Week to Sep 17th

Equities down, dollar up into OpEx, Oil bucks trend

MY CALL THIS WEEK : BUY EURNZD

LAST WEEK

Equity markets were weak across the board, with notably DJI outperforming NDX by 0.71%, and only recent star NKY posting a green candle to a new eight month high. The fade was exacerbated by OpEx on Friday, with indices closing at lows. After several moribund days, the dollar rose sharply on Thursday’s blowout Retail Sales figure, where the monthly ‘Control Group’ ie core printed +2.5% vs a -0.1% estimate (raw figure was +0.7% vs -0.8%). USDJPY rose 0.27% in 10 minutes, and 0.41% in an hour. DXY closed the week at a four-week high. Gold tracked the dollar to touch five-week lows. 10-year yields (and the 10-2 curve) stayed range bound, although notably the long curve (30-10) touched 0.536%, an 18-month low. It was a good week for oil bulls (and thus XLE +3.20% against -0.57% SPX), but of course, adding fuel to the fire (excuse the pun) of the global transport supply and cost crisis. (Notably DJT -0.67%) fell further than SPX.

WEEKLY PRICE MOVEMENT

The biggest mover this week was FTSE, down 0.93%, making an 8-week low and back under 7,000. The top forex mover was AUDUSD this week, down 1.02%. Bitcoin and ETH were slightly up. FANGs generally followed NDX.

My EURNZD buy made 0.32% taking my year to date profit to 7.20% and 26/36 wins. I will stay with buying EURNZD as this move does not appear to be done 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)

The key event in the penultimate week of September is the FOMC meeting. A rate hold is 100% priced in, but traders will be looking for firm hints, or possibly even a calendar for the taper program, although this is hampered by the poor jobs print this month. There are also three other rate decisions, in China, Japan and UK. Other than that, only PMI data is of any significance.

CALENDAR (High volatility items in bold)

Monday September 20
06:00 Germany PPI

Tuesday September 21
01:30 RBA Meeting Minutes
12:30 US Building Permits/Housing Starts

Wednesday September 22
00:30 Aus Westpac Leading Index
01:30 PBoC Interest Rate Decision (e3.85% hold)
02:00 RBA Bullock speech
03:00 BoJ Rate Decision/Statement (e-0.1% hold)
06:00 BoJ Press Conference
14:00 Eurozone Consumer Confidence
18:00 Fed Rate Decision/Statement (e0.25% hold)
18:30 FOMC Press Conference
23:00 Aus Commonwealth Bank PMIs

Thursday September 23
07:30 Germany Markit PMIs (Mfr e65.0 p62.6)
08:00 Eurozone Markit PMIs (Comp e59.7 p59.0)
08:30 UK Markit Mfr/Svcs PMI (Svcs p55.0)
11:00 BoE Rate Decision/Statement (e0.1% hold)
12:30 US Jobless Claims
12:30 Canada Retail Sales (e4.4% p4.2%)
13:45 US Markit PMIs

Friday September 24
08:00 Germany IFO Sentiment Indicators
14:00 New Home Sales (MoM)(Aug)