US COVID cases rising, NDX outperforms to ATH, Gold hits 9-year high
MY CALL THIS WEEK : BUY EURGBP
This week there was no doubt that new highs in COVID cases, greater than the April high, are hitting the US, and South America, and after a brief rally on Monday, the trend was flat, the exception being NDX which continued to rise, diverging substantially from other markets. It is as though a Fed wall of money has to go somewhere, and tech is the only candidate, as it has been for the last ten years.
The dollar has had a whipsaw V-shaped week, trending slightly down but helped by an equally weak euro, and a positive Jobless Claims report. Gold made a new 9-year high, showing the fragility of the rally.
Next week is much busier on the data front. We have rate decisions from the ECB, BoJ and BoC, and plenty of other data. But more importantly, a crucial earnings season starts where we will see the full effect of COVID on a quarter. As always JPM and Citi lead the way on Tuesday, but with AA, UNH, NFLX and JNJ following, we will get a wider picture in several sectors.
- Earnings Season opens
- ECB, Canada, Japan Rate Decisions
- Heavy macro week
- Option expiration
Monday July 13
A quiet day before the earnings storm, with only BoE Governor Andrew Bailey by webinar on “LIBOR: Entering the Endgame”. There is a rate decision in Romania.
02:00 China FDI (time approx.)
15:30 BoE Governor Bailey speech
18:00 Monthly Budget Statement (Jun)
Tuesday July 14
Earnings season starts today, with as always JPM first out of the gate, swiftly followed by fellow banks C and WFC, and airline DAL, all before the opening bell. SNB Governor Jordan speaks today at 1330. Banks but not markets are closed in France for Bastille Day. There is a rate decision in Poland.
03:00 China Imports/Exports/TB (time approx.)
06:00 UK GDP (May p-20.4%)
06:00 Germany CPI (YoY e0.5% p0.8%)
08:00 ECB Bank Lending Survey
09:00 Germany ZEW Economic Sentiment (Jul e60, p63.4))
12:30 US CPI (YoY Core e1.3% p1.2%)
Wednesday July 15
Earnings today come from Dow giants GS and UNH before the bell. There are also rate decisions in the Philippines and Colombia. Markets are closed in Turkey.
00:30 Aus Westpac Consumer Confidence (Jul)
01:00 Aus HIA New Home Sales (MoM)(May)
03:00 BoJ Rate Decision/Statement (e-0.1% hold)
06:00 UK CPI (YoY Jun e0.5% p0.5%)
06:00 BoJ Press Conference
08:00 BoE Tenreyro speech
10:00 Germany 10Y Bond Auction (time approx.)
13:15 US Industrial Production (MoM)(Jun)
14:00 BoC Rate Decision/Statement (e0.25% hold)
15:00 BoC MPC Minutes
15:15 BoC Press Conference
18:00 Fed Beige Book
22:45 NZ CPI (YoY e2.1% p2.5%)
Thursday July 16
Earnings today before the bell are from BAC and JNJ, with the first of the FANGs NFLX reporting after the close. There are also rate decisions in South Korea and Indonesia.
01:00 Aus Consumer Inflation Expectations (Jul)
01:30 Aus NAB Business Confidence (QoQ)(Q2)
01:30 Aus NFP/UnEmp (NFP e-100k p-228k)
02:00 China 20Q2 GDP (QoQ e-9.9% p-9.8%)
06:00 UK ILO Unemployment Rate (e4.7% p3.9%)
08:30 BoE Credit Conditions Survey(Q2)
11:45 ECB Rate Decision/Statement (e0% hold)
12:30 US Retail Sales (Control Group p11%)
12:30 Philly Fed Manufacturing Survey (Jul)
12:30 Initial Jobless Claims (p1314k)
12:30 ECB Lagarde Presser
22:30 Business NZ PMI(Jun)
Friday July 17
No significant earnings today, but it’s July option expiration, so expect additional volatility, particularly from the earnings report stocks. A special two-day EU leaders summit in Brussels (yes, physical!) starts. The topic is the EU COVID recovery package.
00:00 EU Leaders Special COVID Summit (continues Saturday)
09:00 Eurozone CPI
12:30 US Building Permits/Housing Starts
12:30 Canada Retail Sales (MoM May p19.1%)
14:00 Michigan CSI (e80 p78.1)