Sunday 27 June 2021

Week to Jun 25th

Biden Infrastructure Bill, New ATHs, Dollar falls again


Markets rebounded immediately on Monday after last week’s sell off, and fairly strong PMI data, a dovish tone from Chair Powell in his House testimony, and bipartisan backing for Biden’s infrastructure plan. New all-time highs were made in the strongest week since February. After rising last week, the dollar fell again, although not against the yen. After a bounce on Monday, yields, Gold and Oil were unusually flat for the rest of the week.


The biggest mover again this week was DJIA, down 3.45%, almost exactly the same percentage of last week’s down move. The top forex mover was NZDJPY up 2.51%. Crypto fell sharply again. FANGs were as usual a little more volatile but in line with NDX.
Even though the dollar fell, yen fell more, and thus my USDJPY buy made 0.49%, taking my year to date profit to 3.00% and 18/24 wins. This week I will again take the biggest mover and rely on it reversing, I will short NZDJPY.

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 is a new month, quarter and half-year, and is of course NFP week, reporting for June. The estimate is 600k, close to last month’s actual, and well above the ADP estimate of 450k. The Fed have already indicated a hawkish their long-term strategy, but are waiting for “substantial progress” on the economy. For several months now, the print has had a short-term counterintuitive effect, with markets dropping and yields and dollar rising on a beat, and vice-versa on a miss. OPEC meet on Thursday, where a gentle increase of 500k bpd is expected. Failure to increase would be hawkish, and probably push Oil past $76 to a new seven-year high. Otherwise, German and Eurozone CPI and Retail Sales give pointers to European inflation.

Monday June 28
23:30 Japan Jobs/Unemployment (Sunday)
23:50 Japan Retail Trade (Sunday)

Tuesday June 29
09:00 Eurozone Consumer Confidence/Business Climate
12:00 Germany CPI (p2.4%)
13:00 US Housing/Home Price Indices
14:00 US Consumer Confidence
23:15 RBA Governor Lowe Speech
23:50 Japan Industrial Production

Wednesday June 30
01:00 China PMIs (Mfr p51.0)
06:00 UK Q1 GDP
07:55 Germany Unemployment
09:00 Eurozone CPI
12:15 US ADP Employment Change (e450k p978k)
12:30 Canada MoM GDP
13:45 Chicago PMI
14:00 US Pending Home Sales
22:30 Aus AiG Mfg Index
23:50 Japan Tankan Large Mfr Index (e15 p5)

Thursday July 1
01:30 Aus Imports/Exports/TB
01:45 China Caixin Mfr PMI
07:55 Germany Markit Mfr PMI
08:30 UK Markit Mfr PMI
09:00 Eurozone Unemployment
12:30 US Jobless Claims
13:30 Canada Markit Mfr PMI
13:45 US Markit Mfr PMI
14:00 US ISM Mfr PMI (e61.0 p61.2)

Friday July 2
06:00 Germany Retail Sales (e10.1% p4.4%)
12:30 US NFP/AHE/UnEmp (NFP e600k p559k)
12:30 US Trade Balance
12:30 Canada Trade Balance
14:00 US Factory Orders

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