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