German BuBa monthly report is released. ‘BAT’ stock BIDU reports after the bell.  Markets are closed in Canada.

23:50 JPY Japan 20Q1 Prelim GDP (e-1.2% p-1.8%) (Sunday)

Tuesday May 19
Chair Powell’s Senate Health Committee testimony today is the star event. The retail phase of earnings season opens with DJIA components WMT and HD reporting before the bell. There is a rate decision in Indonesia. Markets are closed in Turkey.

01:30 AUD RBA Meeting Minutes
06:00 GBP UK Claimant Count/UnEmp/AHE (UnEmp e4.4% p4.0%)
09:00 EUR Germany ZEW Economic Sentiment Survey (e33.5 p28.2)
12:30 USD US Building Permits/Housing Starts
14:00 USD Fed Chair Powell testifies
14:30 NZD NZ GDT Milk Index

Wednesday May 20
The Chinese rate decision is probably the most important print of the day. The FOMC minutes may move things, but are foreshadowed by the Powell testimony on Tuesday. Retails earnings continue with TGT and LOW before the bell. As well as China, there are rate decisions in Thailand and Iceland.

01:30 CNY PBoC Rate Decision/Statement (e3.85% hold)
06:00 GBP UK CPI (YoY e0.9% p1.5%)
09:00 EUR Eurozone CPI
12:30 CAD Canada CPI (p1.6%)
14:30 WTI EIA Oil Stocks (May 15)
18:00 USD FOMC Minutes
18:00 CAD BoC Lane speech
23:00 AUD Aus Commonwealth Bank Manuf Prelim PMI
23:50 JPY Japan Imports/Exports/PB

Thursday May 21
Todays retail earnings reports before the bell are BBY, TJX and ROST. After the bell is NVDA. There are rate decisions in South Africa, Turkey and the Phillippines. Banks are closed the Nordic countries, Germany and France for Ascension Day, although markets are open.

02:30 AUD RBA Governor Lowe speech
07:30 EUR Germany Markit Manuf Prelim PMI (e40.0 p34.5)
08:00 EUR Eurozone Markit Composite Prelim PMI (e24.0 p13.6)
08:30 GBP UK Markit Services Prelim PMI (e22.1 p13.4)
12:30 USD Philly Fed Manuf Survey (May)
12:30 USD US Initial Jobless Claims (May 15) (p2981k)
13:45 USD US Markit Markit Prelim PMIs
14:00 USD US Existing Home Sales (MoM)(Apr)
17:00 USD Fed Clarida speech
18:30 USD Fed Chair Powell speech
22:45 NZD NZ Retail Sales (QoQ p0.7%)
23:30 JPY Japan National CPI (ex Food YoY e-0.1% p0.4%)

Friday May 22
A quieter day on releases. The third and largest of the ‘BAT’ stocks, BABA, reports today before the bell.

06:00 GBP UK Retail Sales
11:30 EUR ECB MPC Minutes
12:30 CAD Canada Retail Sales (MoM p0.3%)
14:30 EUR ECB Lane speech

Saturday, 9 May 2020

Week to May 8th

Lockdowns easing start, Worst unemployment since 1930s, Strong week for tech

Despite the worst NFP since the 1930s, the recovery of Oil, a transportation leading indicator, moves towards lockdown easing and the huge central bank stimuli around the world pushed markets higher this week, with tech outperforming as it often does. NDX is only 5% off its all-time high.

Although there is plenty of inflation data (directly and via proxies such as Retail Sales) next week, there is nothing momentous scheduled, and earnings season pauses prior to the retailer finale next week. It is likely that volatility will continue to decline as it has done for weeks now.

Mon May 4
Monday was a fairly quiet day with US indices ending flat. The day was V-shaped, which meant European indices missed the closing rally and were down on the day. (There were technical adjustments for the German DAX which was closed on Friday, but fell in futures). There was a sharp sell-off in airlines after Warren Buffett revealed that he had exited the sector. However lockdown-resistant tech companies outperformed. The currency picture was very mixed, with a 1.7% pullback in EUR, retracing last week’s gains, and a 1.25% advance for CAD, following Oil which was up 4.3%. Nevertheless, the early fall meant haven assets Gold, JPY, and Bonds were slightly up.

Tuesday May 5
News of some lockdown easing, and declining COVID-19 death rates, some more pharma vaccine news, and a strong move up in Oil led to a positive day in markets. The currency picture was the same as yesterday, with EUR falling to produce a green candle for DXY, despite CAD advancing again (following Oil). Bonds were down in line, but Gold ignored the haven rule, and advanced.

Wednesday May 6
Indices took a breather today, after the shocking minus 20.2 million ADP print, with DAX particularly hard hit after the 15.7% drop in factory orders, the worst figure since the 1970s. Oil also pulled back after its two-day run, despite the moderate EIA beat. All currencies except for JPY were down. Oddly, bonds were down, as was Gold.

Thursday May 7
Indices resumed their upward trend, with NDX turning positive for the year, but there were still signs of haven buying with Gold up 1.5% and Bonds up 0.61%, and although the dollar was up across the board (except CAD), the yen drop was weaker than other currencies. The new BoE Governor Bailey’s statement caused a brief GBP rally, although nothing in the larger picture. Despite a poor Ivey PMI print, CAD reverted to its mean, rising all week with the Oil recovery, although ironically Oil did not rise today. Such is the delay in asset correlation.

Friday May 8
The 75th anniversary of the end of World War II in Europe (with British and French markets closed) also brought the worst NFP print seen since the beginning of that war, and there was not even a wobble, such are today’s strange markets. The ‘unlock down’ trend continued with markets up well over 1%, and Oil up nearly 5%. The dollar was down generally, as EUR made a recovery. However CAD continued to fall, as unlike the US, the Canadian NFP, at minus 2M was much larger than the estimate, as was JPY which fell in line with Bonds and Gold to reflect equity risk-on. 

The strongest index was NDX, although this is partly to do with its closure on Friday. The largest forex move was EURAUD down 2.92%. Bitcoin enjoyed a third week of gains, although ETH, which had rallied in previous weeks did not join it. FANGs generally performed in line with NDX, showing that not all tech gains are narrowed into these popular stocks

My call to sell GBPAUD paid off, one of the larger movers at 2.47%. Fourteen weeks, six wins, and a running total of 5.78%. This week, I am taking a bigger chance and buying EURUSD.

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. Recoveries in line were seen in most FANGs, but not NFLX, which has not really fallen like the others.

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

  • Coronavirus sentiment dominates
  • Partial end to lockdown
  • US, China and German inflation
  • Earnings season pause

Monday May 11
A new week which again is likely to be sentiment driven. There is no significant scheduled news today. A number of small pharma companies report, but generally this week is a pause, with retail reporting next week. Markets are closed in a number of Islamic countries this week for Ramadan which continues until May 22. Russia is closed today for Victory Day.

Tuesday May 12
The inflation prints today look fairly modest in their declines, and will be compared with Retail Sales later in the week. Two Fed speakers today, Quarles at 1400 and Mester, the hawk at 2100, straight after the bell.

01:30 CNY China CPI (Apr) (YoY e3.7% p4.3%)
02:00 AUD Aus Budget Release (time approx.)
06:00 CNY China FDI (time approx.)
12:30 USD US CPI (Apr) (Core YoY e1.7% p2.1%)
18:00 USD Monthly Budget Statement (Apr)

Wednesday May 13
The NZ rate decision will be interesting, as the first from that country deep into the pandemic. UK GDP is of course only up to Mar 31, and so does not fully reflect the damage to the UK economy. NDX heavyweight CSCO and “BAT” stock (Chinese FANG) TCEHY report after the bell.

00:30 AUD Aus Westpac Consumer Confidence( May)
01:30 AUD Aus Wage Price Index (QoQ e0.5% p0.5%)  
02:00 NZD RBNZ Rate Decision/Statement (e0.25% hold)
03:00 NZD RBNZ Press Conference
06:00 GBP UK Industrial Production (Mar) (MoM e-5.8% p0.1%)
06:00 GBP UK 20Q1 Prelim GDP (QoQ e-2.0% p0.0%)
09:00 EUR Eurozone Industrial Production
12:30 USD US PPI
14:30 WTI EIA Crude Oil Stocks Change (May 8)

Thursday May 14
The Australian NFP estimate of minus 575k is only one third (population adjusted) of the US or Canadian figure. It will be interesting to see if this estimate is met. Otherwise the key print today is the US Initial Jobless Claims. There are rate decisions in Egypt and Mexico.

01:00 NZD NZ Budget Release
01:00 AUD Aus Consumer Inflation Expectations (May)
01:30 AUD Aus NFP/Unemp (NFP e-575k p5.9k) 
06:00 EUR Germany CPI (Apr) (YoY e0.8% p0.8%)
08:00 EUR Eurozone Economic Bulletin
12:30 USD US Initial Jobless Claims (May 8) (e2.5M p3.17M)
22:30 NZD Business NZ PMI(Mar)

Friday May 15
Monthly Option Expiration provides additional volatility today, but the key release is US Retail Sales.
02:00 CNY China NBS Press Conference/Ind Production/Retail Sales
06:00 EUR Germany 20Q1 Prelim GDP (e-3.8% p-3.8%)
09:00 EUR Eurozone Employment Change (YoY)(Q1) Prel
09:00 EUR Eurozone 20Q1 Prelim GDP (e-3.3% p-3.3%)
12:30 USD US Retail Sales (Apr) (Control Group e-3.9% p1.7%)
12:30 CAD Canada Retail Sales (Mar) (p0.3%)
13:15 USD US Industrial Production (MoM)(Apr)
14:00 USD US Prelim Michigan CSI (e68.0 p71.8)

Sunday, 3 May 2020

Week to May 1st

Lockdown starts to ease in some areas, EU hawks and Fed doves, Sell in May bites a day early

The week opened with news that many states, even New York, plan to re-open for business. NY Governor Cuomo is well-trusted in his plans. Earnings continued to be fair to moderate, and another remdesivir proved positive in the treatment of COVID-10. However, concern about elevated values, and another 3.8m initial jobless claims on Thursday, 300k more than estimate, caused a sharp collapse on Thursday, which continued Friday after President Trump started to blame China for the virus, and threatened new sanctions. Coupled with poor (AMZN) or absent (AAPL) forward guidance, indices which were 4% up ended flat for the week. Nevertheless indices booked their best calendar month since 1987.

The dollar fell all week in anticipation of and then reaction to Fed dovishness (additional measures) on Wednesday, followed by ECB hawkishness (no new QE) on Thursday. Haven assets were pulled both ways, and ended fairly flat, with Gold posting its first inside week since the COVID-19 market shock.

Next week sees some shifting in sentiment indicators. On the one hand, we do seem to have passed COVID peak (and even if there is a second wave, it won’t be immediate), and earnings are mostly done, but the mounting macro bad news crescendoes with Friday’s NFP, reflecting a full month of lockdown, and the worst estimate (2.1M) in history, way beyond the bottom of 2008. Add to this the “Sell in May” maxim and it is difficult to see anything good.

For the third week, we offer a table of major earnings estimates against current prices. The last column effectively shows the move in P/E ratio since the last ATH for that stock. As you can see, there is a distinct return to the trend where tech companies are more highly valued than other sectors, as you might expect given that anything to do with the internet has thrived through the lockdown. This is the final table in this series, as the bulk of major earnings are now released.

Mon Apr 27
Signs that several states, including New York are planning reopening of some parts of their economy gave markets a boost today, which were all up. The dollar continued its Friday decline, as traders were concerned about further Fed looseness, and were still worried about Oil, which fell sharply, although not as sharply as the USO proxy ETF, which dumped all its June futures and closed nearly 15% down on the day. Gold and bonds were both down in line with equities.

Tuesday April 28
Markets rallied in Europe today continuing yesterday’s trend, but then pulled back sharply on the US cash open, closing the futures gap, with tech fading most, possibly in anticipation of poor FANG results. The dollar followed a similar pattern, although the fall was sharper and all currencies were up against the greenback. The yen was up on additional BoJ stimulus, as were bonds, although Gold fell for a second day. Oil futures were flat, although the USO ETF was down again.

Wednesday April 29
The dollar was down again today on the GDP miss (-4.8% vs -4.0%) and a dovish Fed report, with further easing on offer, with a particular strong showing from commodity currencies AUD and CAD, and Gold was also up slightly. Another positive report on remdesivir helps to boost stocks, and a less than expected drop in GOOGL earnings the night before have indices their best day of the week, and GILDs own gain of 5.7% helped NDX to post a 3.5% gain on the day. Oil was up in line, and bonds were down.

Thursday April 30
The main event today was the ECB rate set meeting. Rates were unchanged, but the relatively hawkish outcome, with no further QE saw EUR soar with a consequent collapse of DAX. The effect spread with a similar rally in GBP and fade in FTSE. Some of this was of course also a further move out of USD following the previous night’s Fed. Also at the same time was yet another terrible Initial Jobless Claims figure, 3.8M (versus 3.5M estimated).

Equities had rallied on the Fed stimulus overnight, so the sharp fall meant a relatively modest red day in US equities and NDX, buoyed by index leader MSFT earnings the night before even managed a small gain. Oil was up in line (although not USO) and bonds were down. Gold was sharply down despite the other moves.

Another factor may have been end-of-month profit taking, as rotational funds change into defensives, ahead of the traditional change in sentiment at the end of April. Defensive ETFs XLV and XLP both outperformed SPX. Despite today’s move, SPX closed up 12.68% for the month, the best since 1987.

Friday May 1
Markets opened the new month after poor guidance from AMZN and none at all from AAPL. Also today the White House announced that China “will be held accountable” for coronavirus, and sanctions may be reintroduced. Sell in May certainly happened today, and stocks fell substantially, with markets down around 3%, despite the ISM Manufacturing PMI beat. Havens all responded as you would expect, with JPY, bonds and Gold up, and Oil, AUD and CAD down. Other currencies were mixed, with EUR adding to Thursday’s ramp whereas GBP retraced it.

The strongest index was DAX, although this is partly to do with its closure on Friday. Continuing Oil problems made CAD the weakest currency. As EUR was the strongest, buying EURCAD would have yielded 3.63%. Cryptos surged unlike FANGs whose variability reflected earnings.
My call to sell NZDJPY failed, the pair was up 0.21%. Thirteen weeks, five wins, and a running total of +3.31%. This week, I am selling GBPAUD.

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. Recoveries in line were seen in most FANGs, but not NFLX, which has not really fallen like the others.

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

  • Lockdowns may be selectively eased
  • Major earnings season pauses
  • Worst NFP estimate ever
  • UK and Australia rate decisions

Monday May 4
Focus now is on the reopening of the economy, which it increasingly seems will not be uniform. Today’s news is fairly light. Markets are closed in China for Labor Day

01:00 AUD Aus TD Securities Inflation
07:55 EUR Germany Markit Manufacturing PMI(Apr)
14:00 USD US Factory Orders (MoM)(Mar)

Tuesday May 5
The ISM Non-Manufacturing PMI is the first since the crisis, and the estimate is for a record low figure. Disney reports after the bell. Markets are closed in Japan and South Korea.

04:30 AUD RBA Interest Rate Decision (e0.25% hold)
08:30 GBP UK Markit Services PMI (Apr)
09:00 EUR EC Economic Growth Forecasts (time approx)
12:30 USD US Trade Balance(Mar)
12:30 CAD Canada Trade Balance
13:45 USD US Markit Services/Composite PMI(Apr)
14:00 USD US ISM Non-Manufacturing PMI (e32.0 p52.5)
14:30 NZD NZ GDT Milk Index (time approx)
22:45 NZD NZ Emp/UnEmp/AHE (UnEmp e4.2% p4.0%)

Wednesday May 6
There is talk of a new 20-year bond being issued today when the Treasury announces its quarterly funding requirements. Also the ADP estimate at minus 2 million is unprecedented. Tech companies SQ SHOP and PYPL report after the bell. There are rate decisions in Poland and Brazil.
01:30 AUD Australia Retail Sales (MoM)(Mar)
01:45 CNY China Caixin Services PMI(Apr)
06:00 EUR Germany Factory Orders s.a. (MoM)(Mar)
07:55 EUR Germany Markit PMI Composite(Apr)
08:00 EUR Eurozone Markit PMI Composite(Apr)
09:00 EUR Eurozone Retail Sales (YoY)(Mar)
12:15 USD US ADP Employment Change(Apr) (e-13.0m p-27k)
14:30 WTI EIA Crude Oil Stocks Change(May 1)
23:50 JPY BoJ MPC Minutes

Thursday May 7
At a new early time, we get the first UK rate decision under new Governor Andrew Bailey. The key US stat today is the Initial Jobless Claims. There are also rate decisions in Norway and Czechia.

01:30 AUD Imports/Exports/TB
02:30 China Imports/Exports/TB (time approx)
03:00 NZD RBNZ Inflation Expectations (QoQ)(Q2)
06:00 GBP BoE Rate Decision/Statement (e0.1% hold)
06:00 EUR Germany Industrial Production (e-7.0%, p0.3%)
06:30 GBP BoE's Governor Bailey speech
12:30 USD US Initial Jobless Claims(May 1) (p3839k)
15:00 CAD Canada Ivey PMI

Friday May 8
The estimate for NFP is the largest in history, and reflects a full month of lockdown. Markets are closed in the UK and France for the 75th anniversary of VE Day. Germany is not closed.

01:30 AUD RBA Monetary Policy Statement
06:00 EUR Germany Imports/Exports/TB
12:30 USD US NFP/AHE/Unemp (NFP e-2M p-701k, UE e14% p4.4%)
12:30 CAD Canada NFP/AHE/Unemp (NFP e-350k p-1M, UE e7.2% p7.8%)