Week to Feb 25th

Russia invades Ukraine. Markets recover in hours.

MY CALL THIS WEEK : SELL EURNZD

LAST WEEK

As we mentioned last week, the primary driver of markets this week was the invasion of Ukraine by Russia, the first war on European soil since the Kosovo in 1999. Markets fell hard on Thursday morning and gold, oil and the dollar surged in classic form. However, the moves were quickly reversed, and SPX and NDX both ended the week up, and DJIA was flat. The dollar and yields were up overall, the latter not really reacting to the Ukraine issue. The RBNZ rate hike was priced in, and had no effect on NZD. Gold and oil both tracked the dollar.

WEEKLY PRICE MOVEMENT

The biggest index mover was Ukraine-sensitive DAX, down 3.16%. The top forex mover was GBPAUD up 1.91%. Bitcoin and Ethereum were flat, as was FANG.

Last week's AUDNZD long position made 0.08%, which means I am ahead 2.91% this year, with 4/7 (57%) wins. I think EUR is going to react to Ukraine, and so sell it against NZD. I am avoiding AUD as there is a rate decision statement.

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 a new month, and therefore NFP, which at 400k estimate is similar to last month's print. Ukraine is still expected to dominate the general headlines, although Australian and Canadian rate decisions and Aussie and Canadian inflation will have an effect in the forex area.

CALENDAR  (all times are GMT, volatile items in bold)

Monday February 28
23:50 Japan Ind Production (Sun)
23:50 Japan Retail Sales (Sun)
00:00 Aus TD Securities Inflation
00:30 Aus Retail Sales (p-4.4%)
13:30 Canada Current Account
14:45 Chicago PMI
21:30 Aus AiG Mfg Index

Tuesday March 1
01:00 China PMIs
01:45 China Caixin Mfr PMI
03:30 RBA Rate Decision/Statement (e0.1% hold)
07:00 Germany Retail Sales (p0%)
08:55 Germany Markit Mfr PMI
09:30 UK Markit Mfr PMI
13:00 Germany CPI (e5.3% p5.1%)
13:30 Canada Q4 GDP (p5.4%)
14:30 Canada Markit Mfr PMI
14:45 US Markit Mfr PMI
15:00 ISM Mfr PMI (e58.0 p57.6)
18:30 BoE Saunders speech

Wednesday March 2
00:30 Australia Q4 GDP (e0.5% p-1.9%)
08:55 Germany UnEmp Change/Rate
10:00 Eurozone HICP (CPI) (Core p2.3%)
10:30 DE10Y Bond Auction
13:15 US ADP (e328k p-301k)
15:00 BoC Rate Decision/Statement (e0.25% hold)
19:00 Fed Beige Book
20:00 BoE Cunliffe speech
21:30 Aus AiG Construction Index
22:00 Aus Commonwealth Bank Services PMI

Thursday March 3
00:30 Aus Imports/Exports/TB (TB p8.36B)
01:45 China Caixin Services PMI
08:55 Germany Markit Comp PMI
09:00 Eurozone Markit Comp PMI
10:00 Eurozone UnEmp Rate
12:30 ECB MPC Minutes
13:30 US Jobless Claims
14:45 US Markit Comp/Svcs PMIs
15:00 US Factory Orders
15:00 ISM Svcs PMI (e 61 p59.9)
23:30 Japan Jobs/UnEmp

Friday March 4
07:00 Germany Trade Balance
10:00 Eurozone Retail Sales (p2%)
13:30 US NFP/AHE/UnEmp (NFP e400k p467k)
15:00 Canada Ivey PMI

Week to Feb 18th

Ukraine uncertainty abounds. Gold makes 9-month high

MY CALL THIS WEEK : BUY AUDNZD

LAST WEEK

Markets wobbled this week on Ukraine fears and but only ended up slightly down in inverted V-shaped pattern. USD made a V-shape but ultimately consolidated. The dollar consolidated and ended the week flat. After weeks of rising, 10-year yields pulled back in an inside week. Oil, affected by Ukraine tensions, was slightly more volatile and made a brief new high a few cents shy of $94 before pulling back. The only notable risk-off move was Gold which broke $1,900 for the first time since May 2021. The FOMC minutes did not reveal anything new, and there was no reaction from traders.

WEEKLY PRICE MOVEMENT

The biggest index mover was Ukraine-sensitive DAX, down 2.48%. The top forex mover was EURNZD down 1.07%. Bitcoin and Ethereum fell moderately, and FANG was fairly flat, except for beleaguer FB, down 6.1% and now at May 2020 lows, 46% off its September 2021 high.

Last week's EURGBP long position lost 0.48%, which means I am ahead 2.83% this year, with 3/6 (50%) wins. The trend is difficult to read this week, so I will fall back on my reserve AUDNZD, as a buy. It's won't make much, but it's safe.

 
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 is a foreshortened four day week after Presidents Day on Monday when the markets are closed. There is little significant scheduled news, most important print is US GDP on Thu estimated at 7%, equal to the inflation figure which indicates no growth. With that, the primary focus will be on the tensions in Ukraine.


CALENDAR  (all times are GMT, volatile items in bold)

Monday February 21
22:00 Commonwealth Bank PMIs (Sun)
01:15 PBoC Rate Decision/Statement (e3.7% hold)
07:00 Germany PPI
08:30 Germany Markit PMIs (Mfr e59.4 p59.8)
09:00 Eurozone Markit PMIs (Comp e52.7 p53.8)
09:30 UK Markit Svcs PMI (e55.2 p54.1)

Tuesday February 22
09:00 Germany IFO Sentiment Indicators
10:45 BoE Ramsden speech
14:00 US Housing/Home Price Indices
14:45 US Markit PMIs
15:00 US Consumer Confidence

Wednesday February 23
07:00 Germany Gfk Consumer Confidence
10:00 Eurozone HICP (CPI)

Thursday February 24
13:30 Chicago Fed National Activity Index
13:30 US PCE (QoQ)
13:30 US Q4 GDP (e7.0% p6.9%)
13:30 US Jobless Claims
15:00 US New Home Sales
23:30 Tokyo CPI

Friday February 25
07:00 Germany Q4 GDP
10:00 Eurozone Business Climate
10:00 Eurozone Consumer Confidence
13:30 US PCE (MoM & YoY)
13:30 US Durable/ND Capital Goods (DG e0.6% p-0.7%)
15:00 US Pending Home Sales
15:00 Michigan CSI

Week to Feb 11th

Highest #CPI for 40 years. Yields and Oil at multi-year highs

MY CALL THIS WEEK : BUY EURGBP

LAST WEEK

As is often the case, markets were progressing gently only to be hit by the worse than expected CPI print on Thursday, which at 7.5% was the highest for 40 years. Higher inflation implies earlier rate hikes, and Fed hawk Bullard said “I'd like to see 100 basis points in the bag by July 1." Indices pulled back with SPX closing an inside week, and rate-sensitive NDX down 3%. The effect was largely confined to the US, and DAX and FTSE were up on the week. Although the dollar briefly spiked on the CPI release, it quickly retraced and also had an inside week, although Gold was well up, making a 12-week and 2022 high. Oil reached $94, a six-year high, and yields crossed 2% for the first time since July 2019.


WEEKLY PRICE MOVEMENT

The biggest index mover was again NDX, down 3.0%. The top forex mover was EURAUD down 1.79%. Bitcoin and Ethereum were flat, and FANG suffered again, falling more than NDX in aggregate.

Last week's AUDNZD long position made 0.84%, which means I am ahead 3.31% this year, with 3/5 (60%) wins. This week I am buying EURGBP as I think it has bounced off the 0.83 bottom, but pulled back last week, making a good entry.

 
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’s US data is light, only Retail Sales (which is not rising with inflation). The all-important inflation releases come from China (low), the UK and Canada (high but not as high as US). FOMC minutes probably the main US takeaway. Everything is about inflation. Earnings season enters the ‘retail’ phase when WMT report on Thursday.

CALENDAR  (all times are GMT, volatile items in bold)

Monday February 14
23:50 Japan Q4 Prelim GDP (QoQ e1.4% p-0.9%)

Tuesday February 15
00:30 RBA MPC Minutes
04:30 Japan Ind Production
07:00 UK Claimant Count/AHE/UnEmp (UnEmp e4.1% p4.1%)
10:00 Eurozone Q4 Prelim GDP (YoY e4.6% p4.6%)
10:00 Germany ZEW Sentiment Surveys
13:30 US PPI

Wednesday February 16
01:30 China CPI (e1.0% p1.5%)
07:00 UK CPI (e5.4% p5.4%)
10:00 Eurozone Ind Production
10:30 DE10Y Bond Auction (time approx.)
13:30 US Retail Sales (Control e0.1% p-3.1%)
13:30 Canada BoC CPI (e4.6% p4.0%)
18:30 BoC Lane speech
19:00 FOMC Minutes
23:50 Japan Imports/Exports/TB

Thursday February 17
00:30 Aus NFP/UnEmp (NFP e-15k p64.8k)
09:00 Eurozone Economic Bulletin
13:30 US Building Permits/Housing Starts
13:30 US Jobless Claims
13:30 Philly Fed Mfr Survey
23:30 Japan National CPI

Friday February 18
07:00 UK Retail Sales
13:30 Canada Retail Sales (e1.2% p0.7%)
15:00 Eurozone Consumer Confidence

Week to Feb 4th

Currencies and FANG earnings dominate

MY CALL THIS WEEK : BUY AUDNZD

LAST WEEK

A mixed week, over bullish saw SPX reversing a little of last week’s drop, although the sharp rise in EUR pushed DAX down towards January lows. There were strong FANG moves with GOOGL and AMZN sharply up, but FB over 20% down, all on earnings results.

Currencies and gold were the mirror image of last week as the dollar gave up its FOMC gains. The hawkish ECB triggered a strong rally, taking EURUSD back to the January highs and breaking the January highs on EURGBP after testing the 2020 low on Thursday. Oil made new 2022 highs again, although Gold, up with the falling dollar, only managed an inside week. AUD was particularly strong as the RBA abolished QE. Sterling only rallied a little, the BoE hike having been priced in for weeks. US yields made a new 2-year high, and German Bunds shot through the 0% point, touching 0.232%, a 3-year high.

WEEKLY PRICE MOVEMENT

The biggest index mover was again NKY, but this time up 2.70%. The top forex mover was EURJPY also up 2.70%. Bitcoin and Ethereum were sharply up again, and FANG was very volatile, ranging from AMZN up nearly 10%, to FB falling by double that.

Last week's GBPAUD short position lost 0.16%, the only currency other than EUR to beat GBP. which means I am ahead 2.47% this year, with 2/4 (50%) wins. This week I will buy AUDNZD expecting follow through on the AUD QE ending.

 
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

Although earning season continues, all the major companies results are in, and the only companies of note reporting are DIS and KO. The US CPI on Thursday stands alone as the primary release of the week, as it did in January. We also have German inflation.

CALENDAR  (all times are GMT)

Monday February 7
00:00 Aus TD Securities Inflation
01:45 China Caixin Services PMI

Tuesday February 8
13:30 US Trade Balance
13:30 Canada Trade Balance
23:30 Aus Westpac Consumer Confidence

Wednesday February 9
07:00 Germany Trade Balance

17:00 BoC Governor Macklem speech

Thursday February 10
00:00 Aus Consumer Inflation Expectations
09:00 EC Economic Growth Forecasts
10:30 UK NIESR GDP Estimate (time approx.)
13:30 US CPI (Core YoY e5.9% p5.5%)
13:30 US Jobless Claims
19:00 US Monthly Budget Statement

Friday February 11
07:00 UK Q4 GDP (QoQ e1.1% p1.1%)
07:00 UK Industrial/Mfr Production
07:00 Germany CPI (YoY e5.1% p5.1%)
15:00 Michigan CSI (p67.2)
16:00 US Fed MPC Report