Sunday 21 November 2021

Week to Nov 19th

NDX ATH, Sterling rallies, Austria lockdown


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.


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.


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%)

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