Week to Oct 15th

Earnings week strong start, CPI beat, Taper looming

MY CALL THIS WEEK : BUY NZDCAD

LAST WEEK

After a lacklustre start, the strong earnings from JPM on Wednesday and the US CPI beat triggered a two-day rally as the other banks also easily beat estimates, with a particularly strong showing from GS. A Fed taper announcement in November still looks likely and the Fed’s Bostic admitted price increases “will not be brief.” The market’s reaction to all this was somewhat contra to the norm, reversing recent strength in the USD and yields, accompanied by large rallies in stocks and metals.

WEEKLY PRICE MOVEMENT

The biggest mover this week was NKY, up 3.64%. The top forex mover was NZDJPY this week, up an amazing 4.13%, a major forex magnitude not seen for years. Bitcoin and ETH were strongly up again, and FANGs were once again variable.

Another bad week, losing 2.69% on my CADJPY short, taking my year to date profit to 3.09%, half of what it was two weeks ago, and 27/40 wins. This week I am buying NZDCAD again.

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)

Earnings season continues next week, with a wider range than the banks last week. As always first FANG to report is NFLX on Tuesday, with NDX giants TSLA and INTC later in the week. Dow giants IBM, JNJ and PG also report. From China, we have GDP, Retail Sales and a rate decision, as well as an Evergrande debt deadline on Tuesday. There are inflation reports from the UK and Canada, but otherwise little of significance in sovereign scheduled data. The first Bitcoin ETF is launched on Monday.

 
CALENDAR (High volatility items in bold)

Monday October 18
02:00 China Q3 GDP (YoY e5.2% p7.9%)
02:00 China Retail Sales (YoY e3.3% p2.5%)
09:30 Fed Quarles speech
15:40 BoC Lane speech
18:00 US Monthly Budget Statement

Tuesday October 19
00:30 RBA Meeting Minutes
12:30 US Building Permits/Housing Starts
17:15 Fed Bowman speech
19:00 Fed Waller speech
23:30 Aus Westpac Leading Index
23:50 Japan Imports/Exports/TB

Wednesday October 20
01:30 PBoC Rate Decision/Statement (e3.85% hold)
06:00 UK CPI (p3.2%)
09:00 Eurozone CPI
10:30 Germany 10Y Bond Auction (time approx.)
12:30 Canada BoC CPI (p3.5%)
17:00 Fed Quarles speech
18:00 Fed Beige Book

Thursday October 21
00:30 Aus NAB Business Confidence
12:30 Philly Fed Mfr Survey
12:30 US Jobless Claims
14:00 Eurozone Consumer Confidence
19:00 RBA Governor Lowe speech
22:00 Aus Commonwealth Bank PMIs
23:30 Japan National CPI

Friday October 22
06:00 UK Retail Sales
07:30 Germany Markit PMIs 
08:00 Eurozone Markit PMIs
08:30 UK Markit Mfr/Svcs PMIs
12:30 Canada Retail Sales (p-0.6%)
13:45 US Markit PMIs