Week to Jun 11th

Inflation Blowout, Dollar finally rises, SPX/NDX new highs
MY CALL THIS WEEK : SELL NZDUSD

LAST WEEK

The US inflation print exceeded expectations to post a new 13-year high, and President Biden raised the issue of new tariffs on rare metals.

10-year bonds had their best week for a year. The dollar was also up, with Gold and currencies down, although overall the moves were not large.

DJI was down in line, although strong tech performance led SPX to new highs, and NDX was the strongest index, with the NDX/DJI ratio having its best week since March. The ECB offered nothing new and so EUR hardly moved.

Politics and Brexit came to the fore at the G7, with the US rebuking PM Johnson for not implementing the NI goods protocol.

WEEKLY PRICE MOVEMENT

In this consolidating week, moves were modest, with only NDX moving more than 1%. The biggest forex mover was NZDUSD down 1.19%. BTC held steady whereas ETC fell sharply.  FANGS were generally in line with NDX except AMZN which outperformed.

My USDJPY buy was at least positive but I only made 0.10%, bringing the running total to 16/22 wins but still negative at -0.22%. I am confident the dollar is turning up, so this week I will sell NZDUSD.

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

Next week sees the first Fed meeting since two high inflation prints, and two strong NFPs, and the CME FedWatch tool is actually pricing in a 4% of a 25bp hike. This is extremely unlikely, but what is more likely is some hint of taper later in the year. Also we have inflation from the UK, Germany and Canada, where the trend is also upwards. There is a rate decision in Japan, and Friday is triple-witching day, where quarterly (including index futures), monthly and weekly options all expire.
 

• Fed Rate Decision and Statement
• Japan Rate Decision
• UK, Germany, Canada inflation
• OpEx on Friday

Monday June 14
04:30 Japan Ind Production (YoY)(Apr)
09:00 Eurozone Ind Production s.a. (MoM)(Apr)

Tuesday June 15
01:30 RBA Meeting Minutes
01:30 Aus House Price Index (QoQ)(Q1)
06:00 UK Claimant Count/AHE/UnEmp (UnEmp e4.7% p4.8%)
06:00 Germany CPI (e2.4% p2.4%)
12:30 US Retail Sales (Control Group e0.3% p-1.5%)
12:30 US PPI
23:50 Japan Imports/Exports/TB

Wednesday June 16
00:30 Aus Westpac Leading Index (MoM)(May)
02:00 China Retail Sales (YoY e14% p17.7%)
06:00 UK CPI (YoY e1.8% p1.5%)
09:00 Eurozone Labor Cost(Q1)
10:30 DE10Y Auction (time approx.)
12:30 Canada Building Permits/Housing Starts
12:30 BoC Core CPI (e1.9% p2.3%)
18:00 Fed Rate Decision/Statement (e0.25% hold)
18:30 FOMC Press Conference
 

Thursday June 17
00:00 RBA Governor Lowe speech
01:30 Aus Employment/UnEmp (Emp e30k p-30.6k)
09:00 Eurozone CPI
12:30 Philadelphia Fed Mfr Survey(Jun)
12:30 US Jobless Claims
23:30 Japan National CPI

Friday June 18
03:00 BoJ Rate Decision/Statement (e-0.1% hold)
06:00 BoJ Press Conference
06:00 UK Retail Sales
06:00 Germany PPI