Sunday, 10 October 2021

Week to Oct 7th

V-Shaped flat week, Big NFP Miss, Oil holds highs
MY CALL THIS WEEK : SELL CADJPY


THIS WEEK


In a week of continuing two-way volatility, stock markets initially tested lower and reversed into strong rallies. Two of the major headwinds for risk markets were partially resolved or at least delayed. Firstly, the problematic rally in natural gas and oil took a breather after Russia agreed to increase supplies and also the US energy secretary Jennifer Granholm raised the prospect of releasing emergency oil reserves. Soon after, the US debt ceiling crisis was again kicked down the road as the Senate approved a deal to increase the borrowing limit into December. It was a good week for US yields as the 10-year broke the September high and the USD consolidated recent gains near the yearly highs.  The surprisingly low NFP at 194k (albeit with with +169k previous revisions) left equity traders confused, and markets hardly moved Friday. The dollar only had a brief spike down. 


WEEKLY PRICE MOVEMENT

The biggest mover this week was NKY, down 2.51%. The top forex mover was CADJPY this week, up 2.45%. Bitcoin and ETH were nicely up. FANGs were very variable.
Very bad choice to buy NZDCAD, down 1.45% and taking my year to date profit down to 5.78% and 27/39 wins. However, I will stick to the reversal plan and sell CADJPY.




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

Earnings season opens next week, with as always, the banks. JPM is first out of the gate on Wednesday followed by BAC, WFC and C the next day and GS on Friday. DJIA health giant UNH also reports. In all cases, the estimates are materially lower than Q2 which means even if the banks beat (they usually do), there is no guarantee of further upward price movement. Notably, the financials sector estimates are underperforming the S&P as a whole for the first time in five quarters. It’s a relatively quiet week in sovereign data, with only inflation from the US (and Germany and China) of note. With US PPI also reporting on Thursday, any mismatch between raw material and finished goods prices will be highlighted. The FOMC minutes on Wednesday will be scrutinised, of course, but unlikely to move markets. The week ends with the start of the IMF conference.


CALENDAR (All times GMT, high volatility items in bold)

Monday October 11
02:00 China FDI (time approx.)
10:00 UK NIESR GDP Estimate (time approx.)

Tuesday October 12
06:00 UK Claimant Count/AHE/UnEmp (UnEmp e4.5% p4.6%)
09:00 Eurozone ZEW Economic Sentiment
09:00 Germany ZEW Economic Sentiment
23:30 Aus Westpac Consumer Confidence

Wednesday October 13
02:00 China Imports/Exports/TB
06:00 UK Manuf/Ind Production
06:00 UK GDP MoM
06:00 Germany CPI (e3.4% p4.1%)
09:00 Eurozone Ind Production
12:30 US CPI (e4% p4%)
14:30 BoE Cunliffe speech
18:00 FOMC Minutes
18:00 US Monthly Budget Statement
22:00 RBA Debelle speech

Thursday October 14
00:00 Aus Consumer Inflation Expectations
00:30 Aus NFP/UnEmp (NFP e-120k, p-146.3k)
01:30 China CPI (e0.9% p0.8%)
04:30 Japan Industrial Production
12:30 US PPI
12:30 US Jobless Claims
12:30 Initial Jobless Claims 4-week average
17:00 Fed Williams speech

Friday October 15
00:00 IMF Meeting (all day)
02:00 China NBS Press Conference
02:00 China Retail Sales (p2.5%)
10:30 Germany 10Y Bond Auction (time approx.)
12:30 US Retail Sales (e-0.2% p0.7%)
14:00 Michigan CSI (e74 p72.8)

Sunday, 3 October 2021

Week to Oct 1st

End of quarter, SPX worst week of the year, Dollar makes 2021 highs
MY CALL THIS WEEK : BUY NZDCAD


LAST WEEK


The raising of the debt ceiling prompted a rise in yields, which together with other negative factors such as the energy crisis, and Chinese slowdown meant SPX had its worst week of 2021, and worst month of the year, whereas the safe-haven dollar had its best week since June, making new 2021 highs, with all pairs except CAD down. The risk-off mood gave the DJI/NDX ratio its best week since May as NDX touched July lows. Oil also touched July highs, and is less than a dollar away from a seven-year high.


WEEKLY PRICE MOVEMENT

The biggest mover this week was NKY, down 4.89%. The top forex mover was NZDCAD this week, down 1.28%. Bitcoin and ETH bucked the general trend and were up over 12%.  FANGs were generally down as much as NDX.

My CADJPY short lost 0.29% taking my year to date profit to 7.23% and 27/38 wins. This week I will try the reversal strategy and buy 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.


NEXT WEEK (all times are GMT)

In September, Fed Chair Powell noted it'll take one more "decent" jobs report to set the taper wheels in motion - not a "super-strong" one, just one that's "reasonably good". This week’s estimate of 500K, if met or exceeded should do the trick. The market response will show how much taper is already priced in, after September’s 4% drop, the worst month since the pandemic started. We are at a juncture, DJIA has just bounced off the SMA200d as it did last November, but historically October is the second-worst month (after September!) for equities.  Our research suggests NFP week is usually positive, and next week onwards earnings will be the main driver.

On Monday, OPEC meet to review output. The current plan is to increase output by 400kbpd, the latest ‘tapering’ of the cuts. However, given that the price of oil is over $75, a level it has not breached for seven years, and recovery demand being stronger than expected, the committee may well agree a larger increase. Unusually, the market has not priced this in yet.

On Wednesday, COVID fortress New Zealand (only 4,000 cases and 27 deaths), which has already ended QE, is almost certain to double the NZD base rate to 0.5%, being the first of the major six to do so, and third overall (after KRW and NOK).


CALENDAR (High volatility items in bold)

Monday October 4
08:00 OPEC Meeting
14:00 US Factory Orders
21:30 Aus AiG Construction Index
22:00 Aus Commonwealth Bank Svcs PMI
23:30 Tokyo CPI

Tuesday October 5
00:00 Aus TD Securities Inflation
00:30 Aus Imports/Exports/TB (TB e10.6B p12.1B)
03:30 RBA Rate Decision/Statement (e0.1% hold)
07:55 Germany Markit Composite PMI
08:00 Eurozone Markit Composite PMI
12:30 US Trade Balance
12:30 Canada Trade Balance
13:45 US Markit Svcs/Comp PMI
14:00 ISM Services PMI (e59.8 p61.7)
17:15 Fed Quarles speech

Wednesday October 6
01:00 RBNZ Rate Decision/Statement (e0.5% p0.25%)
06:00 Germany Factory Orders
09:00 Eurozone Retail Sales
12:15 US ADP

Thursday October 7
05:00 Japan Leading Economic Index
06:00 Germany Industrial Production
11:30 ECB MPC Accounts
12:30 US Jobless Claims
12:40 Fed Williams speech
14:00 Canada Ivey PMI
16:00 BoC Governor Macklem speech
23:30 Japan Household Spending/Current Account

Friday October 8
01:45 China Caixin Services PMI
06:00 Germany Trade Balance
12:30 US NFP/AHE/UnEmp (NFP e500k p235k)
12:30 Canada NFP/AHE/UnEmp (UnEmp p7.1%)

Saturday, 25 September 2021

Week to Sep 24th

Brief dip on China Evergrande crisis, bonds and JPY underperform
MY CALL THIS WEEK : SELL CADJPY


LAST WEEK

The Chinese Evergrande crisis caused a weekend gap down (SPX 0.69%, NDX 1.73%) and equity markets spent the rest of the week filling the gap. This was helped by a slightly dovish take (vs expectations) on taper. The Fed offered no taper timetable, but a slight move up in the dot plot. Yields, which take a longer view, rallied on the latter. A sharp dip in EURUSD recovered the next day. An initial post-BoE rally in sterling quickly retracted. A strong oil-led loonie and weak equity recovery yen led to an overall flat dollar base for the week. Gold similarly had a flat week, and Oil rallied slightly towards the end of the week.


WEEKLY PRICE MOVEMENT

The biggest mover this week was FTSE again, up 1.26% after being down 0.93%. The top forex mover was CADJPY this week, up 1.64%. Bitcoin and ETH were down with the general risk-off. FANGs were generally flat as was NDX.

My second week buying EURNZD buy made another 0.32% taking my year to date profit to 7.52% and 27/37 wins. This week I will go with my reversal strategy and sell CADJPY.




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)


The final week of Q3 reports CPI from Germany and Eurozone, and US Personal Consumption Expenditure, the Fed’s preferred inflation metric. Otherwise the week is largely PMI reports, and volatility is as likely to come from end of month and quarter repositioning as it is from scheduled news. Of more interest is the next stage in the Chinese Evergrande saga, where further payment deadlines arise next week. In politics, we have the German election on Sunday, with the replacement of titan Angela Merkel after 16 years, although the new Chancellor and indeed the coalition makeup will not be known for days or weeks. More immediately is Japan’s LDP leadership vote, with maverick vaccines minister Taro Kono fighting it out with traditional and bland Fumio Kishida. The first round, with two other (female) candidates is on Wednesday.



CALENDAR (High volatility items in bold)

Monday September 27

12:30 US Durable/ND Capital Goods (Core DG e0.5% p0.8%)

23:50 BoJ MPC Minutes


Tuesday September 28

00:30 Australia Retail Sales (e-2.4% p-2.7%)

06:00 Germany Gfk Consumer Confidence

13:00 US Housing/Home Price Indices

14:00 US Consumer Confidence(Sep)

23:50 Japan Retail Sales


Wednesday September 29

09:00 Eurozone Consumer Confidence/Business Climate

14:00 US Pending Home Sales

23:50 Japan Industrial Production


Thursday September 30

01:00 China PMIs (Mfr e50.2 p50.1)

06:00 UK Final Q2 GDP (e-1.5% p4.8%)

07:55 Germany Unemployment Rate/Change

09:00 Eurozone CPI (Core p1.6%)

09:00 Eurozone Unemployment

12:00 Germany CPI (MoM e0.1% p0.9%))

12:30 US PCE QoQ

12:30 US Jobless Claims

12:30 US GDP Annualised (e6.6% p6.6%)

13:45 Chicago PMI

23:30 Japan Jobs/UnEmp

23:50 Japan Tankan Large Manufacturing Index (e13 p14)


Friday October 1 

00:30 Aus Building Permits

01:45 Caixin Manufacturing PMI(Sep)

06:00 Germany Retail Sales (MoM e1.5% p-5.1%)

07:55 Germany Markit Mfr PMI

08:30 UK Markit Mfr PMI

12:30 US PCE MoM & YoY

13:30 Canada Markit Mfr PMI

13:45 US Markit Mfr PMI

14:00 US ISM Mfr PMI (e59.9 p59.9)

14:00 Michigan CSI

Sunday, 19 September 2021

Week to Sep 17th

Equities down, dollar up into OpEx, Oil bucks trend
MY CALL THIS WEEK : BUY EURNZD


LAST WEEK

Equity markets were weak across the board, with notably DJI outperforming NDX by 0.71%, and only recent star NKY posting a green candle to a new eight month high. The fade was exacerbated by OpEx on Friday, with indices closing at lows. After several moribund days, the dollar rose sharply on Thursday’s blowout Retail Sales figure, where the monthly ‘Control Group’ ie core printed +2.5% vs a -0.1% estimate (raw figure was +0.7% vs -0.8%). USDJPY rose 0.27% in 10 minutes, and 0.41% in an hour. DXY closed the week at a four-week high. Gold tracked the dollar to touch five-week lows. 10-year yields (and the 10-2 curve) stayed range bound, although notably the long curve (30-10) touched 0.536%, an 18-month low. It was a good week for oil bulls (and thus XLE +3.20% against -0.57% SPX), but of course, adding fuel to the fire (excuse the pun) of the global transport supply and cost crisis. (Notably DJT -0.67%) fell further than SPX.


WEEKLY PRICE MOVEMENT

The biggest mover this week was FTSE, down 0.93%, making an 8-week low and back under 7,000. The top forex mover was AUDUSD this week, down 1.02%. Bitcoin and ETH were slightly up. FANGs generally followed NDX.

My EURNZD buy made 0.32% taking my year to date profit to 7.20% and 26/36 wins. I will stay with buying EURNZD as this move does not appear to be done yet.




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)

The key event in the penultimate week of September is the FOMC meeting. A rate hold is 100% priced in, but traders will be looking for firm hints, or possibly even a calendar for the taper program, although this is hampered by the poor jobs print this month. There are also three other rate decisions, in China, Japan and UK. Other than that, only PMI data is of any significance.


CALENDAR (High volatility items in bold)

Monday September 20
06:00 Germany PPI

Tuesday September 21
01:30 RBA Meeting Minutes
12:30 US Building Permits/Housing Starts

Wednesday September 22
00:30 Aus Westpac Leading Index
01:30 PBoC Interest Rate Decision (e3.85% hold)
02:00 RBA Bullock speech
03:00 BoJ Rate Decision/Statement (e-0.1% hold)
06:00 BoJ Press Conference
14:00 Eurozone Consumer Confidence
18:00 Fed Rate Decision/Statement (e0.25% hold)
18:30 FOMC Press Conference
23:00 Aus Commonwealth Bank PMIs

Thursday September 23
07:30 Germany Markit PMIs (Mfr e65.0 p62.6)
08:00 Eurozone Markit PMIs (Comp e59.7 p59.0)
08:30 UK Markit Mfr/Svcs PMI (Svcs p55.0)
11:00 BoE Rate Decision/Statement (e0.1% hold)
12:30 US Jobless Claims
12:30 Canada Retail Sales (e4.4% p4.2%)
13:45 US Markit PMIs

Friday September 24
08:00 Germany IFO Sentiment Indicators
14:00 New Home Sales (MoM)(Aug)

Saturday, 11 September 2021

Week to Sep 10th

NDX outperforms, NKY rally continues, Currencies flat
MY CALL THIS WEEK : BUY EURNZD


LAST WEEK

In a week of continued heavy rotation, the NDX was the only stock market to make new all-time while the NKY rally continued unabated. Central bank tapering once more dominated the narrative, with the RBA, the BoC and the ECB all taking turns in the spotlight. In a small but potentially significant hawkish shift, the ECB lowered its asset purchases if only to restore them to previous levels. This did little to shift a sluggish Euro and EU yields actually dropped sharply following the meeting. Meanwhile, the USD traded an inside week while US 10-year yields made a new recovery high only to fade again.



WEEKLY PRICE MOVEMENT

The biggest mover this week was again NKY, up 4.30% bucking the trend elsewhere. The top forex mover was AUDUSD this week, up 1.38%. Bitcoin and ETH fell sharply. FANGs were very mixed.

My GBPCAD buy made 1.14%, reversing last week's loss, and taking my year to date profit to 6.88% and 25/35 wins. This week I am buying EURNZD, it seems to be at support. This NKY rally will end and JPY will rally, but not yet.





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)

Next week is lighter than usual on data, with inflation the main focus, as the US, UK, Canada and Eurozone report. However, as inflation has already reached 'the target' for taper everywhere except Eurozone, the prints assume less significance than in previous months. Friday is quarterly OpEx, the so-called triple witching, which includes the important index options (SPY, QQQ etc.). Markets will probably spend the whole week looking for clues to the Fed 22 September meeting.


CALENDAR (High volatility items in bold)

Monday September 13
18:00 US Monthly Budget

Tuesday September 14
01:30 Aus House Price Index
04:30 Japan Industrial Production
06:00 UK Claimant Count/AHE/UnEmp (UnEmp e4.8% p4.7%)
12:30 US CPI (MoM e0.3% p0.3%)

Wednesday September 15
00:30 Aus Westpac Consumer Confidence
02:00 China Retail Sales (YoY e11.5% p8.5%)
06:00 UK CPI (YoY e2.3% p2.0%)
09:00 Eurozone Labor Cost/Ind Production
12:30 Canada BoC CPI (p3.3%)
23:50 Japan Imports/Exports/TB

Thursday September 16 
01:00 Aus Consumer Inflation Expectations
01:30 Aus NFP/UnEmp (UnEmp e5.0% p4.6%)
12:30 US Retail Sales (Control Group Aug e-0.1% p-1%)
12:30 Philly Fed Manufacturing Survey
12:30 US Jobless Claims

Friday September 17
06:00 UK Retail Sales
09:00 Eurozone CPI
14:00 Michigan CSI

Monday, 6 September 2021

Week to Sep 6th

Another ATH, NFP Miss, Weak USD
MY CALL THIS WEEK : SELL GBPCAD


LAST WEEK

In a week of new all-time highs for SPX and NDX, and lower highs for DJI and the majority of other global stock markets, the main focus was Friday’s NFP print and whether it would be strong enough to pave the way for a taper announcement in September’s FOMC meeting. In the end, the significant miss of 235k was likely weak enough to delay any announcement till November at least.  The USD was understandably weak and was also pressured by a stronger Euro, buoyed by hawkish comments from several members that suggest taper discussions are not completely one-sided, making next week’s ECB meeting all the more interesting.


WEEKLY PRICE MOVEMENT
The biggest mover this week was NKY, up 5.38%. The top forex mover was again NZDUSD this week, up 2.00%. Bitcoin was flat but ETH moved sharply up. FANGs were generally much stronger than NDX itself.

My GBPAUD buy was a bad one, I lost 1.11% taking my year to date profit to 5.74% and 24/34 wins. This week I am shorting GBPCAD.




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)

The vacation period traditionally ends this week with Labor Day on Monday when US markets are closed. In any event, the focus for the week is outside the US with rate decisions in Australia, Canada and most importantly the Eurozone. The ECB is the laggard in tightening hints, and traders will be keen to see if their stance has changed. Also this week are inflation figures from China, and Germany, and GDP prints from Eurozone, Japan and the UK.


CALENDAR (High volatility items in bold)

Monday September 6
01:00 Aus TD Securities Inflation
06:00 Germany Factory Orders s.a. (MoM)(Jul)
23:30 Overall Household Spending (YoY)(Jul)

Tuesday September 7
02:00 China Imports/Exports/TB (time approx.)
04:30 RBA Rate Decision/Statement (e0.1% hold)
05:00 Japan Leading Economic Index
06:00 Germany Industrial Production
09:00 Eurozone ZEW Economic Sentiment
09:00 Eurozone Q2 Final GDP (e-0.6% p2.0%)
09:00 Germany ZEW Sentiment Indicators
23:50 Japan Q2 Final GDP (e0.4% p0.3%)

Wednesday September 8
08:10 RBA Debelle speech
10:00 DE10Y Bond Auction (time approx.)
14:00 Canada Ivey PMI
14:00 BoC Rate Decision/Statement (e0.25% hold)
17:10 Fed Williams speech
18:00 Fed Beige Book

Thursday September 9
01:30 China CPI (e1.0% p1.0%)
06:00 Germany Trade Balance
08:35 RBA Debelle speech
11:45 ECB Rate Decision/Statement (e0% hold)
12:30 US Jobless Claims
12:30 ECB Lagarde Presser
16:00 BoC Governor Macklem speech
18:00 Fed Williams speech

Friday September 10 
06:00 UK Manuf/Ind Production
06:00 UK GDP MoM
06:00 Germany CPI (e3.4% p3.4%)
12:30 US PPI
12:30 Canada NFP/AHE/UnEmp (UnEmp e7.4% p7.5%)

Saturday, 28 August 2021

Week to Aug 27th

SPX & NDX ATH, Dollar falls after Jackson Hole
MY CALL THIS WEEK : BUY GBPAUD


LAST WEEK


In a week where strong action came on Monday’s ramp higher in stocks and oil, bad news/data was perceived as good for the market. Weak PMIs and Capital Goods reports globally dampened expectations for a taper announcement in the week’s main event at Jackson Hole and sent the SPX and NDX to new all-time highs. Powell’s Friday Jackson Hole speech confirmed that the inflation target had been met (no more talk of ‘transitory’) but that further job recovery was needed. This was more dovish than expected, and pushed stocks up further, and the dollar sharply down.

This meant that USD failed to hold last week’s break to new 2021 highs, posting an inside week. EURUSD spent the majority of the week above 1.17, also having an inside week as did the majority of currencies. Gold however broke out to a 3-week high. Yields surprisingly held up despite the dollar decline, and Oil fully reversed last week’s decline in line with the equity risk-on move.

Meanwhile, developments in New Zealand continue to be interesting, particularly as they are the G10 bank most advanced in normalizing rates. Assistant Governor Christian Hawkesby told Bloomberg that they were ready to raise rates last week and that policy decisions are not tightly linked to COVID and lockdowns. However, they held back on the hike as it would have been announced on the same day as the start of a national lockdown. 


WEEKLY PRICE MOVEMENT

The biggest mover this week was NKY, up 2.32%. The top forex mover was again AUDJPY this week  up 2.58%. Crypto was extremely flat, I cannot remember seeing weekly moves of less than 1%. FANGs were strong, following the risk-on NDX.

My CADJPY buy made 1.44% taking my year to date profit to 6.85% and 24/33 wins. This week I am buying GBPAUD as it is at support.




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)

Next week is the final week before the vacation season ends on Labor Day. A new month means of course NFP, and the estimate of 763k is in line with previous months. This print is crucial, as Fed Chair Powell indicated last week that with the inflation target met, only 
Otherwise, the week is packed with non-US data, including Eurozone and German inflation, Japanese and German Retail Sales, and PMIs from every territory including the important US ISM prints, both of which estimate slight pullbacks.


CALENDAR
High volatility items in bold

Monday August 30
23:50 Japan Retail Sales (Sun)
09:00 Eurozone Consumer/Industrial Confidence(Aug)
12:00 Germany CPI (e2.9% p3.1%)
12:30 Canada Current Account(Q2)
14:00 US Pending Home Sales
23:30 Japan Jobs/Unemployment

Tuesday August 31

01:00 China NBS PMIs (Services e50.8 p50.4)
01:00 Aus TD Securities Inflation
01:30 Aus Building Permits
07:55 Germany Unemployment
09:00 Eurozone CPI (YoY 2.5% p2.2%)
12:30 Canada Q2 Final GDP (e6.7% p5.6%)
13:00 US Housing/Home Price Indices
13:45 Chicago PMI
14:00 US Consumer Confidence
22:30 Aus AiG Performance of Mfg Index

Wednesday September 1 
01:30 Aus Q2 Final GDP (e1.6% p1.8%(
01:45 Caixin Mfr PMI
06:00 Germany Retail Sales (e3.2% p6.2%)
07:55 Germany Markit Mfr PMI
08:30 UK Markit Mfr PMI
09:00 Eurozone Unemployment
12:15 US ADP Employment Change (e575k p330k)
13:30 Canada Markit Mfr PMI
13:45 US Markit Mfr PMI
14:00 ISM Mfr PMI (e59.1 p59.5)

Thursday September 2
01:30 Aus Imports/Exports/TB (TB p-10.5B)
12:30 US Trade Balance
12:30 US Jobless Claims
12:30 Canada Trade Balance
14:00 US Factory Orders
22:30 Aus AiG Performance of Construction Index
23:00 Aus Commonwealth Bank Services PMI

Friday September 3
01:45 China Caixin Services PMI
07:55 Germany Markit Composite PMI
08:00 Eurozone Markit Composite PMI
09:00 Eurozone Retail Sales (p5.0%)
12:30 US NFP/AHE/UnEmp (e763k p943k)
13:45 US Markit Services PMI
13:45 US Markit Composite PMI
14:00 ISM Services PMI (e63.0 p64.1)

Saturday, 21 August 2021

Week to Aug 20th

FOMC Minutes break SPX run, Dollar makes 9-month high
MY CALL THIS WEEK : BUY CADJPY



LAST WEEK

The 10-week run of new highs in SPX ended this week, which fell sharply as the FOMC minutes confirmed that taper is on the agenda. The events in Afghanistan did not help, not did the US Retail Sales miss. The dollar hit a nine-month high (and currencies hit a corresponding low). Notably the yen’s move was more muted, and Gold actually managed a small advance.Oil fell for the third week as it returns to its medium-term mean.



WEEKLY PRICE MOVEMENT


The biggest mover this week was NKY, down 3.45%. The top forex mover was AUDJPY down 2.95%. Crypto was flat after recent strong gains. FANGs were again varied, with NFLX bucking the general trend.


My AUDNZD short made 0.27% taking my year to date profit to 5.41% and 23/32 wins. This week I am buying CADJPY.





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)


Next week is dominated by the annual Jackson Hole symposium, and of course the big question, when is taper time, and of course the trajectory of the taper. Inflation is over 2%, and the Initial Jobless figure finally started to fall last week, although it is still elevated, over five million pre-pandemic jobs are still missing, and COVID is still persistent in many states and other countries. Chair Powell speaks on Friday.


In other news, a raft of PMIs predict a slight pullback after months of growth. PCE, the Fed’s preferred inflation metric reports on Thursday and Friday, but otherwise there is nothing major.



CALENDAR

High volatility items in bold


Monday August 23

00:00 Aus Commonwealth Bank PMIs

08:30 Germany Markit PMIs (Mfr e65 p65.9)

09:00 Eurozone Markit PMIs (Comp e60.1 p60.2)

09:30 UK Markit Mfr/Svcs PMI

13:30 Chicago Fed National Activity Index

14:45 US Markit PMIs

15:00 Eurozone Consumer Confidence


Tuesday August 24

07:00 Germany GDP

15:00 US New Home Sales


Wednesday August 25

00:55 RBA Ellis speech

06:00 Japan Leading Economic Index

09:00 Germany IFO Sentiment Indicators

13:30 Durable/ND Capital Goods (NDC e0.5% p0.7%)


Thursday August 26

07:00 Germany Gfk Consumer Confidence

12:30 ECB MPC Minutes

13:30 US Core PCE QoQ

13:30 US Jobless Claims

13:30 US Q2 Prelim GDP (e6.6% p6.5%)


Friday August 27

00:30 Tokyo CPI

02:30 Aus Retail Sales (p-1.8%)

13:30 US Core PCE MoM/YoY

15:00 Michigan CSI

15:00 Fed Chair Powell speech

Sunday, 15 August 2021

Week to Aug 13th

Tenth week of SPX ATHs, Dollar down on inflation and consumer sentiment
MY CALL THIS WEEK : SELL AUDNZD



LAST WEEK


Equity markets rose smoothly all week on a succession of good news. On Tuesday the Senate passed the $1Trn infrastructure bill, a rare bipartisan success with 17 GOP members supporting the President. Markets were given a further lift (and the dollar depressed) by another strong, although not too strong inflation print, and the dollar fell further on the Michigan CSI miss on Friday, taking yields down with it. SPX posted its tenth weekly all-time high, and DJI its third. Gold and currencies rose on the weaker dollar. Oil had a fairly flat week.



WEEKLY PRICE MOVEMENT

The biggest mover this week was DAX, up 1.37%. The top forex mover was GBPJPY down 0.59%. Crypto had another strong week. FANGs were very varied.

My GBPCAD long lost 0.38% taking my year to date profit to 5.14% and 22/31 wins. This week I am selling AUDNZD.





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)


Next week’s calendar is quite busy, although the focus is not on the US. The key prints are CPI for the UK, Eurozone and Canada, and their corollary Retail Sales for the US, China and Canada, as inflation is currently the macro metric in focus. The FOMC minutes from the July 28 meeting will be scrutinised for precise wording. Earnings season moves into the retailer phase, with WMT reporting first as usual on Tuesday. Finally, it is OpEx week, with monthly options expiring on Friday.



CALENDAR


Monday August 16

23:50 Japan Q2 Prelim GDP (Sun) (e0.2% p-1.0%)

02:00 China Retail Sales (e11.5% p12.1%)

04:30 Japan Industrial Production


Tuesday August 17

01:30 RBA Meeting Minutes

06:00 UK Claimant Count/AHE/UnEmp (UnEmp e4.7% p4.8%)

09:00 Eurozone Q2 Prelim GDP (YoY e13.7% p13.7%)

12:30 US Retail Sales (Control Group Jul e0.4% p1.1%)

23:50 Japan Imports/Exports/TB


Wednesday August 18

00:30 Aus Westpac Leading Index

01:30 Aus Wage Price Index

06:00 UK CPI (e2.2% p2.5%)

09:00 Eurozone CPI

12:30 US Building Permits/Housing Starts

12:30 Canada BoC CPI (p2.7%)

18:00 FOMC Minutes


Thursday August 19

01:30 Aus Jobs/UnEmp (Jobs p29.1k)

12:30 Philly Mfr Survey

12:30 US Jobless Claims

23:05 RBA Kent speech

23:30 Japan National CPI


Friday August 20

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

06:00 UK Retail Sales

06:00 Germany PPI

12:30 Canada Retail Sales (e-3.0% p-2.1%)