Week to Nov 26th

Omicron scare means worst day of year on Black Friday for equities and Oil

MY CALL THIS WEEK : BUY NZDJPY

LAST WEEK

After a quiet three days in the run-up to Thanksgiving, market, markets showed how extended they were by a strong collapse on Friday, the worst one day drop of 2021 for equities and Oil. Gold once again showed its unreliability as a safe haven. A flat week for copper showed how the NDX drop (more than DJI) may have been more to do with their relative overbought conditions than the COVID news. The dollar had a flat week, although JPY and bonds rallied on the equity drop. 

WEEKLY PRICE MOVEMENT

The biggest index mover was DAX, down 5.59%. The top forex mover was NZDJPY this week, down 3.37%. Bitcoin and Ethereum were down again, and FANGs reflected general NDX movement.

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

As markets were still depressed on Friday, the COVID omicron variant is likely to depress markets as long it stays in the news. However, it is a new month and therefore NFP week. The mid-range estimate of 550k is close to the ADP figure which may change the mood, depending on course on further Omicron information. The week is heavy with Central Bank speeches including Fed Chair Powell's testimony to the Senate COVID committee on Tuesday.

Other than that, we have a raft of PMIs, including the most important ISM pair, German and European inflation, the latter's core still not exceeding 2%, and GDP from commodity pair Australian and Canada.

CALENDAR  (all times are GMT)

Monday November 29

23:50 Japan Retail Sales (Sun)

08:30 BoJ's Governor Kuroda speech

10:00 Eurozone Confidence Indicators

13:00 Germany CPI (e5.4% p4.6%)

13:30 Canada Current Account

15:00 US Pending Home Sales

19:00 BoC Governor Macklem speech

19:00 BoC Schembri speech

20:05 Fed Chair Powell speech

22:05 Fed Bowman speech

22:05 RBA Debelle speech

23:30 Japan Jobs/Unemployment

23:50 Japan Industrial Production

Tuesday November 30

00:30 Aus Building Permits (MoM)(Oct)

01:00 China PMIs (Mfr 49.6 p49.2)

08:55 Germany UnEmp Rate/Change

10:00 Eurozone CPI (Core YoY e1.9% p2.0%)

10:15 ECB Weidmann speech

13:30 Canada Q3 GDP (QoQ e2.5% p-1.1%)

14:00 US Housing/Home Price Indices

14:45 Chicago PMI

15:00 US Consumer Confidence

15:00 Fed Chair Powell testimony

18:00 Fed Clarida speech

21:30 Aus AiG Performance of Mfg Index

Wednesday December 1

00:30 Aus Q3 GDP (QoQ e-2.7% p0.7%)

01:45 China Caixin Mfr PMI

07:00 Germany Retail Sales (YoY e-2% p-0.9%)

08:55 Germany Markit Mfr PMI

09:30 UK Markit Mfr PMI

12:00 BoE Governor Bailey speech (time approx.)

13:15 US ADP (e525k p571k)

14:30 Canada Markit Mfr PMI

14:45 US Markit Mfr PMI

15:00 US ISM Mfr PMI (e61 p60.8)

19:00 Fed Beige Book

Thursday December 2

00:30 Aus Imports/Exports/TB (TB e11Bn,p12.2Bn)

10:00 Eurozone Unemployment Rate

13:30 US Jobless Claims

21:30 Aus AiG Performance of Construction

22:00 Aus Commonwealth Bank Svcs PMI

Friday December 3

01:45 China Caixin Services PMI

08:55 Germany Markit PMI Comp

09:00 Eurozone Markit PMI Comp

10:00 Eurozone Retail Sales (YoY e1.5% p2.5%)

13:30 US NFP/AHE/UnEmp (NFP e550k p531k)

13:30 Canada NFP/UnEmp (UnEmp p6.7%)

14:45 US Markit Svcs/Comp PMIs

15:00 US ISM Svcs PMI (e65.5 p66.7)

Week to Nov 19th

NDX ATH, Sterling rallies, Austria lockdown

MY CALL THIS WEEK : SELL EURAUD

THIS WEEK

This week saw beats (not necessarily good) on US Retail Sales and UK inflation. The latter buoyed sterling, the only currency to beat the dollar. This made FTSE the week's worst performing index. News of rising continental European COVID cases and a full lockdown in Austria made EURGBP the largest forex mover, hitting 2020 lows.

Increased volatility led to extremes in the NDX and the dollar. The tech index hit new all-time highs, and also the NDX/DJI ratio reached its highest level since 2000. At 0.465, the ratio is only 1% below the 0.47 spike on Mar 13, 2000, a level it only held for half a day. (The low was 0.11 on 24 Sep 2002). DXY had its strongest week for five months, and hit a 16 month high, with EUR recording the same periods for lows. Gold had its best week in two months, and made new 5-month high, before fading as the dollar rallied mid-week. Yields and Gold largely followed the dollar.


WEEKLY PRICE MOVEMENT

The biggest mover for a third week was FTSE, down 1.69% on a strong pound. The top forex mover was EURGBP this week, down 1.71%. Bitcoin and Ethereum were down sharply, whereas FANGs performed well, in line with NDX.

Last week’s EURGBP short made 1.71%, taking my year to date profit to 7.90% and 31/45 wins. This week I am selling EURAUD.

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

The week ahead is foreshortened to three and half days in the US, with Thanksgiving and the half-day on Black Friday which opens the holiday season. The minutes of the last FOMC meeting are published and there are interest rate decisions in China and New Zealand. Otherwise it is a fairly quiet week for important data.

CALENDAR  (all times are GMT)

Monday November 22
01:30 PBoC Interest Rate Decision (e3.85% hold)
13:30 Chicago Fed National Activity Index
15:00 Eurozone Consumer Confidence
22:00 Aus Commonwealth Bank PMIs

Tuesday November 23
08:30 Germany Markit PMIs (Mfr e56.7 p57.8)
09:00 Eurozone Markit PMIs (Comp e53.1 p54.2)
09:30 UK Markit Mfr/Svcs PMIs (Svcs 58.5 p59.1)
11:00 BoE Haskel speech
14:45 US Markit PMIs
18:00 BoC Beaudry speech
22:15 RBA Bullock speech

Wednesday November 24
00:40 RBA Bullock speech
01:00 RBNZ Rate Decision/Statement (e0.75% p0.5%)
02:00 RBNZ Press Conference
09:00 Germany IFO Sentiment Indicators
12:45 UK Autumn Budget
13:30 US Durable/ND Capital Goods (NDC Oct e0.6% p0.8%)
13:30 US Jobless Claims
13:30 US Q3 GDP Annualized (e2.1% p2.0%)
15:00 US PCE QoQ
15:00 Michigan CSI
15:00 US New Home Sales (MoM)(Oct)
19:00 FOMC Minutes

Thursday November 25
07:00 Germany GDP
12:30 ECB MPC Accounts
23:30 Tokyo CPI

Friday November 26
00:30 Aus Retail Sales (MoM e2.5% p1.3%)

Week to Nov 12th

Inflation higher than expected, Strong Gold rally 

MY CALL THIS WEEK : SELL EURGBP

 

THIS WEEK

This week’s inevitable slide in equity markets was reversed after Wednesday’s strong inflation overshoot (core 4.6% vs est 4.3%, previously 4%), which created a V-shaped week, and sent Gold to five-month highs which were sustained.. The dollar and yields also rallied, pushing Oil down. All this showed the market thought rate hikes would come sooner, although surprisingly the Fed Futures rate did not move.

WEEKLY PRICE MOVEMENT

The biggest mover for a third week was NDX, down 0.97%. The top forex mover was NZDUSD this week, down 0.96%. Bitcoin and Ethereum were fairly flat, and FANGs were fairly flat except NFLX which reverted to mean.

Last week’s GBPNZD long made 0.42%, taking my year to date profit to 6.19% and 30/44 wins. This week I am selling EURGBP.

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

Next week sees the retail phase of earnings, and as inflation is the hot topic, with retail sales and CPI from the UK and Canada, and more importantly US retail sales. Overall, the proximity to Thanksgiving and Black Friday is more likely to influence markets.

CALENDAR  (all times are GMT)

Monday November 15
23:50 Japan Q3 Prelim GDP (Sunday) (QoQ e-0.2% p0.5%)
04:30 Japan Ind Production
09:30 BoE Haskel speech

Tuesday November 16
00:30 RBA Meeting Minutes
02:30 RBA Governor Lowe speech
07:00 UK Claimant Count/AHE/UnEmp (UnEmp e4.5% unch.)
10:00 Eurozone GDP (e2.2% unch.)
13:30 US Retail Sales (MoM e0.7% unch.)
23:30 Aus Westpac Leading Index

Wednesday November 17
00:30 Aus Wage Price Index
07:00 UK CPI (p3.1%)
08:00 EU Financial Stability Review
13:30 US Building Permits/Housing Starts
13:30 Canada BoC CPI (p3.7%)
14:10 Fed Williams speech
17:40 Fed Waller speech
21:05 Fed Evans speech

Thursday November 18
10:00 Eurozone CPI
13:30 Philly Fed Mfr Survey
13:30 US Jobless Claims
14:30 Fed Williams speech
19:00 Fed Evans speech
23:30 Japan National CPI
23:50 Japan Imports/Exports/TB

Friday November 19
07:00 UK Retail Sales
07:00 Germany PPI
08:00 ECB President Lagarde speech
13:00 ECB Weidmann speech
13:30 Canada Retail Sales (MoM e2.0% p2.1%)
15:45 Fed Waller speech
17:15 Fed Clarida speech

Week to Nov 5th

Taper confirmed, NFP beat, new ATHs
MY CALL THIS WEEK : BUY GBPNZD

 

THIS WEEK

This week saw the Fed finally introduce taper, as widely expected, to start immediately at the rate of $15Bn per month, meaning the taper will complete in June 2022. The Fed warned that the programme may alter if conditions change. The equity market welcomed the certainty, in addition to a strong ISM PMI and further strong earnings, and hit new highs. As predicted by ADP, the first post-taper NFP was a firm beat, and without the "bad is good, tightening delay" factor, markets reacted as you would expect, rising to further highs. In fact markets made a high every single day this week. Markets took some profit into the Friday close.

Yields fell all week, as did most currencies against the dollar, strengthened by the taper announcement. The pullback in Oil from the multi-year highs, did not allow commodity currencies (AUD and CAD). The only unusual move was from Gold which rose despite the risk on and strong dollar.

WEEKLY PRICE MOVEMENT

The biggest mover this week was again NDX, up 3.21%. The top forex mover was AUDJPY this week, up 2.09%. Bitcoin and Ethereum were flat, and FANGs were variable but generally strong (except NFLX). My EURGBP long made 1.5% taking profit year to date to 5.77% and 29/43 wins.

Week to 5 Nov 21

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)

Things are much quieter next week. The US Daylight Savings Time ends putting market hours back in line with Europe. Veterans/Armistice Day on Thursday is not a market holiday anywhere except France. The only notable macro event is US inflation, estimated to remain at 4%. Other than that there is Aussie jobs and UK GDP, and one major warnings report, DIS, on Wednesday.

CALENDAR (all times are GMT)

Monday November 8

05:00 Japan Leading Economic Index

23:50 Japan Current Account

Tuesday November 9

00:00 HIA New Home Sales (time approx.)

07:00 Germany Trade Balance

10:00 Germany ZEW Economic Indicators

13:30 US PPI

17:10 BoC Beaudry speech

22:45 BoC Governor Macklem speech

23:30 Aus Westpac Consumer Confidence

Wednesday November 10

01:30 China CPI

07:00 Germany CPI (YoY e4.6% p4.6%)

10:30 DE10Y Bond Auction (time approx.)

13:30 US CPI (YoY e4.0% p4.0%)

13:30 US Jobless Claims

19:00 US Monthly Budget Statement

Thursday November 11

00:00 Aus Consumer Inflation Expectations

00:30 Aus NFP/UnEmp (NFP e50k p-138k)

07:00 UK Mfr/Ind Production

07:00 UK GDP (YoY p5.5%)

09:00 Eurozone Economic Bulletin

Friday November 12

10:00 Eurozone Industrial Production

15:00 Michigan CSI