Week to Jan 28th

Hawkish Fed boosts USD, Equities consolidate.

MY CALL THIS WEEK : BUY GBPAUD

THIS WEEK

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.


WEEKLY PRICE MOVEMENT

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.

NEXT WEEK

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