Week to Sep 10th

NDX outperforms, NKY rally continues, Currencies flat

MY CALL THIS WEEK : BUY EURNZD

LAST WEEK

In a week of continued heavy rotation, the NDX was the only stock market to make new all-time while the NKY rally continued unabated. Central bank tapering once more dominated the narrative, with the RBA, the BoC and the ECB all taking turns in the spotlight. In a small but potentially significant hawkish shift, the ECB lowered its asset purchases if only to restore them to previous levels. This did little to shift a sluggish Euro and EU yields actually dropped sharply following the meeting. Meanwhile, the USD traded an inside week while US 10-year yields made a new recovery high only to fade again.

WEEKLY PRICE MOVEMENT

The biggest mover this week was again NKY, up 4.30% bucking the trend elsewhere. The top forex mover was AUDUSD this week, up 1.38%. Bitcoin and ETH fell sharply. FANGs were very mixed.

My GBPCAD buy made 1.14%, reversing last week's loss, and taking my year to date profit to 6.88% and 25/35 wins. This week I am buying EURNZD, it seems to be at support. This NKY rally will end and JPY will rally, but not yet.

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 lighter than usual on data, with inflation the main focus, as the US, UK, Canada and Eurozone report. However, as inflation has already reached 'the target' for taper everywhere except Eurozone, the prints assume less significance than in previous months. Friday is quarterly OpEx, the so-called triple witching, which includes the important index options (SPY, QQQ etc.). Markets will probably spend the whole week looking for clues to the Fed 22 September meeting.

CALENDAR (High volatility items in bold)

Monday September 13
18:00 US Monthly Budget

Tuesday September 14
01:30 Aus House Price Index
04:30 Japan Industrial Production
06:00 UK Claimant Count/AHE/UnEmp (UnEmp e4.8% p4.7%)
12:30 US CPI (MoM e0.3% p0.3%)

Wednesday September 15
00:30 Aus Westpac Consumer Confidence
02:00 China Retail Sales (YoY e11.5% p8.5%)
06:00 UK CPI (YoY e2.3% p2.0%)
09:00 Eurozone Labor Cost/Ind Production
12:30 Canada BoC CPI (p3.3%)
23:50 Japan Imports/Exports/TB

Thursday September 16 
01:00 Aus Consumer Inflation Expectations
01:30 Aus NFP/UnEmp (UnEmp e5.0% p4.6%)
12:30 US Retail Sales (Control Group Aug e-0.1% p-1%)
12:30 Philly Fed Manufacturing Survey
12:30 US Jobless Claims

Friday September 17
06:00 UK Retail Sales
09:00 Eurozone CPI
14:00 Michigan CSI