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
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