Week to Nov 22nd

Trade war flare-up, New all-time highs briefly, Sterling election fears

Mon Nov 18

In the absence of news today, equities drifted. SPX closed flat. Other indices were slightly up except DAX. The dollar fell against most currencies and Gold, but only GBP showed any serious move up, on election hopes. Only AUD and NZD were down. Oil and yields also fell.

Tuesday November 19

Poor earnings from HD set the tone for a disappointing day. After briefly touching a new ATH, SPX (and NKY) fell. So did NDX but it still managed to close green. The stronger dollar helped European indices to post nugatory gains. It was also Turnaround Tuesday for DXY, although this was only from GBP and CAD pulling back. EUR was flat, and JPY actually rose, along with Gold and Bonds, (and Oil fell), all in line with the equity pullback. AUD and NZD once again were contrary, both rising sharply after the hawkish RBA minutes and the GDT milk beat.

Wednesday November 20

The US passed a bill today to  annually re-examine Hong Kong’s special status, infuriating Beijing. President Trump also threatened to increase China tariffs if the US is unable make a deal. Naturally the markets didn’t like it, but interestingly, when they were expecting positive news, they got a negative, yet after an initial spike down, There was however, some relief from the Fed minutes (SPX only came off down 0.38% on the day. NDX fared a little worse at -0.62%. Foreign indices also fell. The dollar was up generally (except with EUR which held its own to remain flat). Oil was up after the EIA beat, and Gold was flat. Yields were down in line with the equity pullback.

Thursday November 21

The sentiment from Wednesday continued today at first although there was some recovery into the close. The Philly Fed Manufacturing survey beat was tempered by misses in Jobless Claims and Existing Home Sales. The dollar was virtually flat, with small CAD advance, following Oil, and pullbacks elsewhere (including Gold). Yields were slightly down.

Friday November 22

Indices were directionless until all three US Market PMIs beat at 1445, as did the Michigan Sentiment print 15 minutes later. Non-US indices followed suit, although less markedly. The dollar was much stronger and broke out of the range it had been holding all week, mainly due to sharp moves down in EUR (after their Markit PMIs miss) and GBP (as polls show PM Johnson’s election lead narrowing). Other currencies and Gold were only slightly down, as was Oil and yields.

WEEKLY PRICE MOVEMENT
Biggest index mover in this quieter week was NKY, down 0.82%. Currencies were also muted, with a GBPJPY short the best trade. Cryptos started moving again, to the downside, with big losses in both BTC and ETH. FANGS were very mixed, with a notable strong performance from NFLX.

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 3.5 day week
• Trade war still rumbles on
• US and Canada GDP
• Final Powell speech before blackout

Monday November 25

China has apparently invited US officials to Beijing again, but it seems the US is looking for further concessions first. All this could generate market-moving trade news at any point, and of course, a Presidential tweet or two. There is a rate decision on ILS (15bp cut expected).

09:00 EUR Germany IFO Business Sentiment

12:30 USD Chicago Fed National Activity Index

23:50 AUD RBA Debelle speech

Tuesday November 26

Chair Powell’s speech at 7pm EDT in RI is the last before the blackout prior to the Dec 11 FOMC rate decision. A few smaller retailers report earnings today.

00:00 USD Fed Chair Powell speech

07:00 EUR Germany Gfk Consumer Confidence Survey (Dec)

09:05 AUD RBA Governor Lowe speech

14:00 USD US Home Price Indices

15:00 USD US Consumer Confidence

18:00 USD Fed Brainard speech

20:00 NZD RBNZ Financial Stability Report

21:45 NZD NZ Imports/Exports/Trade Balance

Wednesday November 27

A whole raft of economic releases at 1330 before the final full day of this week should make for busy trading and volatility.

13:30 USD US PCE/Personal Income

13:30 USD US Prelim 19Q3 GDP (e1.9% p1.9%)

13:30 USD US Jobless Claims (Nov 22)

13:30 USD US ND Capital Goods (e-0.2% p-0.6%)

15:00 USD US Pending Home Sales

19:00 USD Fed Beige Book

23:50 JPY Japan Retail Sales

Thursday, November 28

US Markets are closed today for Thanksgiving. All other world markets are open, as of course are US futures. German CPI is the main print of the day.

10:00 EUR Eurozone Business Climate

13:00 EUR Germany Prelim CPI YoY (e1.3% p0.9%)

13:30 CAD Canada Current Account (Q3)

22:00 NZD ANZ - Roy Morgan Consumer Confidence

23:30 JPY Tokyo CPI YoY (e0.6% p0.5%)

23:30 JPY Japan Jobs/Unemployment

Friday, November 29

US markets are only open for a half-day today (until 1pm EDT 6pm GMT). Note the very bullish estimate for the final Canadian Q3 GDP print. There is a rate decision on KRW. Markets are closed all day in Romania (not Scotland!) today for St Andrews day.

08:55 EUR Germany Unemployment Rate/Change

10:00 EUR Eurozone CPI YoY (Core e1.2% p1.1%)

10:00 EUR Eurozone Unemployment Rate

13:30 CAD Canada Final 19Q3 GDP (e5.4% p3.7%)

14:45 USD Chicago PMI

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 Nov 15th

RBNZ surprise hold, Powell rules out more cuts for now, Trade war ups and downs

Mon Nov 11

US markets were closed for Veteran’s Day, but US futures fell in sympathy with China and Hong Kong after another weekend of protests, which are now reported as seriously affecting HK business. Also depressing the market were President Trump’s weekend comments pouring cold water on early tariff removal rumors, and the effect of retail money coming out of Asian and other markets to spend on Singles Day in China. In currencies, USD was down against most currencies, although AUD was down and CAD finished flat. Gold and JPY were down, the first quite sharply, suggesting the weekend concerns were short lived. Oil rose and yields fell in line with equities (ie bonds were up)

Tuesday November 12

Turnaround Tuesday saw equities rally today as the US returned and the weekend was forgotten. Surprisingly Gold, JPY and bonds were also up. Otherwise it was a clean sweep for USD, up across the board against currencies. Oil was up in line with equities. An interesting feature of today was that DJIA closed absolutely flat, at 27691, the same figure as Monday. This has not happened for over five years.

Wednesday November 13

Today, President Trump threatened to raise China tariffs if no truce was reached, and the market took that badly, and pulled back, although it made some recovery after the European close, and NDX even finished green. It was a very flat day in currencies, the notable exception being NZD which was up 1.24% on a surprise hold from the RBNZ (a 25bp cut had been expected).

Thursday November 14

In Chair Powells second day of testimony, he indicated that the 75bp cuts this year were enough for now, and this was enough to depress markets slightly in the US and a bit more severely elsewhere as DXY fell on the testimony not being hawkish enough. DAX, FTSE etc fall when their denominated currency rises. Most currencies and Gold rose. Only the antipodean pair faded, AUD on the severe jobs miss (-91k vs +15k) and NZD pulling back after the sharp Wednesday rise. Oil and yields were down in line with equities.

Friday November 15

On Thursday night White House adviser Kudrow said about the China deal that “we are coming down to the short strokes” and today CommerceSec Ross confirmed that the China “Phase One” deal would be made “in all likelihood”. US markets broke out of the weekly range and soared to new highs. The effect was seen in NKY but not in the European indices, but this was largely due to a further leg down in USD after the poor Retail Sales figures. Gold and JPY were of course down, but all other currencies rose, as did Oil in line with the risk-on day.

WEEKLY PRICE MOVEMENT

The top index this week was the DJIA up 1.17% to break the psychological 28000. The top forex trade would have been, unusually, shorting AUDNZD, yielding 1.91%. Another quiet week on cryptos, and FANGs generally outperformed the NDX as a whole, as often happens in strongly risk-on periods.

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)

Monday November 18

Sometime this week, the final USMCA (NAFTA 2) bill could be ratified. Fed Mester (hawk, non-voter) speaks today. There are no significant economic releases

09:00 EUR ECB De Guindos speech

13:05 EUR ECB Lane speech

22:05 AUD RBA Kent speech

Tuesday November 19

The House Intelligence Committee impeachment hearings continue today, but our opinion is that this will not affect markets, as everyone knows a House indictment will result in a Senate acquittal. Fed Williams (voter) speaks today. The final DJIA component HD reports before the bell, as do department store KSS. There is a rate decision on HUF (hold expected)

00:30 AUD RBA Meeting Minutes

13:30 USD US Building Permits/Housing Starts

14:30 NZD NZ GDT Milk Index

18:15 CAD BoC Wilkins speech

23:50 JPY Japan Imports/Exports/TB

Wednesday November 20

The minutes of the 30 October rate cut meeting may well show that 75bp is 'enough' which would be bearish for stocks and bullish for USD, although this is probably priced in from Chair Powell’s testimony last week.

HD competitor LOW reports before the bell, as does general retailer TGT. ECB Lane speaks again today at 1700. Markets are closed in Brazil and Mexico.

01:30 CNY PBoC Interest Rate Decision (e4.2% hold)

07:00 EUR Germany PPI

13:30 CAD Canada CPI (BoC Core YoY e1.9% unchanged)

19:00 USD FOMC Minutes

Thursday November 21

Fed Mester and ECB De Guindos speak again today, as does Fed Kashkari (dove, non-voter) and ECB Mersch. There are rate decisions on ZAR and IDR (holds expected)

09:30 GBP UK PSBR

12:30 EUR ECB MPC Minutes

13:30 USD Philly Fed Manuf Survey

13:30 USD US Jobless Claims

15:00 USD Existing Home Sales

23:30 JPY Japan National CPI

Friday November 22

Christine Lagarde gives her first important speech today, the keynote to the Frankfurt European Banking Congress. She has spoken before, but this venue will expect some insight into her thoughts on the euro. Markets are closed in Japan for their Thanksgiving.

07:00 EUR Germany 19Q3 final GDP

08:30 EUR ECB President Lagarde speech

08:30 EUR Germany Markit PMIs (Manuf e43.0 p42.1)

09:00 EUR Eurozone Markit PMIs (Composite e50.9 p50.6)

13:00 EUR ECB Weidmann speech

13:30 CAD Canada Retail Sales MoM Sep (e0.0% p-0.1%)

14:45 USD US Markit PMIs

15:00 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 Nov 8th

All-time highs in US markets, Trade optimism grows, USD rises smoothly all week

This week, renewed optimism that the China trade deal may be close, a slight upside on earnings versus estimates, a beat on the ISM Services PMI and of course the usual fall season sentiment propelled equities to new highs, and revitalised the dollar which had its best week since August.

Next week will no doubt be dominated by further trade news, but Chair Powell’s testimony to Congress, and the inflation print on Wednesday will be watched closely. Outside the UK, the RBNZ is expected to make a 25bp cut in rates, and plenty of UK data, plus general election rhetoric and polling suggest another lively week for sterling.

Mon Nov 04

On Sunday CommerceSec Wilbur Ross said he was “quite optimistic” about the US-China negotiations. Friday’s rally continued and all equity markets were up, and oil was in line, which is probably why the only currency not to fall against a dollar which gapped up and reversed from last week’s decline. The risk-off trio, Gold JPY and bonds all fell. The day set a general trend for the week.

Tuesday November 05

Today’s important ISM Services print beat, all three US indices made new all-time highs again, whereas DAX, FTSE and NKY were not only flat on the day, but exhibited very low volatility. Other markets repeated Monday’s moves if not more so. Oil was up again, and USD advanced even more, against all currencies (except AUD) and Gold. Bonds were down again.

Wednesday November 06

The “phase 1” deal to be signed by Presidents Trump and Xi, scheduled for this month may now be put back to December, it was announced, and US indices had a flat day, although some advances were seen in Europe and Japan. Oil retreated, and the haven trio all rose, as did currencies generally. A pullback in CAD after the Ivey PMI left DXY flat on the day as well.

Thursday November 7

The positive mood remained today, and markets made another ATH on reports from the Chinese commerce ministry that the US and China have agreed in principle “to remove some of the additional tariffs in phases”. Just like Tuesday, Oil rallied, and Gold, JPY and bonds fell, an even stronger fade. CAD and AUD were again the odd ones out, as they advanced slightly, the latter helped by the Australian Trade Balance beat at 0030. GBP had been fading all week anyway, but spiked down sharply after the surprise 7-2 (9-0 estimate) vote for a rate hold. Two BoC members voting for a cut is clearly a dovish sign. Marvel film producer DIS beat on earnings and revenue and shares gapped up 5.35% on Friday.

Friday November 8

Today Trump dismissed the Thursday Chinese reports, and along with the Michigan CSI miss, markets fell leaving the European indices, which close earlier, in the red. However, a final rally meant SPX still closed up, although not as high as Thursday’s peak. In general, currencies and Gold fell against USD, as did bonds. In particular CAD fell suddenly on the NFP jobs miss. However, Michigan CSI miss at 1500 caused a spike up in JPY which left yen as the only currency up against the dollar on the day.

WEEKLY PRICE MOVEMENT

A strong week for all indices, and as you would expect in a risk-on week, NDX was the winner. All currencies fell against USD, with NZD the weakest, although the mighty EUR came close. Another quiet crypto week, with ETH not moving at all. FANGs took the general NDX trend, although the individual performance was patchy.

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)

• RBNZ rate decision
• Powell at Congress
• Trade war progress expected
• Lots of UK data

Monday November 11

Markets are closed in the US, Canada and France for Veterans Day (the end of World War I). With little data elsewhere, expect things to be quiet. Fed Rosengren speaks today. The UK data today, and for the next month is important in the run-in to the General Election, and in light of the surprise minority BoE votes for a cut last week.

09:30 GBP UK Manuf/Industr Production

09:30 GBP UK GDP 19Q3 Prelim (e0.3% p-0.2%)

Tuesday November 12

Markets are expecting something positive and concrete on the trade deal this week, although not necessarily today. However, any suspensions or postponements will be welcomed. Fed Harker and Kashkari speak today, as does ECB Coeuré.

09:30 GBP UK Claimant Count/AHE/UnEmp (AHE e3.8%)

10:00 EUR Germany ZEW Economic Sentiment (e-17.9 p-22.8)

10:30 USD Fed Clarida speech

Wednesday November 13

This is the most important day of the week with the US inflation print, and Chair Powell’s testimony to Congress. In addition, the Federal Retirement Thrift Investment Board meets today and may discuss the idea of restricting Chinese ADRs on Wall Street. Also a decision is expected on auto tariffs, which would affect DAX. Also today are the first Trump impeachment hearings, although our view is that the market thinks this is a horse that won’t run. Fed Kashkari (again) speaks today. NDX heavyweight CSCO reports after the bell.

01:00 NZD RBNZ Rate Decision/Statement (e0.75% p1.0%)

02:00 NZD RBNZ Presser

07:00 EUR Germany CPI (e0.9% p0.9%)

09:30 GBP UK CPI (e1.7% p1.7%)

10:00 EUR Eurozone Industrial Production

10:30 EUR DE10Y Bond Auction

13:30 USD US CPI (Core MoM e0.2% p0.1%)

16:00 USD Fed Chair Powell testifies

19:00 USD US Monthly Budget Statement

22:50 AUD RBA Bullock speech

23:50 JPY Japan 19Q3 GDP Prelim (e0.2% p0.3%)

Thursday November 14

In addition to Chair Powell’s second day of testimony, we have speeches from vice-chair Clarida, and FOMC members Evans, Bullard, Williams and Daly. Six Fed speakers in one day, and ECB Knot is also on. DJIA retail giant WMT reports before the open, and chip-maker NVDA after the bell. There are rate decisions on PHP (hold expected) and MXN (25bp cut expected).

00:30 AUD Australia Jobs/UnEmp (Jobs e15.0k p14.7k)

02:00 CNY China NBS Presser

02:00 CNY China Industrial Production/Retail Sales

07:00 EUR Germany 19Q3 GDP Prelim (e-0.1% p-0.1%)

09:30 GBP UK Retail Sales

10:00 EUR Eurozone 19Q3 GDP Prelim (e0.2% p0.2%)

10:30 USD Fed Quarles speech

13:30 USD US PPI

13:30 USD US Jobless Claims

14:10 USD Fed Clarida speech

15:00 USD Fed Chair Powell testifies

Friday November 15

Today is OpEx day, so expected additional volatility. Retail Sales is important, especially if it contradicts Wednesday’s CPI print. ECB Mersch speaks to today.

01:30 AUD RBA Debelle speech

02:45 CAD BoC Governor Poloz speech

10:00 EUR Eurozone CPI

13:30 USD US Retail Sales (Control Group Oct e0.3% p0.0%)

13:30 CAD BoC Lane Speech

14:15 USD US Industrial Production

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 Nov 2nd

Fed Rate Cut boosts stocks, NFP pushes them higher, Sterling rallies on UK election

Mon Oct 28

Friday’s rally continued and equities were up today on continued hopes of a resolution to the China trade war and Brexit. The haven trio JPY, Gold and Bonds were down in line, but otherwise all currencies gained against USD which reversed direction from last week (and continued down for the whole week). Oil similarly reversed last week’s direction and fell (and again for most of the week).

Tuesday October 29

Indices generally took a breather today, and pulled back slightly. FTSE was particularly hard hit as, after some two-way volatility, GBP rallied on news of a general election to break the Brexit impasse. Oil was down, and bonds and JPY were up in line, although surprisingly, not Gold, which carried on falling. USD was down generally, although NZD and CAD were flat if not a little further down.

Wednesday October 30

The widely expected 25bp rate cut happened today. As we have said elsewhere, the economy did not really need this cut, and so as you might expect, delivering it anyway produced a sharp index rally, and of course a drop in Gold and Bonds. After a spike down on the release, JPY surprisingly fully recovered and went on to end the day flat. This may have had something to do with the blowout Japan Retail Sales figures the night before.

The USD picture was as expected, the cut was largely but not 100% priced in, so inevitably the dollar fell. The only exception was CAD, down 0.57% against USD after the BoC held rates as expected, but cut their global and domestic growth forecast. Gov Poloz said that heightened uncertainty about future trade policies were impacting business investment, but that an accommodative policy was not needed at this time to address downside risks. CAD was also hit by a miss on the EIA oil stocks print. Oil also fell 1% on this news.

Thursday October 31

A report today from China that they will not move on their key priorities, and that they are concerned about President Trump’s decision-making was enough to erase the rate cut euphoria, which was probably overdone anyway. All indices gave up Wednesdays’ gains and then some, and the haven trio were sharply up. Only NDX managed to salvage some of the previous day’s gains due to strong earnings beat performance from FB and AAPL. Oil and the commodity duo AUD and CAD were down in line. GBP carried on rising on election fever, but EUR was more or less flat after mixed European data.

Friday November 01

The NFP beat (128k vs 89k) coupled with the strong upward revision for September was just what the market wanted as SPX, NDX made new ATHs and DAX hit a 16-month high. Bonds and JPY of course fell but again, Gold didn’t, reacting instead to the weaker dollar which was down across the board, excepting JPY. 

WEEKLY PRICE MOVEMENT

NIFTY managed to beat NDX in this risk-on week. For once CAD was the weakest currency, and unusually buying AUDCAD would have been the best forex trade, up 2.01%. Cryptos slowed down with (for them) only moderate volatility, and FANGs overall did particularly well, easily beating NDX as a whole.

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)

• New and traditionally strong month
• Aus and UK Rate Decisions
• Large Fed speaker roster
• Earnings season continues

Monday November 04

Warren Buffett’s BRK.B, the largest company in SPX that is not in DJIA or NDX reports before the bell. Markets are closed in Japan.

08:55 EUR Germany Markit Manufacturing PMI (e41.9 p41.9)

09:30 GBP UK Markit Construction PMI

15:00 USD US Factory Orders

Tuesday November 05

Three Fed speakers today, Barkin (hawkish) at 1300, Kaplan (centrist) at 1740, and Kashkari (dove) at 2300. All are non-voters in 2019, although the latter two join the voting group next year (which is only nine weeks away). There are rate decisions on PLN (hold expected) and MYR (25bp cut expected)

01:45 CNY China Caixin Services PMI

03:30 AUD RBA Rate Decision/Statement (e0.75% hold)

09:30 GBP UK Markit Services PMI

13:30 USD US Trade Balance

13:30 CAD Canada Trade Balance

14:30 NZD NZ GDT Milk Index

14:45 USD US Markit Services/Composite PMI

15:00 USD US ISM Non-Manufacturing PMI (e53.2 p52.6)

21:45 NZD NZ Jobs/UnEmp/Labour Cost Q3 (Jobs e0.3% p0.8%)

23:50 JPY BoJ Monetary Policy Meeting Minutes

Wednesday November 06

Another three Fed speakers today, Evan (dovish, voter 2019) at 1300, Williams (dovish, voter 2019 and 2020) at 1430 and Harker (voter 2020, hawkish) at 2015. Chinese ‘BAT’ stock BIDU reports after the bell. There is a rate decision on THB (25bp cut expected)

07:00 EUR Germany Factory Orders

08:55 EUR Germany Markit PMI Composite

09:00 EUR Eurozone Markit PMI Composite

10:00 EUR Eurozone Retail Sales

13:30 USD US Nonfarm Productivity/Unit Labor Costs

15:00 CAD Canada Ivey PMI

Thursday November 7

Two of the four women on the FOMC speak today, Daly (non-voter) at 1645 and Brainard (voter 2019 and 2020) at 0130 Friday. DJIA stalwart DIS reports after the bell. There is a rate decision on CZK (hold expected).

00:30 AUD Aus Imports/Exports/Trade Balance

07:00 EUR Germany Industrial Production

12:00 GBP BoE Rate Decision/Statement (e0.75% hold)

13:30 USD US Jobless Claims

Friday November 8

The main event of the day is the Michigan Consumer Sentiment Index, a further fall has bee estimated. The Canadian NFP is today, this month a week later than the US equivalent.

01:30 AUD RBA Monetary Policy Statement

07:00 EUR Germany Trade Balance

07:00 CNY China Imports/Exports/Trade Balance

13:30 CAD Canada NFP/AHE/Unemp (UnEmp e 5.7% p5.5%)

15:00 USD Michigan CSI (e94.7 p95.5)

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.