Saturday 29 January 2022

Week to Jan 28th

Hawkish Fed boosts USD, Equities consolidate.


The strong volatility continued this week, but ultimately as consolidation as SPX and NDX touched 7-month lows, but ultimately closed the week slightly up, helped by the AAPL beat. The hawkish Fed gave a strong boost to the dollar, up 1.72% to an 18-month high, all currencies and Gold were down in line, although yields were nearly flat, some of the Fed mood being already priced in. Oil hit new seven year highs on the Russia/Ukraine tension, and NatGas was also up.


The biggest index mover was NKY, down 2.92%. The top forex mover was AUDUSD down 2.64%. Bitcoin and Ethereum stabilised, and FANG was variable again, with NFLX falling further.

Last week's NZDUSD short position made 2.56%, which when added to last week’s 0.07%, means I am ahead 2.63%, with 2/3 (66%) wins. This week I will buy GBPAUD expecting a BoE rate hike.

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.


In another packed week into the new month, for once NFP is not the primary driver, as we have earning from the rest of FANG (GOOGL, FB and AMZN). Will they buck the trend, and follow stablemate AAPL with a strong beat. Also next week are three rate decisions, the most important being the ECB. The same day sees a possible 25bp hike from the BoE.

CALENDAR  (all times are GMT)

Monday January 31
23:50 Japan Retail Sales/Ind Production (Sunday)
01:00 China PMIs (Mfr e50.0 p50.3)
10:00 Eurozone Q4 GDP (QoQ e0.3% p2.2%)
13:00 Germany CPI (e5.7%)
14:45 Chicago PMI
21:30 Australia AiG Mfg Index
23:30 Japan Jobs/Unemployment

Tuesday February 1
00:30 Australia Retail Sales (MoM e3.9% p7.3%)
03:30 RBA Rate Decision/Statement (e0.1% p0.1%)
07:00 Germany Retail Sales (e-4.9% p-2.9%)
08:55 Germany Markit Mfr PMI
08:55 Germany UnEmp Change/Rate
09:00 ECB Bank Lending Survey
09:30 UK Markit Mfr PMI
10:00 Eurozone Unemployment Rate(Dec)
13:30 Canada Q4 GDP (MoM(
14:30 Canada Markit Mfr PMI
14:45 US Markit Mfr PMI
15:00 ISM Mfr PMI (e58.3 p58.7)

Wednesday February 2
01:30 RBA Governor Lowe speech
09:00 OPEC Meeting
10:00 Eurozone CPI (YoY p5.0%)
13:15 US ADP Employment Change (e250k p807k)
15:00 BoC Gravelle speech
21:30 AiG Construction Index
22:00 Aus Commonwealth Bank Svcs PMI

Thursday February 3
00:30 Aus Imports/Exports/TB (P9.42B)
00:30 NAB Business Confidence
08:55 Germany Markit Comp PMI
09:00 Eurozone Markit Comp PMI
12:00 BoE Rate Decision/Statement (e0.50% p0.25%)
12:30 BoE Governor Bailey speech
12:45 ECB Rate Decision/Statement (e0% unch)
13:30 ECB Lagarde Presser
13:30 US Jobless Claims
14:45 US Markit Comp & Svcs PMI
15:00 US ISM Services PMI (e61.8 p62.0)

Friday February 4
00:30 RBA MPC Minutes
07:00 Germany Factory Orders
10:00 Eurozone Retail Sales (p7.8%)
13:30 US NFP/AHE/UnEmp (NFP e238k p199k)
13:30 Canada NFP/UnEmp (UnEmp 
15:00 Canada Ivey PMI

Sunday 23 January 2022

Week to Jan 21st

NDX collapse on rate hike fears, Oil makes 6-year high


US indices were battered this week, over continuing concerns about tightening, exacerbated by the GS miss and other lukewarm earnings into OpEx day. The NFLX miss on new subscribers gave the stock its worst week in a decade, down 25%, which in turn pushed NDX down 7.5%, its worst week since the March 20 COVID crash. Heavily weighted AMZN fell 12%, its worst week since December 2018. The decline was considerably less in Europe, with FTSE briefly touching a new 2022 high before joining the trend. The dollar had an inside week, whereas yields briefly touched a two-year high before retreating, and German yields moved above 0% for the first time since early 2019. Gold rallied to a 9-week high in line with the market mood, and Oil briefly made a new 6-year high before pulling back.


The biggest index mover was NDX, down 7.51%. The top forex mover was NZDJPY down 1.81%. Bitcoin and Ethereum also fell heavily, and FANG fell even more than NDX. Red all over the place.

Last week's NZDCAD long position lost 0.26%, which when added to last week’s 0.33%, means I am ahead 0.07%, with 1/2 (50%) wins. This week I'll try selling NZDUSD, expecting a Fed dollar boost.

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 final week of January sees the Fed rate decision, where the bar for hawkishness is high. It is also a key week of earnings season with nearly 30% of NDX reporting (AAPL, MSFT, TSLA, INTC) as well as DJI heavyweights IBM, JNJ and MCD. Also there is a Canadian rate decision, US final A4 GDP ad Australian inflation. A packed week for a depressed market to process.

CALENDAR  (all times are GMT)

Monday January 24
22:00 Aus Commonwealth Bank PMIs (Sunday)
08:30 Germany Markit PMIs (Mfr e57.0 p57.4)
09:00 Eurozone Markit PMIs (Comp e52.6 p53.3)
09:30 UK Markit Mfr & Svcs PMIs
13:30 Chicago Fed National Activity Index
14:45 US Markit PMIs

Tuesday January 25
00:30 Australia CPI (Trimmed Mean QoQ e0.7% p0.7%)
09:00 Germany IFO Sentiment Indicators
14:00 US Housing/Home Price Indices
15:00 US Consumer Confidence
21:00 MSFT ER

Wednesday January 26
10:30 Germany 10Y Bond Auction (time approx.)
15:00 BoC Rate Decision/Statement (e0.25% hold)
16:15 BoC Press Conference
19:00 Fed Rate Decision/Statement (e0.25% hold)
19:30 FOMC Press Conference
21:00 TSLA ER

Thursday January 27
07:00 Germany Gfk Consumer Confidence
13:30 US PCE (QoQ)
13:30 US Durable Goods (e-0.5% p2.6%)
13:30 US Q4 GDP (e5.6% p2.3%)
13:30 US Jobless Claims
15:00 US Pending Home Sales (MoM)(Dec)
21:30 AAPL ER
23:30 Tokyo CPI

Friday January 28
09:00 Germany Q4 GDP (QoQ p1.7%)
10:00 Eurozone Business Climate/Consumer Confidence
13:30 US PCE (MoM and YoY)
15:00 Michigan CSI

Sunday 16 January 2022

Week to Jan 14th

CPI highest since 1982, Oil at 6-year closing high



Markets were weak this week. There was an initial spike down and recovery into the Powell hearings (less hawkish than expected), and then the post-Santa sell-off moved into consolidation, with the 7% inflation print, the highest since 1982 spooking markets into giving back early gains, resulting in a flat week. The dollar fell all week, accelerated by the CPI figure, as did yields, although the latter was after the huge move up last week. Incidentally 10-year yields hit the 200-week moving average for the first time since May 2019. Oil made a 6-year closing high on Friday as last week's rally continued. Gold continued to consolidate, erasing half of last week's gains. Earnings on Friday had little effect, JPM only beat estimates with a one-off credit, and along with C the stock fell on Friday.


The biggest index mover was NKY, down 1.44%. The top forex mover was USDJPY down 1.20%. Bitcoin and Ethereum fall ended, and the pair were slightly up. FANG was variable, although less volatile than in previous weeks.

Last week's NZDCAD long position lost 0.26%, which when added to last week’s 0.33%, means I am ahead 0.07%, with 1/2 (50%) wins. This week I try buying NZDCAD again, as Oil is as a double-top.


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.


Monday is the MLK Day holiday in the US only, and earnings season starts properly on Tuesday with GS reporting before the bell, followed in the week by Dow giants PG and UNH, and first of the FANGs NFLX on Thursday after the bell. The week sees a raft of inflation reports from the UK, Canada, Germany, Eurozone and Japan on Wednesday and Thursday, and a rate decision on the yen. Friday is January's OpEx day.

CALENDAR  (all times are GMT)

Monday January 17

02:00 China GDP (QoQ e1.1% p0.9%)

02:00 China Retail Sales (e3.7% p3.9%)

15:30 BoC Business Outlook Survey

Tuesday January 18

03:00 BoJ Rate Decision/Statement (e-0.1% hold)

04:30 Japan Industrial Production

06:00 BoJ Press Conference

07:00 UK Claimant Count/UnEmp/AHE (UE e4.2% p4.2%)

10:00 Germany ZEW Sentiment Surveys

Wednesday January 19

07:00 UK CPI (p5.1%)

07:00 Germany CPI (e5.7% p5.7%)

13:30 US Building Permits/Housing Starts

13:30 Canada BoC CPI (e3.6% p3.6%)

14:15 BoE Gov Bailey Speech

23:30 Aus Westpac Consumer Confidence

23:50 Japan Imports/Exports/TB

Thursday January 20

00:30 Aus NFP/UnEmp (UE e4.5% p4.6%)

01:30 PBoC Rate Decision/Statement (e3.8% hold)

07:00 Germany PPI

10:00 Eurozone CPI

12:30 ECB MPC Minutes

13:30 US Jobless Claims

13:30 Philly Fed Mfr Survey

23:30 Japan National CPI

23:50 BoJ MPC Minutes

Friday January 21

07:00 UK Retail Sales

13:30 Canada Retail Sales (e1.0% p1.6%)

15:00 Eurozone Consumer Confidence

Sunday 9 January 2022

Week to Jan 7th

Rally collapses on hawkish Fed, OPEC holds Oil up.


A new year, and stocks initially continued upwards this week, but were halted by hawkish remarks in the Fed minutes, which depressed indices generally and tech stocks particularly, already sensitive to omicron COVID, reflected in the US ISM PMI miss. The weak NFP (199k vs 400k) did not help. Naturally yields rallied on the Fed, hitting a 9-month high, although notably the effect was not seen in the dollar, except against commodity currencies AUD and NZD. (CAD was protected by a rally in Oil caused by OPEC sticking to their production schedule). Gold fell in line with yields.


The biggest index mover was NDX, down 4.46%, much more than the other indices, showing the effect of the Fed remarks. The top forex mover was AUDJPY down 1.68%. Bitcoin and Ethereum were well down again, and FANG performed in line with NDX.

My total forex profit for 2021 was 6.49% with 36/52 wins. Last week’s CADJPY short made 0.33%, a win for the first week in 2022. This week I will buy NZDCAD.


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 most important macro print this week is US inflation on Wednesday. The estimate of 5.4% is the highest for 30 years. Earnings season starts this week, but only just, with JPM (as always), C, and WFC reporting on Friday. Fed Chair Powell has his second term confirmation hearing, otherwise we have Chinese inflation (only 1.8%!), and US and Australian Retail Sales.

CALENDAR  (all times are GMT)

Monday January 10

00:00 Aus TD Securities Inflation (time approx.)

00:30 Aus Building Permits

10:00 Eurozone Unemployment Rate(Nov)

Tuesday January 11

00:30 Aus Imports/Exports/TB (TB e10.6B p-11.2B)

00:30 Aus Retail Sales (e4% p4.9%)

15:00 Fed Chair Powell testifies

23:50 Japan Current Account

Wednesday January 12

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

01:30 China CPI (e1.8% p2.3%)

10:00 Eurozone Industrial Production

13:30 US CPI (Core YoY e5.4% p4.9%)

19:00 US Monthly Budget Statement

Thursday January 13

00:00 Aus Consumer Inflation Expectations

02:00 China Imports/Exports/TB

13:30 US Jobless Claims

13:30 US PPI

Friday January 14

07:00 UK GDP (MoM)

07:00 UK Ind/Mfr Production

13:30 US Retail Sales (Control Group Dec p-0.1%)

15:00 Michigan CSI (e70.6 p70.6)

Monday 3 January 2022

Week to Dec 31st

End of year quiet week, Santa rally intact


Very little to report this week. Equity markets rallied after the Christmas break and then faded away. Germany was closed on Friday. A new SPX high was made and NDX came very close. Oil was totally flat, and Gold and yields rose slightly as the dollar was slightly down. I have also done a review of the whole of 2021, posted in the same style as my weekly reports, immediately before this blog entry.


The biggest index mover was NDX, down 1.49%. The top forex mover was long CADJPY up 1.97%. Bitcoin and Ethereum were well down, and FANG underperformed NDX.

Last week’s AUDNZD short made 0.05%, taking my total profit for 2021 to 6.49% and 35/51 wins. About the same as buying and holding the dollar all year. This week I will take the reversal and short CADJPY.

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.


A new year and a new month means NFP, with a more modest estimate than in the past, but still ahead of last month's shocker. All-important inflation reports from Germany, Eurozone and Japan, with estimates lower than last month, but other than that, only PMIs and an OPEC meeting. Earnings start the following week.

CALENDAR  (all times are GMT)

Monday January 3 

08:55 Germany Markit Mfr PMI

14:45 US Markit Mfr PMI

Tuesday January 4

01:45 China Caixin Mfr PMI

07:00 Germany Retail Sales (p-2.9%)

08:55 Germany Unemployment Rate/Change

09:00 OPEC Meeting

09:30 Markit Manufacturing PMI

14:30 UK Markit Mfr PMI

15:00 US ISM Mfr PMI (e60.2 p61.1)

Wednesday January 5

08:55 Germany Markit Composite PMI

09:00 Eurozone Markit Composite PMI

10:30 DE10Y Bond Auction (time approx.)

13:15 US ADP (e438k p534k)

14:45 US Markit Comp & Svcs PMI

19:00 FOMC Minutes

22:00 Aus CW Bank Services PMI

Thursday January 6

01:45 China Caixin Services PMI

07:00 Germany Factory Orders

13:00 Germany CPI (e5.6% p6.0%)

13:30 US Trade Balance

13:30 US Jobless Claim

13:30 International Merchandise Trade(Nov)

15:00 Canada Trade Balance

15:00 ISM Svcs PMI (e67 p69.1)

23:30 Japan Tokyo CPI

Friday January 7

10:00 Eurozone CPI (Core YoY e2.3% p2.6%)

10:00 Eurozone Retail Sales (e5.6% p1.4%)

13:30 US NFP/AHE/UnEmp (NFP e400k, p210k)

13:30 Canada NFP/AHE/UnEmp (p -154k)

15:00 Canada Ivey PMI

Review of 2021

Year of the Vaccine and recovery, First year of Biden, and hints of tightening.

The first full year of the Biden presidency, and of the COVID vaccine program was generally positive, with SPX and NDX both up just over 25%. Notably SPX outperformed NDX for the first time since 2016. There was notable two-way DJI/NDX divergence this year, as the industrial index reacted to COVID, and tech stocks reacted to taper. Foreign indices did better than last year. The dollar recovered last year's losses, as did Oil. Gold was flat on the year, after a 25% rise in 2020. Yields were up 60bp after falling 100bp last year. COVID still dominated everything, and other world events were notably subdued. The most notable factor of the year was the return of inflation, although equally notable. There were no big dips this year in equities.

January 2021
The Capitol riots, and a weak NFP kicked off a weak month, with SPX unable to rise at all. NDX did a little better as it had done throughout the pandemic. The vaccine rollout started in earnest as Joe Biden was inaugurated as the 46th president. The "meme stock" phenomenon started with GME rising from $17 to $482 in a few days, only to pull straight back. Foreign markets were down, as was Gold, whereas Oil rose and yields were up above 1% for the first time since the pandemic.

February 2021

President Biden's commitment to mass vaccination rallied markets, with SPX rallying above and beyond the relatively COVID-immune NDX. Gold fell 6.23% its worst month since November 2016, against a flat dollar. Oil was particularly strong, and yields were up.

March 2021

March saw the worst equity pullback if the year, (although mild by previous years, SPX down 5.21%, DJI 6.62%), after Janet Yellen made hawkish remarks, and the Fed did nothing dovish. The dollar was up 2.59%, its best week since 2016, on tightening fears. Bitcoin surpassed $60,000 for the first time. Gold was down, reacting to the dollar rather than risk, and yields had their best month of the year.

April 2021

A strong earnings season, a blowout 916k NFP, the lowest jobless claims since the pandemic started, and continued rollout of vaccine meant a recovery in equity and oil markets. Bitcoin hit a new ATH of $65k. The dollar pulled back after three months of gains, and Gold recovered, against reacting to the dollar. The turn also affected yields, which turned down for the first time in the year.

May 2021

Sentiment changes this time of year, and with the appearance of the more virulent Indian variant (later called the delta variant), markets were subdued, with SPX flat and NDX slightly down. Another meme stock, AMC, rose 500%, although like GME, never recovered its first high. The dollar was down again, which in addition to the mood gave Gold its best month of the year, and another fall in yields. Oil carried on rising.

June 2021

June saw the G7 meeting agreeing a minimum 15% global corporation tax, which should have depressed the market, but it seems that the only things that matters in 2021 were COVID and QE. NFP was 'Goldilocks', not too high to trigger taper fears, but high enough to shoe recovery. Even the inflation print, a thirteen-year high, and a hawkish Fed did not prevent modest SPX gains, NDX outperformance, and Oil up nearly 10%. The dollar rose in line with the Fed and Gold consequently had its worst month of the year. However yields fell again, running to a different timetable.

July 2021

Another good NFP (850k) and quality earnings kept markets moderately buoyant through July, as traders focus moved away from COVID and towards inflation which the Fed declared to be 'transitory' for now. There were definite pullbacks but these only lasted days and were not deep. Oil rallied as OPEC failed to raise production. Currencies, Gold and oil were flatter than usual, although in the absence of anything hawkish from the Fed, yields fell 24.5bp. 

August 2021

Another great NFP (943k) kept markets (although not Oil) buoyant, with the NDX/DJI making a six-month high. Congress passed the $1Trn infrastructure bill. However gains were trimmed later in the month, when FOMC minutes confirmed taper was on the agenda, and Chair Powell at (virtual) Jackson Hole saying inflation was no longer regarded as transitory. The dollar hit a 9-month high, and yields were back up again. The end of the US 20-year war in Afghanistan had little effect on markets.

September 2021

Concern about taper and the Chinese Evergrande crisis led to a sharp pullback this month (SPX -4.76%) This was expressed very firmly on the massively unexpected Retail Sales print (+2.5% vs -0.1% estimate) which resulted in an instant 0.4% move up in DXY, and 1.73% gain on the month. Notably NKY rallied this month, but admittedly after five months of decline. Gold was down with the dollar move, and Oil down with equities. Yields were sharply up in line with the Retail Sales print's implication of inflation to come. FB, which had been at all-time highs was 10% down after the WSJ published a whistleblower's account of the company's disregard of public safety.

October 2021

With a low NFP print of 194k, October started badly but strong earnings recovered Septembers losses and more, despite continued hawkish views from the Fed. In fact, SPX and NDX had their best months of the year, and Oil was up 10% in line, with no particular reason except the time of year, and perhaps the continuing vaccine program and general recovery. The dollar was flat, as was Gold.  FB dropped 5% after a one-day outage, but this was recovered a week later. Inevitably the dollar rallied, hitting a 16-month high. Gold was flat.

November 2021

The rally was halted with another poor month for SPX (-1.01%) on the outbreak of the much more transmissible but, it turned out later, less serious omicron variants of COVID. The long-expected taper timetable announcement was actually seen as positive, removing uncertainty, and mitigated the drop. NDX managed to stay green despite the 31-year high CPI print of 6.2% (which came after the Fed announcement), and the NDX/DJI ratio reached its highest level since 2000. The dollar was of course up, again with flat Gold, but Oil followed omicron and fell nearly 20%. Notably Bitcoin hit a new ATH at $69k. Yields were down.

December 2021

Despite another low NFP, the year finished nicely with a traditional Santa Rally across US and international markets, all reaching 2021 and in many cases all-time highs as omicron fears faded. The dollar was slightly down, producing a small rise in Gold. Oil rallied over 10% and yields recovered slightly.