Monday, 12 April 2021

Week to Apr 19th

ISM Services PMI beat, Further all time highs, Dovish Fed

A strong US Services PMI beat started another positive week as stocks drifted up, helped by dovish FOMC minutes. It was moderate but solid risk-on, with NDX outperforming and DXY declining smoothly all week, helping Gold. SPX and DJI, unlike RUT and NDX posted new all-time highs, as did DAX and the MCSI World Index. Yields ranged finishing down but in last week’s range, as did Oil.

Next week is the start of earnings season, with JPM, C and GS leading the way as always. In practice surprises are unlikely, but with markets at elevated levels, the risks are to the downside. Before earnings comes US inflation on Tuesday. The estimate is up on the last month, and a beat could cause taper concerns.

Mon Apr 5

Friday’s rally continued with even further vigor today helped by the ISM Services PMI beat. SPX was up 1.44% and NDX even further. Europe was closed but DAX futures hit an all-time high The safe haven dollar was down. Yields were slightly down, and surprisingly so was Oil. Gold was flat on the day.

Tuesday April 6

US market were slightly off today, rotating into Europe to post an ATH for SX5E, the first since the pre-pandemic high over a year ago. Of the major indices, only FTSE is still below the Feb 2020 level. The dollar fell again, pushing Gold up. Bonds were also up, and Oil recovered somewhat.

Wednesday April 7

A flat day throughout asset class land, with equities, gold, oil and the dollar, although both all showed a slight blip upwards after the dovish FOMC minutes. FTSE advanced on a weaker dollar, but both DAX and SX5E retreated.

Thursday April 8

The Fed message had more effect today, with another rally across the board. DAX and now the MCSI World Index posted all-time highs. The dollar duly fell pushing Gold up again, and yields down. Oil was flat on the day.

Friday April 9

In a move similar to the previous Friday, markets rallied hard into the close, with for once, DJIA outperforming NDX, after four days of tech outperformance, and posting a new ATH, as did the MSCI World. The dollar reversed up after declining all week. Gold, bonds and Oil were all down.


A week of rotation back into NDX made it the top index, up 3.87%. The top forex pair was EURGBP up 1.95%. Cryptos were fairly flat (by their standards, ie under 5%), and FANG again outperformed NDX as a whole.

My strategy of the most extreme pair last week worked, but hardly at all, up 0.03%, taking the total to -1.03% 9/13 wins. I will try it again and sell EURGBP hoping for a reversion to mean.

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)

  • Q1 Earnings season opens
  • US inflation expected to rise
  • Early Chinese GDP
  • US Retail Sales, German inflation

Monday April 12

As is often the case, a quiet Monday with no US releases.

09:00 Eurozone Retail Sales (YoY e-5.7% p-6.4%)

14:30 BoC Business Outlook Survey

17:00 Fed Rosengren speech

18:00 US Monthly Budget Statement(Mar)

Tuesday April 13

The US inflation reports dominates today, too high and it might worry traders that the Fed may tighten policy.

02:00 China Imports/Exports/TB

06:00 UK Mfr/Ind Production

06:00 UK GDP

08:00 UK NIESR GDP Estimate (time approx.)

09:00 Eurozone ZEW Economic Sentiment

09:00 Germany ZEW Economic Sentiment

10:30 DE10Y Bond Auction (time approx.)

12:30 US CPI (YoY e1.6% p1.3%)

Wednesday April 14

Earnings season opens today, as usual with JPM first out of the gate. WFC and GS also report today. Markets are closed in India.

00:30 Aus Westpac Consumer Confidence(Apr)

01:00 RBNZ Rate Decision/Statement (e0.25% hold)

09:00 Eurozone Industrial Production s.a. (MoM)(Feb)

18:00 Fed Beige Book

18:30 Fed Williams speech

Thursday April 15

The second day of earnings season has BAC, C and top Dow component UNH (7.32%). Today would normally be US Tax Day, but this year the filing deadline has been extended to May 17. There are rate decisions in S.Korea and Turkey.

01:00 Aus Consumer Inflation Expectations(Apr)

01:30 Aus NFP/UnEmp (NFP e35k p88.7k)

06:00 Germany CPI (e2% p2%)

12:30 US Retail Sales (Control Group e-0.9% p-3.5%)

12:30 Philly Fed Mfr Survey(Apr)

12:30 US Jobless Claims(Apr 9)

Friday April 16

There are Eurogroup and EcoFin meetings all day today.

02:00 China Q1 GDP (YoY e18.6% p6.5%) 

02:00 China Retail Sales/Industrial Production

09:00 Eurozone CPI

12:30 US Building Permits/Housing Starts

14:00 Michigan CSI (e88.9 p84.9)

Sunday, 4 April 2021

Week to Apr 2nd

Four day Easter week, SPX breaks 4,000, Blowout NFP on Good Friday

In a shortened Easter week, the S&P500 and DJI closed the month of March and the first quarter near all-time highs, setting up continuation in April, the most bullish month of all for the S&P500 which duly ramped through 4000 on the first of the month. Yields continued higher with the 10Y making a new high of 1.77% proving yet again that a yield rally under the right conditions is bullish for the stock markets. Even the weakened Nasdaq and high growth names put in a strong reversal higher with Tesla making a 17% gain in 3 sessions.  

It was a slow news week, with the highlight, NFP, coming after the markets closed for the Easter break. An inflation beat in the Eurozone did little to lift the Euro which slid to 1.17 against the USD. The OPEC+ meeting finally saw the group decide to curb cuts, but only gradually with 350k bbd coming back on line in May. Oil stayed steady all week even with President Biden’s $2.3trn infrastructure plan focusing on clean energy and electric vehicles.  

Next week sees President Biden’s infrastructure bill go to Congress. This bill could add up to 1% to the current 5.2% GDP estimate, and the benefits would largely flow to industrials, possibly increasing the rotation out of tech we have seen recently.

However, the bill also includes the restoration of the 28% corporation tax rate, reversing Trump’s 7% cut in 2017. This translates to an approximate 7.4% hit on SPX earnings (a 280 point drop), but have less effect on tech. Note that corporate earnings are expected to increase by 24.2% from their position a year ago. Remember EMH would suggest all this is priced in. SPX is currently 19% ahead of its pre-pandemic high in Feb 2020. NDX is 38.3% higher.

Note of course that although Congress is all blue, it would only take one Democrat to stall the tax hikes in the Senate. The degree of debate may of course take us into the following week’s earnings season opening, which then adds an additional dimension to what is priced in.

Also this week we get the minutes from the Fed’s Mar 17 meeting and the seven-day Spring Meeting of the IMF and World Bank all week at which Chair Powell speaks on Thursday. Scheduled releases are thin, with only the RBA rate decision and Canadian NFP of note.

Mon Mar 29

Indices were flat today overall, however some bank shares took a hit on the failure of Archegos Capital, a hedge fund. Credit Suisse and Nomura were hit worst. The dollar continued to rise in line, pushing gold down and yields rose. Oil was slightly up.

Tuesday March 30

Stocks fell today, with NDX hit worst as the rotation into post-pandemic stocks started again. European indices rose, partly due to weak currencies again a strong dollar (DXY +0.45%), and a rise in German inflation from 1.6% to 2%. Gold fell even more (GLD -1.71%) in line with the dollar, and Oil reversed. Bonds were flat on the day.

Wednesday March 31

A summary of the $2trn Biden plan was released today, which includes huge spending and also tax hikes. Whether it will be passed is another matter. Most sectors were flat or down, but tech shares (more immune to tax hikes) rose, reversing yesterday’s rotation. A lot of the move was in the afternoon, suggesting end of month positioning may also have been an effect. USD took a breather and pulled back (with Gold up). Oil which follows industrials was down. Yields were slightly down.

Thursday April 1

The new month and quarter opened with a further rally, with NDX outperforming, and SPX closing above the psychological 4,000 mark for the first time. It took 14 years for the doubling from 1,000 to 2,000, yet only six and a half from that point to 4,000.

The dollars was down and yields continued to fall in line producing an inverted-V week for both instruments. Gold was down in line. Oil was up to close the short week more or less flat.

Friday April 2

On Good Friday markets are closed almost everywhere, the exception being futures, forex and Japan. The blowout NFP (916k vs 647k) led to a rise in US and European futures indices, particular into the close. USD advanced notably as well. Gold, Oil and bonds were not traded.

A positive week for most indices with NDX the leader. GBPJPY was the top forex mover up 1.29%. Bitcoin was up, but ETC advanced much further, making an all-time high. FANGS were very strong, outperforming NDX.

I made 0.71% selling EURNZD, total to date -1.06% 8/12 wins. Let’s try the reversal of the biggest mover again and sell GBPJPY.

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)

  • Biden Infrastructure & Tax Bill
  • IMF/World Bank meeting
  • FOMC Minutes
  • RBA rate decision

Monday April 5

Today is Easter Monday and Ching Ming in Hong Kong. Almost everywhere except China, Japan and the Americas are closed. Expect light forex (London), but a possibly more volatile US. There is a rate decision in Chile.

01:00 Aus TD Securities Inflation

13:45 US Markit Svcs/Comp PMI

14:00 US ISM Svcs PMI (Mar) (e57.5 p55.3)

Tuesday April 6

Hong Kong is closed for a second day. The main news is the Australian rate decision.

01:45 Caixin Svcs PMI(Mar)

04:30 RBA Rate Decision/Statement (e0.1% hold)

09:00 Eurozone UnEmp Rate

22:00 Aus Commonwealth Bank Svcs PMI(Mar)

Wednesday April 7

Some attention will be paid today to the minutes from the Mar 17 Fed meeting, but otherwise only low-level data. There are rate decisions in India and Poland.

05:00 Japan Leading Economic Index

07:55 Germany Markit Comp PMI

08:00 Eurozone Markit Comp PMI

12:30 US Trade Balance

12:30 Canada Trade Balance

14:00 Canada Ivey PMI

18:00 US FOMC Minutes

23:50 Japan Current Account

Thursday April 8

In another light news day, Fed Chair Powell speaks online today at 1600 at the IMF Debate on the Global Economy.

06:00 Germany Factory Orders

11:30 ECB MPC Minutes

12:30 US Jobless Claims

16:00 Fed Chair Powell speech

Friday April 9

The week ends with the Canadian NFP, a week after the US. The IMF meeting continues into the weekend. There is a rate decision in Romania.

01:30 China CPI (e-0.4% p-0.2%)

06:00 Germany Trade Balance/Ind Production

12:30 US PPI

12:30 Canada NFP/AHE/UnEmp (NFP e75k p259.2k)

Monday, 29 March 2021

Week to Mar 26th

Powell/Yellen Testimony to Congress, Dollar breakout, Indices Consolidate

The Powell/Yellen testimony was considered hawkish (by current standards) pushing stocks down and the dollar up. Otherwise, another consolidation week, except for the dollar. Other asset classes either posted a true inside week (US10Y, Gold, DAX) or closed in last week’s range (all indices, Oil). DXY however hit new five-month highs. News-wise, there were few shocks, other than a wild unsustained spike in Gold on Thursday.

Next week sees the end of the month and first quarter, and of course another Non-Farm payrolls, this time with the highest estimate since November. It is Easter week, with four days trading into a four day holiday in many territories. An OPEC meeting on Thursday may break the current Oil consolidation. Other than that, a raft of PMIs, and European inflation (showing Germany breaking apart from the zone as a whole) complete a generally busy week.

Mon Mar 22

Markets rose today although only later in the day after yields had fallen. Slight concern about vaccinations meant COVID-immune NDX outperformed. There is also a notable correlation between bonds and NDX. The dollar continued the rally it started last week, pushing currencies and Gold down. Oil tends to run with industrials, as with DJI the weakest index today, it fell very slightly. Bonds were up.

Tuesday March 23

TreasSec Yellen’s hawkish assessment today, where she expected the US to return to full employment in 2022, which of course indicates an unwinding of QE. Stocks fell, NDX less so, as it is less affected by this. The dollar of course liked it, and was sharply up, meaning Gold, Oil and yields fell both in line with the dollar and equities.

Wednesday March 24

Upbeat PMI data pushed up traditional value stocks today, at the expense of tech, with energy stocks (and Oil) both up on the Suez Canal closure. Simple supply and demand. Less of the former, latter is constant. However everything fell again into the close after another day’s testimony from Powell and Yellen. The dollar continued upwards, and Gold was down in line. Bonds were up for a third day.

Thursday March 25

A weak auction of 7-year paper caused a reversal back down in bonds today. The equity market was up (SPX +0.52%) but again NDX notably underperformed (-0.14%). The dollar rallied for a third day, hitting a five-month high after two weeks of consolidation, pushing Gold and Oil down. When equities are only mildly positive, and the dollar moves strongly, Oil reflects the latter.

Friday March 26

The day was positive, but most of the rally was in the last hour, putting the indices in positive territory for the week. The dollar reversed after three strong days, and this was reflected in Gold and Oil, the latter being assisted by the Suez issue. Bonds were down in line with the equity rally.


Yet another consolidating week for all assets except the dollar. The top index mover was NKY, down 2.07% although 0.63% of this can be attributed to JPY’s move. The top forex mover was NZDUSD down 2.08%. Crypto pulled back slightly, and FANGs slightly underperformed NDX.

I wish I’d stuck with JPY for a third week, but my short of GBPUSD was up 0.57%. Total to date -1.78%, with 7/12 win. This week I think the NZD drop is overdone, and will sell 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 sees the end of the month and first quarter, and of course another Non-Farm payrolls, this time with the highest estimate since November. An OPEC meeting on Thursday may break the current Oil consolidation. Other than that, a raft of PMIs, and European inflation (showing Germany breaking apart from the zone as a whole) complete a generally busy week.

NEXT WEEK (all times are GMT)

(Calendar High volatility items are in bold)

  • Four day Easter week
  • Non-Farm Payrolls
  • UK and Germany inflation
  • OPEC and PMIs

Monday March 29

FTSE Russell should confirm that Chinese government bonds are included in their World Index today. If so, this is bullish for an already extended CNY.

23:30 Japan Jobs/Unemployment

23:50 Japan Retail Sales

Tuesday March 30

Two Fed speakers today, as we move into the close of the quarter.

09:00 Eurozone Consumer Confidence/Business Climate

12:00 Germany CPI (e2.0% p1.6%)

13:00 US Housing/Home Price Indices

13:00 Fed Quarles speech

14:00 US Consumer Confidence(Mar)

18:30 Fed Williams speech

23:50 Japan Industrial Production

Wednesday March 31

The final day of Q1 sees a speech from President Biden. There is a rate decision in Colombia. There is plenty of news, so expect EOQ volatility.

00:30 Aus Building Permits

01:00 China PMIs (Mfr e51.0 p50.6)

06:00 UK Q4 Final GDP (e1.0% prelim1.0%)

07:55 Germany Unemployment Rate/Change

09:00 Eurozone CPI (YoY e0.9% p0.9%)

12:15 US ADP Employment Change (e550k p117k)

12:30 Canada Q4 GDP (MoM)

13:45 Chicago PMI

14:00 US Pending Home Sales

21:30 Aus AiG Performance of Mfg Index

23:50 Tankan Large Manufacturing Index (e0 p-10)

Thursday April 1

The new month and quarter being. There is an OPEC meeting today, and production cuts are expected to be maintained. Look out for any news on the Ever Given, which has effectively closed the Suez Canal. Norway and Denmark are closed for Maundy Thursday.

00:30 Aus Imports/Exports/TB (TB e9.5B p1.01B)

00:30 Aus Retail Sales (e-1.1%, p-1.1%)

01:45 Caixin Mfr PMI

06:00 Germany Retail Sales (e1.3% p-8.7%)

07:55 Germany Markit Mfr PMI

08:00 Eurozone Economic Bulletin

08:30 UK Markit Mfr PMI

12:30 US Jobless Claims

13:30 Canada Markit Mfr PMI

13:45 US Markit Mfr PMI

14:00 US ISM Mfr PMI (e61.2 p60.8)

Friday April 2

Markets are closed in most countries including the US and all of Europe for Good Friday. Markets will be closed for four days (Easter Monday) in many countries. Today is NFP, with the highest jobs estimate since November.

12:30 US NFP/AHE/UnEmp (NFP e655k p379k)

Monday, 22 March 2021

Week to Mar 19th

SPX and DJI new ATH, Sharp moves on Fed dovishness, Oil dips

Another consolidating week, but with SPX and DJI hitting new highs, whilst rotation in an out of NDX continued daily. The key feature of the week was a more dovish than expected Fed, but this only cause a 24 hour blip. The most notable move was Oil which pulled back hard after weeks of rising.

Monday March 15

US DST started today. SPX and DJI made new all-time highs today, as US 10-year yields also touched a new 14-month high, all in line with an expected post-COVID world. However, risk returned in the form of NDX rotation. The tech index was up 1.12% vs 0.65% for SPX. The dollar was up in line with yields. Gold surprisingly rose slightly, and Oil was flat.

Tuesday March 16

A 20-year note auction saw strong demand, with the yield down at 2.29% The 30- and 10-year prices were flat. Equities were stalled today, with DJI and SPX fading, but again NDX outperformed, adding 0.53%, with strong FANG performance. The dollar, gold, and Oil were all flat, awaiting the Fed on Wednesday.

Wednesday March 17

Today’s Fed was more dovish than expected with Chair Powell repeating that “substantial” progress was still needed before any QE taper. DXY fell immediately 0.5% in an hour, and all indices rallied (but with NDX underperformance). Yields similarly spiked up. SPX and yields hit new all time and 14 month highs respectively. Gold spiked up on the weaker dollar, and Oil was flat.

Thursday March 18

As often happens after Fed day, there is a delayed reaction and the driver was the dollar. We know this because stocks and Gold both sold off, as the dollar quickly recovered its Fed spike down across the board (ie all currencies fell). Traders rotated out of NDX back into DJIA heavily, with NDX down 3.13%. FANG was in line with NDX, no more. After a sharp rise in EIA inventory, Oil followed equities sharply down, losing 7.64% from its elevated levels, dropping below $58.50 for the first time since Feb 12. It was the worst day for Oil since the April 20 ‘negative price’ fiasco. There was little volatility after the unsurprising BoE rate decision report.

Friday March 19

Triple witching OpEx day made for lively movement but only within a narrow range, and SPX closed flat. NDX once again notably outperformed DJIA by 1.32%. Oil recovered about half of yesterday’s sharp drop. Despite all this, against a flat dollar, gold rose. Bonds fell in line with the equity move.


Another consolidating week where most instruments ended up somewhere in last week’s range, showing by the fact that the biggest index move (DAX) was a modest 0.82%. The top forex mover was GBPJPY down a moderate 0.43%. Crypto was similarly quiet, hardly moving at all, as were FANGs except for FB which shot up.

Another losing week, but only by 0.06% on USDJPY, my running total for the year is now -2.35% with 6/11 wins. I am changing tack now and this week I will sell GBPUSD

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)

  • Powell Testimony to Congress
  • Heavy CB schedule
  • Markit PMIs
  • Light US data

Monday March 22

Final full week of the month. As well as Chair Powell on digital innovation, we have Fed speeches from Daly, Quarles and Bowman, and ECB Weidmann.

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

12:30 Chicago Fed National Activity Index

13:00 Fed Chair Powell speech

Tuesday March 23

Fed Chair Powell testifies before the House today on the Coronavirus Act. Also we have Fed speakers Brainard (twice) and Williams, BoE Cunliffe and BoC Gravelle.

07:00 UK UnEmp/AHE (UnEmp e5.2% p5.1%)

11:50 BoE Governor Bailey speech

14:00 US New Home Sales

16:00 Fed Chair Powell testifies

22:00 Aus Commonwealth Bank PMIs

23:50 BoJ MPC Minutes

Wednesday March 24

Today’s Powell testimony moves to the Senate. Also Fed Williams speaks at 1735. A raft of European PMIs come in the European morning.

07:00 UK CPI (YoY e0.8% p0.8%)

08:30 Germany Markit Prelim PMIs (Mfr e51.8 p 51.1)

09:00 Eurozone Markit Prelim PMIs (Composite e49.1 p48.8)

09:30 UK Markit Prelim PMIs (Services e51.0 p49.5)

12:30 Durable/ND Capital Goods (NDC e1.0% p3.4%)

13:45 US Markit Prelim PMIs

14:00 Fed's Chair Powell testifies

15:00 Eurozone Consumer Confidence

Thursday March 25

There is a European Council Meeting all day. Fed Clarida and Williams speak, as does BoE Governor Bailey for the second time this week.

07:00 Germany Gfk Consumer Confidence Survey(Apr)

09:00 Eurozone Economic Bulletin

09:30 Fed's Williams speech

09:30 BoE's Governor Bailey speech

12:30 US PCE (QoQ)

12:30 US Jobless Claims

12:30 US Q4 GDP Annualised (e4.1% p4.1%)

23:50 Tokyo CPI

Friday March 26

The European Council Meeting continues for a second day. News is light.

07:00 UK Retail Sales

09:00 Germany IFO – Business Climate/Expectations

12:30 US PCE MoM and YoY

14:00 Michigan CSI