Week to Jul 2nd

New ATHs, Dollar recovers, Oil rallies on OPEC

MY CALL THIS WEEK : SELL NZDJPY

LAST WEEK

In a week of continuation, the SPX and NDX made further all-time highs, long-term yields pushed lower and the US dollar put in another strong week to test the gap created on 6th April. NFP was the event of the week and beat estimates (which were trending higher anyway) with a print of 850k. While a solid number, the unemployment rate actually rose to 5.9% and the Fed can still point to weaknesses in the labour market as reason enough to stay put. Other data was mixed with soft inflation readings in the EU inflation and an uncomfortably hot US ISM PMI. The much-anticipated OPEC+ meeting failed to reach agreement but is likely to settle on an output rise of 400,000 bpd, some way short of the expected 500,000 bpd and accompanied by talk of extending the cuts beyond their April 2022 cut-off point. Oil rallied on the news and broke above $75/bbl for the first time since October 2018.  


WEEKLY PRICE MOVEMENT

The biggest mover this week was NDX, up 2.67%. The top forex mover was AUDUSD down 0.76%. Crypto recovered, particularly ETH, and FANGs outperformed NDX.

My NZDJPY short worked, making 0.38%, taking my year to date profit to 3.38% and 19/25 wins. The pair actually fell much further in the week, and then recovered. The move does not seem done yet. I will short NZDJPY again this week.

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)

The first full week of H2 and Q3. Calendar events this week include the RBA meeting, where there is, unusually a Governor Lowe press conference scheduled, hinting at a possibly policy change (to the hawkish side), possibly arresting AUD’s recent slump. Sticking with CBs, the wording of the FOMC June meeting minutes will be scrutinised by traders. Other than that, there is a steady stream of industrial data prior to JPM and GS opening earnings season in the following week.

Monday July 5
22:30 Aus AiG Performance of Construction (Sunday)
23:00 Aus Commonwealth Bank Svcs PMI (Sunday)
01:30 Aus Building Permits
01:30 Aus Retail Sales (e0.1% p0.1%)
01:45 China Caixin Services PMI
07:55 Germany Markit PMI Comp
08:00 Eurozone Markit PMI Comp
14:30 BoC Business Outlook Survey

Tuesday July 6
01:00 Aus TD Securities Inflation
04:30 RBA Rate Decision/Statement (e0.1% hold)
06:00 RBA Governor Lowe speech
06:00 Germany Factory Orders
09:00 Eurozone Retail Sales (e7.9% p23.9%)
09:00 Germany ZEW Sentiment Indicators
13:45 US Markit Svcs/Comp PMI
14:00 US ISM Services PMI (e63.5 p64.0)

Wednesday July 7
06:00 Germany Industrial Production
09:00 EC Economic Growth Forecasts
14:00 Canada Ivey PMI
15:00 Fed Monetary Policy Report
18:00 FOMC Minutes

Thursday July 8
02:15 RBA Governor Lowe speech
06:00 Germany Trade Balance
12:30 US Jobless Claims

Friday July 9
01:30 China CPI (YoY e1.4% p1.3%)
06:00 UK Mfr/Ind Production
06:00 UK GDP MoM
12:30 Canada NFP/AHE/UnEmp (NFP e-20k p-68k)