Week to Sep 27th

Possible delisting of China stocks, Talk of impeachment, UK prorogation cancelled

Mon Sep 23

Indices were mixed today. SPX recovered from its knee-jerk fall after Friday’s Fed comments and China meeting cancellation to end the day flat. There was some difference of opinion about that event, as shown in a poll I created.

DAX and NKY were down, the former after another German Manufacturing PMI miss, but as GBP was strong, FTSE as always lagged. The currency picture was mixed with DXY adding 0.15% purely on EUR slippage, the other currencies were up as was Gold. Oil slipped slightly and yields were flat.

Tuesday September 24

US indices and Japan fell hard today, down 1% on possible Trump malfeasance with the Ukrainian president, raising the spectre of impeachment. In the UK, the prorogation of parliament was ruled illegal, a blow to the hard Brexit strategy and GBP rallied. FTSE gapped down, recovered, but ended the day lower. DAX on the other hand had a good day. DXY was down with all currencies and Gold advancing, particularly JPY. Yields and Oil were also down in line with risk-off.

Wednesday September 25

Hopes of fresh trade talks, and Trump ‘coming clean’ on the Ukraine matter halted the slide and SPX posted a 0.6% gain. NKY followed suit as JPY reversed back down. FTSE was once again down on GBP strength.  Risk-on was seen more outside equities than within, with DXY up 0.67% and all currencies, Gold and Bonds down. Gold fell particularly sharply. Oil and DAX were however down on the day.

Thursday September 26

The see-saw continued today, with SPX and NKY down but DAX and FTSE up. The dollar was a little more certain, up across the board slightly, but Gold and Oil were flat. However yields climbed again. The US-Japan partial trade deal I referred to in last week was signed, but was overshadowed by talk from House Leader Nancy Pelosi about impeachment for the Ukraine issue, which the Republicans are calling Bidengate and the Democrats Ukrainegate.

Friday September 27

There was a sense of déjà vu today. My report last Friday started “Equities were doing moderately well on Friday until the afternoon session when it was revealed….” and so it was today. The White House said they were looking at controls on capital outflow to China, which in effect means Chinese companies such as BABA or BIDU would be unable to list in the US. SPX dropped 0.73% in four minutes and continued down, ending 0.5% in the red. NKY and Oil followed suit. The DAX pullback was much smaller, and FTSE ignored the whole thing (and a GBP slide) with a very flat day.

The dollar was fairly quiet through all this, fading a mere 0.08% as EUR recovered slightly after falling all week. If anything, the currency reaction was still risk-on, with advances in CAD and AUD, and declines in Gold, JPY and Bonds.

WEEKLY PRICE MOVEMENT

A definite difference between the US and rest of the world this week. The largest mover was NIFTY, still benefiting from the Indian tax cuts. The biggest forex move was GBPCAD down 1.55%. Cryptos fell hard, as did FANG stocks, FB faring worst.

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)

• EU tariff announcement
• Fourteen PMI reports
• RBA rate cut expected
• Non-farm Payrolls

Monday September 30

The WTO ruling on Airbus subsidies is due today with tariff recommendations, which will cover other EU imports. The first two of 14 PMI reports this week are today. Expect the impeachment and trade dramas to carry on running. The end of the month and quarter may result in increased volatility.

23:50 JPY Japan Retail Sales (Sunday)

01:45 CNY China Caixin Manuf PMI (e50.2 p50.4)

06:00 EUR Germany Retail Sales

07:55 EUR Germany Unemployment Rate

08:30 GBP UK 19Q2 Final GDP (QoQ e0.5% p-0.2%)

09:00 EUR Eurozone Unemployment Rate

12:00 EUR Germany CPI (YoY e1.2% p1.0%)

13:45 USD Chicago PMI

23:30 JPY Japan Jobs/Unemployment

23:50 JPY Tankan Manufacturing Index/Outlook

Tuesday October 01

A new month and the first day of Q4. The ISM Manufacturing PMI is interesting, as the estimate brings it back into positive territory. PMIs are a good barometer of the effect of the trade war. A miss will not help markets. Plenty of Fed speakers on the roster. Markets are closed in China today for the rest of the week.

04:30 AUD RBA Rate Decision/Statement (e0.75% p1.00%)

07:55 EUR Germany Markit Manuf PMI

08:30 GBP UK Markit Manuf PMI

09:00 EUR Eurozone Prelim CPI (Core YoY e1.0% p1.0%)

09:20 AUD RBA Governor Lowe speech

12:30 CAD Canada GDP MoM

12:50 USD Fed Clarida speech

13:15 USD Fed Bullard speech

13:30 CAD Markit Manuf PMI

13:30 USD Fed Bowman speech

13:45 USD Markit Manuf PMI

14:00 USD ISM Manuf PMI (e50.0 p49.1)

Wednesday October 02

For once the quietest day of the week, with only the ADP (NFP ‘preview’) of interest. There is a rate decision on PLN (hold expected). Markets are closed in India.

08:30 GBP Markit Construction PMI

12:15 USD ADP Employment Change (e140k p195k)

14:50 USD Fed Williams speech

Thursday October 03

All PMIs today, although the profile will have been set earlier in the week. KO competitor PEP, unusually an NDX component has an August quarter-end, and reports today before the bell. Markets are closed in Germany and Korea.

01:30 AUD Aus I/E/Trade Balance

07:55 EUR Germany Markit Composite PMI

08:00 EUR Eurozone Markit Composite PMI

08:30 GBP UK Markit Services PMI

09:00 EUR Retail Sales (YoY)

12:30 USD Fed Quarles speech

12:30 USD Jobless Claims

13:45 USD Markit Services/Composite PMI

14:00 USD ISM Non-Manuf PMI (e55.0 p56.4)

14:00 GBP BoE Tenreyro speech

22:35 USD Fed Clarida speech

Friday October 04

NFP is the main story today, as always, and there is little else to distract. Note the Canadian report is next week. There is a rate decision on INR (25bp cut expected).

01:30 AUD Australia Retail Sales

12:30 USD US NFP/AHE/Unemp (NFP e140k p130k)

12:30 USD US Trade Balance

12:30 USD Fed Rosengren speech

12:30 CAD International Merchandise Trade

14:00 CAD Ivey PMI

18:00 USD Fed Chair Powell speech

I am hoping to pass 60,000 page views on the blog this weekend

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 Twitter, Facebook, Stocktwits, TradingView or Linkedin (all open in separate windows). Details of how I compile the report are here.

Week to Sep 20th

Oil soars on Saudi attack, Fed rate cut as expected, Trade war setback

Mon Sep 16

The week opened to the news that Saudi oilfields had been attacked, affecting 50% of output. Oil opened up well over 10%. Gold, JPY and bond futures also gapped up, and indices fell. Only FTSE which is an oil proxy managed to close flat by the end of the day. The news gave a strong boost to USD, with DXY up 0.80%, its best day for over a year. All currencies were down and only JPY managed to close flat. Yields were relatively unaffected, but did turn down after last week’s rally.

Tuesday September 17

Saudi Arabia confirmed their production would be quickly back online today, and the shortfall could be covered by reserves. Oil gave up half its panic gains (as did DXY and Gold), and it was generally Turnaround Tuesday across the board. Indices recovered, except for FTSE which was depressed by a GBP and EUR ramp. CAD (Oil) and JPY (safe haven) were flat having recovered largely the previous day. However, yields continued to retreat, showing that the day was a recovery from an overreaction, rather than truly risk-on.

Wednesday September 18

The Fed duly cut rates by 25bp today, Indices had been fading. The release produced a spike down and then a strong rally in SPX, which ended the day up, as did other indices. The rhetoric surrounding the print was seen as hawkish, and DXY rallied 0.35%, with all currencies, and particularly Gold sharply down. Yields were in line with stocks, ie falling at first, and then spiking up to close flat. Oil was much flatter, only slightly down on the day.

Thursday September 19

After a wild day up and down, to be expected after the rate decision, SPX closed flat by the bell, with pressure upwards from the US rate cut, being balanced by downward pressure from the dovish messages from the central banks for GBP, CHF, JPY and NOK. A sharp drop in GBP after the BoE statement reversed a rallying FTSE. DXY was down 0.21% with all currencies, Gold and Oil up. Only AUD, weak for weeks, fell today. Yields were slightly down.

Friday September 20

Equities were doing moderately well on Friday until the afternoon session when it was revealed that a Chinese delegation to midwest farming communities had been cancelled. It was like a switch being flicked. SPX dropped 0.82% immediately, a very strong reaction which was seen in other indices, currencies. The usual risk off reaction occurred, a strong spike up in Gold, JPY and bonds, and a sharp fall in EUR and GBP. Oil was surprisingly flat, and DXY ended 0.12% up overall. It is possible some reaction was the expiry of quarterly SPX options, but they close with the bell.

WEEKLY PRICE MOVEMENT

With the uncertainty of the week, it was always going to be JPY pair that moved most, and this week, an NZDJPY short would have been the top trade. Top index move was the NIFTY which soared over 5% on Friday, its best day in a decade, as India announced a surprise cut in corporation taxes. ETH surged ahead of Bitcoin again. In FANG, a huge drop by NFLX after bad figures from ROKU.

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)

• Japan and EU in trade focus
• Kiwi rate decision
• German Manufacturing PMI
• Large Fed Roster

Monday September 23

Markets are closed in Japan for the autumnal equinox, the end of summer. This week a USTR ruling on Airbus subsidies is expected. Fed Bullard and Williams are due to speak today. There is a rate decision on COP.

07:30 EUR German Prelim Markit PMIs (Manuf e44.0 p43.5, Comp e51.4 p51.7)

08:00 EUR Eurozone Markit PMIs (Comp e51.4 p51.7)

12:30 USD Chicago Fed National Activity Index 

13:45 USD US Markit PMIs (e51.9 unch.)

Tuesday September 24

Other than CB speeches, the German IFO Survey, which has been falling for 12 months, is expected to rise slightly (e94.5 p94.3). There are rate decisions on HUF and NGN.

05:35 JPY BoJ Governor Kuroda speech

08:00 EUR Germany IFO Business Sentiment

08:30 GBP UK PSBR

09:55 AUD RBA Governor Lowe speech

13:00 USD US Homes/Housing Price Index

14:00 USD US Consumer Confidence

22:45 NZD NZ Imports/Exports/TB

23:50 JPY BoJ MPC Minutes

Wednesday September 25

President Trump is expected to sign a limited trade deal with Japan at the UN General Assembly meeting today, but this will not include auto tariffs. Fed Evans is due to speak. There are rate decisions on CZK and THB, holds expected.

01:30 JPY BoJ Masai speech

02:00 NZD RBNZ Rate Decision/Statement (e1.00% hold)

09:40 EUR DE10Y Auction

14:00 USD US New Home Sales

Thursday September 26

The final US Q2 GDP is published, in line with the second reading on Aug 29. Fed Kashkari is due to speak today. There are a rate decisions on MXN (25bp cut expected), also on PHP and EGP.

06:00 EUR Germany Gfk Consumer Confidence

08:00 EUR Eurozone Economic Bulletin

12:30 USD US Jobless Claims

12:30 USD US GDP 19Q2 Final (Annualised e2.00% p2.00%)

12:30 USD US Core PCE QoQ

14:00 USD US Pending Home Sales

23:30 JPY Tokyo CPI ex Food Energy (YoY e0.5% p0.7%)

Friday September 27

The increasingly important Durable and Non-Defence Capital Goods ex Aircraft print is expected to rise substantially. Fed Harker is due to speak today. The month and quarter ends on Monday, but some volatility may be seen today because of this.

07:00 GBP BoE Saunders speech

09:00 EUR Eurozone Business Climate

12:30 USD US Core PCE MoM & YoY

12:30 USD US Personal Income (MoM)

12:30 USD US Durable and ND Capital Goods (ND Aug e1.0% p0.2%)

14:00 USD Michigan CSI

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 Twitter, Facebook, Stocktwits, TradingView or Linkedin (all open in separate windows). Details of how I compile the report are here.

Week to Sep 13th

ECB rate cut and QE2, Sterling rallies on Brexit deal hopes, Trump postpones tariffs

Mon Sep 09

In the absence of news, there was little action globally today, with indices more or less flat, although other markets showed a risk-on profile, with Gold, JPY and bonds firmly down, and Oil up. The exception was in the UK, where GBP rallied and of course FTSE fell, following last Friday’s success for the anti-no-deal Brexit doves, and the (accurately) predicted failure of British PM Johnson to get agreement for an election before the Brexit deadline of Oct 31. Yields were up following the Powell ’recession unlikely speech’ on Friday, a trend which continued all week.

Tuesday September 10

Another flat day in the US covering mixed action as tech fell and energy rose sharply, the latter despite a slight Oil decline. Also DJIA outperformed due to strong moves from BA and CAT. However non-US indices all rose, and Gold and JPY were slightly down in line. Other currencies were fairly flat, for once, and the real story in the US was bonds, with yields rising 11.8bp.

Wednesday September 11

A rally finally kicked in today with all markets up as investors anticipated easing in both the ECB tomorrow and the Fed next week. SPX crossed the 3,000 line, helped by a positive reception to AAPLs new cheaper iPhone and Apple TV+. Oil was up in line, helped by the EIA beat at 1530. In forex, the dollar  basket was up 0.3% with all currencies (except AUD, not part of the basket) down. Yields rose more slowly today.

Thursday September 12

Today’s bold ECB moves, cutting the deposit rate and reintroducing QE caused a huge move in EUR. It initially dipped 0.88%, but as the easing moves were less than anticipated from there added 1.47%. Notably Gold, bonds and JPY spiked up and faded more in line (to the minute) with the EUR movement, as did DAX the other way (spiked down and recovered). The US inflation beat concurrent with the ECB presser was lost in the noise. As we predicted last week, President Trump tried to tweet the dollar down by contrasting today’s ECB action with the Fed next week. Overall on the day, DXY was down 0.29%.

This was enough to fade DXY by 0.29% overall, despite JPY being slightly down, the only currency to go in that direction. Indices had received a boost the night before as President Trump postponed some Chinese tariffs as a ‘gesture of goodwill’ and were comfortably up.

Friday September 13

US indices closed flat today after an early rally, whereas DAX continued up, reflecting the ECB easing, as did NKY. FTSE was down following a very strong (1.5%) rally in GBP following a reported breakthrough in the Brexit deal talks, in that the coalition Northern Irish DUP may shift their position on the Irish backstop. A further rise in EUR meant a down day for the dollar. Gold was down and Oil flat, and yields continued upwards as they have done all week.

WEEKLY PRICE MOVEMENT

NKY came out top this week in a positive week for indices, helped of course by the 1.09% fall in the yen, which also resulted in GBPJPY being the biggest forex mover, up nearly 3%. Crypto was quiet, with ETH catching up with BTC’s gain last week. FANGs were quieter than usual, but still managed to outperform the NDX index.

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)

• Fed rate cut expected
• Six more rate decisions on Thursday
• Quad-witching OpEx
• British and Canadian inflation

Monday September 16

The weekend attack on Saudi oilfields, possibly cutting their production in half may well affect Oil, and its proxies CAD and FTSE today. Markets are closed in Japan and Mexico.

02:00 CNY Retail Sales/Industrial Production

02:00 CNY NBS Press Conference

Tuesday September 17

The important German and Eurozone sentiment indicators were surveyed before Thursday’s ECB action. ECB Coeuré speaks at 1710.

01:30 AUD RBA Meeting Minutes

09:00 EUR Eurozone ZEW Economic Sentiment

09:00 EUR Germany ZEW Survey Economic Sentiment (e-38.0 p-44.1)

13:15 USD US Industrial Production (MoM)

14:00 NZD NZ GDT Milk Index

23:50 JPY Japan Imports/Exports/TB

Wednesday September 18

Today is the big day, the US rate decision. Note that the recent bond fade has pushed back the ‘priced in’ level on a 25bp cut from 90% last week to only 80%, meaning a potential stock rally to new all-time highs if the cut is delivered, unless of course Powell accompanies it with hawkish rhetoric. Also today GOOGL, FB and TWTR testify before the senate about content control. There is also a rate decision on BRL.

08:30 GBP UK CPI (YoY e1.9% p2.1%)

09:00 EUR Eurozone CPI

12:30 USD US Housing Starts/Building Permits

12:30 CAD Canada CPI (BoC Core p 2.0%)

18:00 USD Fed Rate Decision (e2.0% p2.25%)

18:30 USD Fed Chair Powell Presser

22:45 NZD NZ19Q2 Final GDP (QoQ e0.4% p0.6%)

Thursday September 19

After the Fed have made their decision, there are six more rate decisions today, as there are also decisions on NOK, IDR and ZAR. The most important is GBP, not so much for the hold, but the committee vote (the UK version of ‘dot-plot’) and its effect on the now volatile sterling. Markets are closed in Chile today.

01:30 AUD Aus NFP/UnEmp (e10k/5.3% p41.1k/5.2%)

02:00 JPY BoJ Rate Decision/Statement (e-0.1% hold)

06:00 JPY BoJ Presser

07:30 CHF SNB Rate Decision/Statement (e-0.75% hold)

08:30 GBP UK Retail Sales

11:00 GBP BoE Rate Decision/Statement (e0.75% hold)

12:30 USD US Jobless Claims

12:30 USD Philly Fed Manufacturing Survey

14:00 USD Existing Home Sales (MoM)

23:30 JPY Japan National CPI

Friday September 20

Markets will still probably be reacting to the interest rate moves but today is monthly and quarterly Opex, sometimes called quad-witching (the daily, weekly, monthly and quarterly options all expire). It’s quite important, as index future options are mainly traded quarterly. For example SPX December 19 open interest is over double that of October and November monthlies. Note also an opportunity on CAD, their rate decision was last week, but if Wednesday’s inflation moves CAD hard, Friday’s retail sales (if one is a beat and the other a miss) may well exactly reverse it.

06:00 EUR Germany PPI

08:30 GBP UK PSBR

12:30 CAD Canada Retail Sales (MoM e0.8% p0.0%)

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 Twitter, Facebook, Stocktwits, TradingView or Linkedin (all open in separate windows). Details of how I compile the report are here.

Week to Sep 6th

NFP miss after ADP beat, Dollar reversal, Brexit doves win a round

Mon Sep 02
Today was Labor Day, a US holiday, so as you might expect the action was elsewhere. Asian indices fell as the new US tariffs on China came into place, and DAX and US Futures followed suit. The British parliament opened after summer, and immediate Brexit antagonism caused a sharp drop in GBP which allowed FTSE to rise. Other currencies were slightly down and DXY finished 0.24% up on the day. Gold, Oil and Bond futures were flat

Tuesday September 03

Equity markets carried on drifting downwards, after a series of trade release misses, most significantly the ISM Manufacturing PMI at 1400 which move below 50, ie into contraction for the first time in three years. The print of 49.1 from the estimate of 51 is equivalents to a -0.9% after a +1.0% estimate in other statistics. Oil was down, and Gold, JPY and Bonds were up in line. After briefly hitting a two-year high of 99.37, DXY was down 0.08%, with GBP up on hopes of frustrating a no-deal Brexit, and AUD following gold. However with EUR and CAD flat the move was minimal.

Wednesday September 04

The China Caixin Services PMI beat at 0145 set the mood, followed by PMI and Retail Sales beats in Europe. Equities snapped their losing streak, and SPX added 1.1% on the day. The dollar fell steadily all day, giving up 0.57% as Gold and all currencies except risk barometer JPY advanced. CAD was particularly strong after hawkish remarks from the BoC following the rate hold at 1400. Oil was up in line with equities, and 10-year bond yields were flat, but the 10/2 yield curve climbed back into positive territory. The four Fed speakers added little to what we already knew.

Thursday September 05

Today’s announcement of new high-level US-China trade talks, which of course have stalled recently, in addition to successful moves in the UK parliament to block a no-deal Brexit, and a beat on the ISM Non-Manufacturing PMI at 1400, was enough to continue the equities and Oil rally. SPX added 1.3%, its best day in three weeks. A relatively flat DXY (up 0.02%) disguised a rally in most currencies, but the inevitable pullback in JPY (and Gold). CAD gave back a little of Wednesday’s rally. Yields were sharply up on bond-stock rotation.

Friday September 06

Friday’s NFP was a miss (130k vs 158k) and as the rate decision is next week, the ‘bad is good’ effect applied. A low figure makes a rate cut more likely. However, as a 25bp rate cut is already 91.2% priced in, per the CME Fedwatch tool, there was no sudden move in equities, which did nevertheless all gain on the day, as did Oil. DXY was down 0.37% on the same principle, mainly due to a further CAD rally and pullback in JPY. Unusually, 0.3% of this move was in the last three minutes of trading. GBP and EUR gave back some of the week’s rally and yields were down in line with rotation and rate cut hopes.

Surprisingly, there was little reaction to Fed Chair Powell’s speech at 1630, in which he said he does not expect recession and the economy is in a “good place”. He reiterated that the Fed will not be swayed by politics (eg Trump pressure to cut rates).

WEEKLY PRICE MOVEMENT

The top performing index this week was, unusually, DJIA, and our top performing tracked share was AMZN. In currencies, the rarely traded AUDCAD pair, if shorted would have made the best return. Crypto, still quieter than it used to be, returned north.

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)

• ECB dovishness expected
• Chinese and German inflation
• British Parliament prorogued
• Three quiet scheduled news days

Monday September 09

Having passed a law on Friday to force PM Johnson to ask for a Brexit extension, the British Parliament may force further moves to prevent a no deal exit. GBP did not react positively to Friday’s move, volatility may occur today.

07:00 CNY China Imports/Exports/TB (Sunday)

23:50 JPY Japan GDP (Sunday) (QoQ e0.3% p0.4%)

06:00 EUR Germany Trade Balance s.a.

08:00 GBP BoE Vlieghe speech

08:30 GBP UK GDP (MoM)

22:45 NZD NZ Electronic Card Retail Sales (MoM)

Tuesday September 10

The UK parliament is suspended or prorogued this week, although the Brexit saga may continue in the courts. A second day of no significant American news. Markets in India are closed.

01:30 CNY China CPI (YoY e2.6% p2.8%)

07:00 CNY China FDI

08:30 GBP AHE/UnEmp (AHE e3.8% p3.9%, Unemp e3.9% p3.9%)

Wednesday September 11

An ominous date in history, but yet another quiet day on the news front. There is a rate decision on PLN.

12:30 USD US PPI

23:50 JPY Japan Machinery Orders

Thursday September 12

Today's ECB decision and press conference, the penultimate one for outgoing President Draghi is the most important event of the week, especially as the conference is concurrent with the US inflation print. A reduction to the deposit rate (not the base rate) may be on the cards. Watch out to see if President Trump tries to tweet the dollar down. There is a rate decision on TRY where a 3% cut is expected.

06:00 EUR Germany CPI (YoY e1.0% p1.0%)

09:00 EUR Eurozone Industrial Production (MoM)

11:45 EUR ECB Rate Decision/Statement (e0.% hold)

12:30 EUR ECB President Draghi Presser

12:30 USD Jobless Claims

12:30 USD US CPI (YoY e2.3% p2.2%)

18:00 USD US Monthly Budget Statement

Friday September 13

The Michigan Consumer Sentiment Index hit a three-year low last month, and recovery is assumed. Markets in China, Taiwan and Korea are closed.

00:00 EUR Eurogroup Meeting (all day)

12:30 USD US Retail Sales (Control Group Aug e0.3% p1.0%)

14:00 USD Michigan CSI (e90.5 p89.8)

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 Twitter, Facebook, Stocktwits, TradingView or Linkedin (all open in separate windows). Details of how I compile the report are here.

Week to Aug 30th

Trade war indecision, Euro hits 1.10, GBP down on prorogation

Mon Aug 26
President Trump’s “second thoughts” about the trade war were enough to move markets and the dollar up on Monday. All currencies fell except surprisingly AUD which bounced off a psychological 0.67 triple bottom (the level hit on previous flash crashes). Gold and Bonds initially spiked up but ended flat on the day, and Oil rose in line with indices.

Tuesday August 27

Conflicting trade war signals left indices directionless today. The US was slightly down whereas elsewhere gained, partly due to their currencies. The yield curve (10 year minus 2 year) hit a new low of 5.16bp, the most since 2007. Risk assets Gold JPY and bonds (inverse to yields) were up, and commodity currencies AUD and CAD down, so overall the mood was risk-off. Oil shot up sharply at the end after a large drawdown reported by API, and GBP was up on Brexit deal hopes.

Wednesday August 28

Despite the 30-year bond yield dropping to a record low of 1.905% today (with an appropriate fall in 10-year yields, and further inversion), equity markets were still slightly up except for DAX, following the German 10-year bond auction which also made new lows. The picture was clearer with USD, with all currencies down, particularly GBP which plummeted 130 pips on British PM Johnson’s decision to prorogue (suspend) parliament to prevent no-deal blocking by MPs. Oil carried on rising as the EIA beat at 1430 reflected the API figure from Tuesday.

Thursday August 29

Conciliatory remarks from China today were enough to send equities upwards again, helped by the US GDP figures at 1230 (2.0% in line with estimates, but not a miss). Oil was up in line, as was USD with all currencies and Gold down. Yields were up on bond-stock rotation. A risk-on day.

Friday August 30

Indices made small advances today, but the real story was in currencies. The misses on German Retail Sales at 0600 and more importantly Eurozone inflation at 0900 sent EUR into a tailspin, briefly dipping below the psychological 1.10 level, last seen in 2017. Together with a sharp dip in GBP, the dollar had its best day of the week. Oil gave up some of its earlier gains. Yields were flat, hovering around 1.50%.

WEEKLY PRICE MOVEMENT

Equities were up with NDX making the largest advance. USD was the strongest currency, and very rarely seen, shorting EURUSD was the best trade. Crypto pulled back again, with Bitcoin returning to under $10,000, and FB was the top FANG performer.

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)

• Non-farm payrolls
• AUD and CAD rate decisions
• Brexit court hearings
• Four-day week

Monday September 02

Today is Labor Day, so US markets are closed, as are Canadian, Malaysian, Bermudan, Indian and Vietnamese markets On Sunday, the next phase of tariffs came in, with 15% on $131Bn of Chinese imports, and about 7% retaliatory tariff on $45Bn of US exports. German regional elections were held on Sunday.

01:45 CNY China Caixin Manuf PMI (e49.8 p49.9)

07:55 EUR Germany Markit Manuf PMI

08:30 GBP UK Markit Manuf PMI

23:01 GBP UK BRC Like-For-Like Retail Sales (YoY)

Tuesday September 03

The main news is the Australian rate statement which is expected to be mildly dovish. There is a court hearing scheduled in Scotland on the legality of UK PM Johnson prorogation (suspension) of Parliament. There is also a rate decision on CLP.

04:30 AUD RBA Rate Decision /Statement (e1.0% hold)

07:00 EUR ECB Nominated President Lagarde speech

07:00 GBP UK court hearing on forcing no-deal Brexit

08:30 GBP UK Markit Construction PMI

13:30 CAD Canada Markit Manufacturing PMI

13:45 USD US Markit Manufacturing PMI

14:00 USD US ISM Manufacturing PMI (e51.0 p51.2)

14:00 NZD NZ GDT Milk Index (time approx)

21:00 USD Fed Rosengren speech

Wednesday September 04

The BoC is expected to make a fairly neutral statement today and hold rates. A raft of Fed speeches today, although it is unlikely these will have a cumulative effect.

01:30 AUD Australia 19Q2 Final GDP (QoQ e0.5% p0.4%)

01:30 JPY BoJ Kataoka speech

01:45 CNY China Caixin Services PMI

07:55 EUR Germany Markit Composite PMI

08:00 EUR Eurozone Markit Composite PMI

08:30 GBP UK Markit Services PMI

09:00 EUR Eurozone Retail Sales (YoY)

11:00 EUR ECB Lane speech

12:30 USD US TB

12:30 CAD Canada TB

13:25 USD Fed Williams speech

13:45 USD US Markit Composite PMI

14:00 CAD BoC Rate Decision/Statement (e1.75% hold)

15:15 CAD BoC Presser

16:30 USD Fed Bowman speech

16:30 USD Fed Bullard speech

17:00 USD Fed Kashkari speech

19:15 USD Fed Evans speech

Thursday September 05

There is a rate decision on SEK, hold expected. SEK is 4.2% of DXY. The NFP ‘sneak preview’ ADP estimate is 150k (p156k) a little lower than the NFP estimate for Friday.

01:30 AUD Aus Imports/Exports/TB

07:00 GBP UK court  hearing on forcing no-deal Brexit

12:15 USD US ADP Employment Change

12:30 USD US Jobless Claims

13:45 USD US Markit Services PMI

14:00 USD US ISM Non-Manufacturing PMI (e54.1 p53.7)

14:30 GBP BoE Tenreyro speech

15:45 CAD BoC Schembri speech

Friday September 06

NFP day for both sides of the 49th parallel today, so expect USDCAD volatility and reversion too mean, maybe as soon as the Canadian PMI 90 minutes later. A US-Mexico trade meeting is scheduled for today. There is a rate decision on RUB. A 0.25% cut is expected. Markets are closed in Bulgaria for Union Day.

06:00 EUR Germany Industrial Production

09:00 EUR Eurozone 19Q2 Final GDP (QoQ e0.2% p0.2%)

12:30 USD US NFP/AHE/Unemp (NFP e159k p164k AHE e3.1% p3.2%)

12:30 CAD Canada NFP/AHE/Unemp (NFP e12.5k p-24.2k)

14:00 CAD Canada Ivey PMI

16:30 USD Fed Chair Powell speech

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