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