Sunday, 18 October 2020

Week to Oct 16th

Positive earnings but little reaction, More consolidation, Dollar exactly reverses last week
MY CALL THIS WEEK : SELL EURNZD


Uncertainty about everything, COVID case, COVID stimulus and the election meant that markets continued their pre-election consolidation again this week, despite almost universally positive earnings reports, both on EPS (manipulable) and Revenue (less so). After a strong rally on Monday, SPX and DJIA faded to close flat on the week. The dollar had an inside week, almost exactly reversing last week’s candle, as did Gold. Oil and bonds also had a very flat week.


Next week has more earnings, but we have seen that the market is not reacting to that. It also has like last week, a huge CB speaker roster, but again markets did not react to those last week either. Unless there is a surprise, either in COVID or the election, it seems this consolidation will continue, which means equity/Oil decline and more dollar/yield recovery (and thus Gold decline).




Mon Oct 12

Friday’s rally continued today and NDX outperformed in advance of Amazon Prime day. AMZN and AAPL were both up 5%. The dollar had a fairly flat day, although JPY was down in line with the equities move, as were Bonds. Oil did not follow equities and was down, as was Gold.



Tue Oct 13

JNJ’s earnings beat today was overshadowed by a report from the company that there had been a setback on their vaccine trial. The company’s price fell 2.29%, and DJIA fell 0.58% overall. A warning from the IMF about the long-term effect of COVID on the economy spooked traders, and good earnings and revenue results generally did not help. Bonds rose in line. There was a distinct move into the dollar safe haven around 1230 with Gold, EUR and GBP falling sharply, JPY less so (in line with risk-off). Oil again defied the equity trend and rose. The sterilng fall was exacerbated by a sharp increase in benefit claimants reported, double the level before COVID, as the furlough scheme ends.



Wednesday October 14

Today TreasSec Mnunchin cast doubt again on whether a stimulus deal would be reached before the election. Stocks fell again, with NDX falling further, despite another day of good earnings reports. Today, the dollar was flat against most currencies, but the yen was up, along with Gold and Bonds to make a complete haven trio. Curiously Oil was up, the third day it has moved in a different direction to stocks.



Thursday October 15

Equity markets and Oil continued to fall today, although a recovery in the US afternoon session meant losses were greater in Europe, whereas the US finished almost flat. The dollar was up, but Gold was up more, as were yields (inverse to bond prices), in line with equities.



Friday October 16

The late Thursday rally continued today and but peaked around the European close. A sharp decline in the last hour, probably due to option expiration meant SPX closed flat on the day, and nearly flat on the week. The dollar was slightly down, mainly due to a surge in CAD. All other currencies were more or less flat. Gold and bonds were down in line with the earlier rally, and Oil closed slightly down (Oil expiration dates are different).




WEEKLY PRICE MOVEMENT

One of the flattest weeks this year, with DAX down 1.09% the biggest mover. The largest forex move was AUDJPY down 2.44%. Cryptos were quiet again, roughly tracking equities, and FANG stocks were similarly lacklustre, with GOOGL, which has trailed the others up 3.79%.


My EURGBP trade lost 0.07%, running profit 7.70%, 18/35 wins. This week I am betting on the landslide of the world’s most popular political Jacinda Ardern carrying through and selling EURNZD.






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)


  • Second week of earnings
  • Another heavy CB speaker week
  • UK and Canadian inflation
  • Election debate, three weeks left


Monday October 19 

In addition to the CB presidents (who also speak on Sunday), there are eight other CB speakers on today. The Chinese data is the most important. IBM reports after the bell. Historians may be interested to know that the 1987 crash was 33 years ago today.


23:50 Japan Imports/Exports/TB (Sun)

02:00 China GDP

02:00 China Retail Sales

07:15 ECB De Guindos speech

11:30 ECB Mersch speech

12:00 Fed Chair Powell speech

12:40 ECB President Lagarde speech

12:40 ECB Lane speech

12:45 ECB President Lagarde speech

13:00 Fed Williams speech

14:05 BoE Cunliffe speech

14:30 BoC Business Outlook Survey

15:00 BoE Cunliffe speech

15:45 Fed Clarida speech

16:00 ECB Weidmann speech

23:30 RBA Kent speech



Tuesday October 20 

First of the FANGs, NFLX report after the close, along with SNAP. Dow giant PG reports before the opening bell. There is a rate decision in Hungary.


00:30 RBA Meeting Minutes

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

06:00 Germany PPI

12:30 US Building Permits/Housing Starts

14:50 Fed Quarles speech



Wednesday October 21 

Market darling TSLA reports after the bell today. Otherwise, another packed day of CB speakers, and inflation from the UK and Canada.


00:30 Aus Retail Sales (p-4.0%)

01:30 BoJ Sakurai speech

06:00 UK CPI (YoY e0.5% p0.2%)

07:30 ECB President Lagarde speech

07:45 ECB Lane speech

10:00 ECB De Guindos speech

12:10 BoE Ramsden speech

12:30 Canada BoC CPI (Core e0.7% p0.8%)

12:30 Canada Retail Sales (p1.1%)

12:50 Fed Brainard speech

16:00 ECB De Guindos speech

18:00 Fed Beige Book

22:30 RBA Debelle speech



Thursday October 22 

Earnings highlights today are DJIA stalwart KO before the open, and NDX giant INTC after the close. There are rate decisions in Turkey (cut expected) and Israel.


00:30 Aus NAB Business Confidence

06:00 Germany Gfk Consumer Confidence

12:30 US Jobless Claims

14:00 US Existing Home Sales

14:00 Eurozone Consumer Confidence

22:00 Aus Commonwealth Bank PMIs

23:30 Japan National CPI



Friday October 23 

The main focus today will be on the Presidential Debate, held the previous evening after markets closed. There is a rate decision in Russia. Markets are closed in Thailand and Hungary.


06:00 UK Retail Sales

07:30 Germany Markit PMIs (Mfr e55.5 p56.4)

08:00 Eurozone Markit PMIs (Comp e49.5 p50.4) 

08:30 UK Markit PMIs (Services e 54.0 p56.1)

13:45 US Markit PMIs

No comments:

Post a comment

Please leave a comment. They are moderated and spam (links to your site) will not be published.