Week to Apr 29th

                                           NDX worst YTD ever, DXY at 5yr highs

MY CALL THIS WEEK : BUY GBPAUD

LAST WEEK

In the last week of April, continued volatility created some ominous monthly candles. NDX was down –13.3%, its largest monthly decline since 2008 and the worst start to the year ever, helped along by poor earnings from the likes of GOOGL and AMZN. A close at the low of the week and month suggests May should start off weak (more on this later) but there will then be a window to reverse from further lows. Indeed, the intra-week pattern next week could follow the same general pattern as last week, and the week before; that is early weakness leads to a mid-week bounce followed by a late sell off into Friday’s close.


WEEKLY PRICE MOVEMENT

The biggest index mover was rate-sensitive NDX for the third week, down 3.76%, nearly 14% in four weeks. The huge weight of AMZN, who missed on earnings, also affected SPX. The top forex mover was EURUSD down 2.67%. Bitcoin and Ethereum fell again, and FANGs severely underperformed, with NFLX now down 73% in six months. Once again AAPL was relatively unscathed.

Last week's EURUSD short position gained 2.67%, which means I am ahead 8.80% this year, with 9/15 (60%) wins. This week I am betting the BoE will be more hawkish than the RBA and buying GBPAUD.

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

The big index names have now reported, so the focus moves back to macro, and the key event of the week is the Fed, now expected to raise rates by 50bp on Wednesday. This is 99% priced in at CME Fedwatch, and so there ought to be a small relief rally (sell the rumor, buy the news) because it is not 75bp. As previously stated, the problem area of the Fed's dual mandate is inflation, not jobs, which are recovering steadily, meaning that NFP is not the primary focus, although there will no doubt be a short-term reaction to the upside on either a big miss or a strong beat.

Elsewhere rate hikes are also expected in Australia and the UK. The two currencies have had rather difference recent history, with AUD strong and GBP weak. Certainty on the rate hike path may normalise things. Other news is less important, with a raft of PMIs from S&P (replacing Markit) only ISM PMIs really stand out, and would have to be well wide of estimates to make a difference.

Japan is closed Monday to Thursday, and the UK is closed on Monday, meaning forex will be low volume.


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

Monday May 2
06:00 Germany Retail Sales (p7%)
07:55 Germany S&P Mfr PMI
09:00 Eurozone Business/Consumer Confidence
13:30 Canada S&P Mfr PMI
13:45 US S&P Mfr PMI
14:00 US ISM Mfr PMI (e58.0 p57.1)
23:30 RBA Ellis speech

Tuesday May 3
01:00 Aus TD Securities CPI
04:30 RBA Rate Decision/Statement (e0.25% p0.10%)
07:55 Germany Unemp
08:30 UK S&P Mfr PMI
09:00 Eurozone Unemp
13:00 ECB President Lagarde speech
14:00 US Factory Orders
16:30 BoC Rogers speech
22:30 Aus AiG Construction Index
23:00 Aus S&P Services PMI

Wednesday May 4
01:30 Aus Retail Sales (e0.5% p1.8%)
06:00 Germany Trade Balance
07:55 Germany Composite PMI
08:00 Eurozone Composite PMI
09:00 Eurozone Retail Sales (e1% p5%)
09:30 DE10Y Bond Auction
12:15 US ADP (e370k p455k)
12:30 US Trade Balance
12:30 Canada Trade Balance
13:45 US S&P Comp/Svcs PMI
14:00 US ISM Services PMI (e59.0 p58.3)
18:00 Fed Rate Decision/Statement (e1.0% p0.5%)
18:30 FOMC Press Conference

Thursday May 5
01:30 Aus Building Permits
01:30 Aus Trade Balance
01:45 China Caixin Svcs PMI
06:00 Germany Factory Orders
08:00 OPEC Meeting
10:30 ECB Lane speech
11:00 BoE Rate Decision/Statement
11:30 BoE Governor Bailey speech
12:30 US Jobless Claims
13:40 BoC Schembri speech
23:30 Tokyo CPI

Friday May 6
01:30 RBA MPC Minutes
12:30 US NFP/AHE/UnEmp (NFP e400k p431k)
12:30 Canada NFP/AHE/UnEmp (UnEmp e5.4% p5.3%)
14:00 Canada Ivey PMI

Week to Apr 22nd

Markets hit by Fed comments. 50bp hike looms.

MY CALL THIS WEEK : SELL EURUSD

LAST WEEK

Stock markets managed a few strong sessions but faded following more hawkish Fed signals indicating the May rate hike would be 50bp not 25bp. DAX and NKY were relatively unscathed, but US markets dropped to new April lows by the end of the week and the weak close presents a similar situation to last week—continuation is likely on Monday and Tuesday.

WEEKLY PRICE MOVEMENT

The biggest index mover was rate-sensitive NDX which was down 3.98%, over 7% in two weeks. Clearly rates are still the issue, as other indices moved much less. The top forex mover was EURNZD up 2.19%. Bitcoin and Ethereum pulled back again, and FANGs severely underperformed, after NFLX reported the first reduction in subscribers for a decade. Only AAPL was relatively unscathed.

Last week's EURAUD long position gained 2.17%, which means I am ahead 6.13% this year, with 8/15 (53%) wins. This week I am selling EURUSD.

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 the big week for earnings, in particular for NDX, with over 42% by weight of the index (including AAPL MSFT GOOGL INTC FB) reporting. These companies are also 22% of SPX. NDX has been severely hit by the rate hike narrative, and entered bear market territory last week. Focus will be in all cases on unit metrics rather than just earnings and revenue. News from the US is again light, with only Durable Goods and GDP of note. Inflation is reported from Australia, Eurozone and Germany, and again estimates show it is still increasing.

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

Monday April 25

08:00 Germany IFO Sentiment

15:00 BoC Governor Macklem speech

15:00 BoC Rogers speech

Tuesday April 26

12:30 US Durable/ND Capital Goods (DG e1.0% p-2.1%)

12:55 BoC Lane speech

13:00 US Housing/Home Price Indices

14:00 US Consumer Confidence

14:00 US New Home Sales

Wednesday April 27

01:30 Australia CPI (RBA Mean e1.2% p1.0%)

14:00 US Pending Home Sales

23:50 Japan Retail Sales

Thursday April 28

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

06:00 BoJ Press Conference

09:00 Eurozone Consumer Confidence

12:00 Germany CPI (e7.6% p7.6%)

12:30 US Q1 GDP (e1.0% p6.9%)

12:30 US Jobless Claims

12:30 US PCE QoQ

Friday April 29

01:45 China Caixin Mfr PMI

06:00 Germany Q1 GDP (QoQ e0.2% p-0.3%)

09:00 Eurozone GDP (YoY e5.1% p4.6%)

09:00 Eurozone CPI (Core e3.1% p2.9%)

12:30 US PCE MoM & YoY

12:30 Canada GDP

13:45 Chicago PMI

14:00 Michigan CSI

Week to Apr 15th

Markets fall despite CPI miss/MSCI beat. EUR down on dovish ECB

MY CALL THIS WEEK : BUY EURAUD

LAST WEEK

In a shortened Easter week, stock markets attempted to strike a bottom on ‘Turnaround Tuesday’ but failed to break out of corrective channels and NDX closed the week right at the low. Meanwhile, 10-year yields and the US dollar broke to yet more 2022 highs with the US10Y reaching 2.82% and DXY breaking above 100. The USD was helped on by a 1c collapse in EUR triggered by the ECB meeting and the snail’s pace the bank has mapped towards normalization.

Earnings season opened with, as always, the major banks and the top DJIA stock UNH reporting. The reactions were briefly as you would expect, with UNH, MS and C all beating on EPS and revenue, and rising 2% briefly. JPM missed on EPS and WFC missed on revenue, both fell sharply. A clear sign of a bearish market is when beats rise less than misses fall. US CPI at 6.5% was lower than the 6.6% estimate, but still higher than last month. The market didn’t like it. Even the surprise strong beat on Michigan CSI on Friday (65.7 vs 59.0 est) could not lift spirits.

With so many markets closing right at weekly (some at yearly) highs or lows, it would be normal to see continuation of Thursday's moves early next week. However, there are some major reversals setting up and we can look for a dollar top in the coming sessions followed slightly later by yields topping out towards the end of the month. Stocks should turn higher by the latest on Tuesday and DAX looks ready to run sooner than most.

WEEKLY PRICE MOVEMENT

The biggest index mover was rate-sensitive NDX which was down 3.03%,. Clearly this was the issue, as other indices moved much less. The top forex mover was GBPJPY up 1.91%. Bitcoin and Ethereum pulled back again, and again FANGs underperformed NDX as a whole..

Last week's EURAUD long position gained 0.12%, which means I am ahead 3.96% this year, with 7/14 (50%) wins. This week I am buying EURAUD again.

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 the absence of any major news, the focus is likely to be on earnings, with reports from so-called bellwether IBM and heavyweight JNJ (together 5.85% of DJIA), and NFLX and TSLA (5.95% of NDX). The scheduled macro news is primarily from outside the US, with China and Canada most prominent. Markets seem to have largely discounted Ukraine, and priced in the rate hike schedule. Note Europe is closed on Monday for the Easter break.

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

Monday April 18

02:00 China GDP (YoY e4.4% p4.0%)

02:00 China Retail Sales (YoY e0.7% p6.7%)

Tuesday April 19

01:30 RBA MPC Minutes

04:30 Japan Ind Production

11:00 JNJ Earnings

12:30 US Building Permits/Housing Starts

20:00 NFLX, IBM Earnings

23:50 Japan Imports/Exports/TB

Wednesday April 20

01:15 PBoC Rate Decision/Statement (e3.7% hold)

06:00 Germany PPI

09:00 Eurozone Ind Production

12:30 Canada BoC CPI (Core YoY e5.0% p4.8%)

21:00 TSLA Earnings

Thursday April 21

09:00 Eurozone CPI

12:30 US Jobless Claims

12:30 Philly Fed Mfr Survey(Apr)

14:00 Eurozone Consumer Confidence

16:30 BoE Governor Bailey speech

22:00 Australia PMIs

23:30 Japan National CPI

Friday April 22

06:00 UK Retail Sales

07:30 Germany PMIs (Mfr e54.4 p56.9)

08:00 Eurozone PMIs (Comp e54.0 p54.9)

08:30 UK PMIs (Svcs e60.3 p62.6)

12:30 Canada Retail Sales (e-0.5% p3.2%)

13:45 US PMIs

14:30 BoE Governor Bailey speech

Week to Apr 8th

Dollar and yields surge on hawkish Fed marks. FTSE outperforms

MY CALL THIS WEEK : BUY EURAUD

LAST WEEK

Most equity markets fell this week on hawkish comments from Fed Brainard and also the FOMC minutes where it was reported that 50bp rate hikes “could be appropriate”. The exception was the oil and bank heavy UK FTSE which came within a whisker of a 44-month high. There was little scheduled data, and as the Ukraine stalemate continues, the war fades from traders’ minds (SPX underperformed DAX), and focus is on rate hikes, and inflation which is driving them (see next week). The same factors drove the dollar to a new 11-month high, and yields to a 3-year high, whilst the yield curve retraced last week's move back into positive territory. JPY, gold and silver had inside weeks. Other metals and oil had reduced volatilty as they consolidate off the highs.


WEEKLY PRICE MOVEMENT

The biggest index mover was rate-sentitive NDX which was down 3.59%. The top forex mover EURUSD down 1.59%. Bitcoin and Ethereum pulled back. FANGs underperformed NDX as a whole..

Last week's EURJPY long position lost 0.10%, which means I am ahead 3.84% this year, with 6/13 (46%) wins. This week I am buying the oversold 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.

NEXT WEEK

Earnings season starts next week, with as always JPM first out of the door on Wednesday, followed by WFC, C and GS the next day. Also Thursday sees the ECB rate decision meeting and press conference. We have inflation from the UK and China as well as the all-important US, which are all forecast to rise, a miss on this print would be positive for stocks short-term. Finally, this is Easter week, and markets are closed for Good Friday (UK and Germany have a four day break with Monday off as well)


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

Monday April 11
01:00 BoJ's Governor Kuroda speech
01:30 China CPI (e1.2% p0.9%)
06:00 UK GDP MoM
06:00 UK Ind/Mfr Production
11:00 UK NIESR GDP Est (time approx.)
13:30 Fed Bowman speech
16:00 Fed Williams speech

Tuesday April 12
06:00 UK Claimant Count/AHE/UnEmp (UE e3.8% p3.9%)
06:00 Germany CPI (e7.6% p7.6%)
08:00 ECB Bank Lending Survey
09:00 Germany ZEW Sentiment
12:30 US CPI (Core e6.6% p6.4%)
16:10 Fed Brainard speech
18:00 US Monthly Budget Statement

Wednesday April 13
00:30 Aus Westpac Consumer Confidence
02:00 China Imports/Exports/TB
06:00 UK CPI (e6.6% p6.2%)
06:15 BoJ Governor Kuroda speech
09:30 DE10Y Bond Auction
12:30 US PPI
14:00 BoC Rate Decision/Statement (e0.5% hold)
15:15 BoC Press Conference

Thursday April 14
01:00 Aus Consumer Inflation Expectations
01:30 Aus Jobs/Unemp (UE p4.0%)
04:30 Japan Ind Production
05:00 China FDI (time approx.)
11:45 ECB Rate Decision/Statement (e0% hold)
12:30 US Jobless Claims
12:30 US Retail Sales
12:30 ECB Pres Lagarde Presser
14:00 Michigan CSI (e60.6 p59.4)

Friday April 15
No significant news, markets closed

Week to Apr 1st

Recovery continues with ruble up and oil down

MY CALL THIS WEEK : BUY EURJPY

LAST WEEK

Following a slight thaw in Ukraine/Russia talks, equity markets made new post-invasion highs this week but could not hold them, falling back into last week’s range, with a V-shaped after the slight NFP miss. NDX outperformed for the third week after months of underperformance. The quarter ended badly, the worst Q1 since 2020.

Oil fell heavily on news that the US is releasing some of its strategic reserve. The ruble appreciated 38% (70% from last weeks low of 0.6c), news that Putin is insisting on ruble payments from “unfriendly countries” for energy. Apparently this does not apply to EUR, the week’s strongest currency. AUD and NZD fell back after strong runs. Bond yields fell back from the highs, as did Oil. Gold is in it’s third week off the highs, and retraced last week’s gain. The yen hit a new six year low, prompting BoJ buying action.

WEEKLY PRICE MOVEMENT

The biggest index mover was NKY which rallied last week, down 1.72%. The top forex mover EURGBP up 0.99%. Bitcoin and Ethereum rallied again. Tech outperformed although FANGs were fairly flat.

Last week's AUDJPY short position lost 0.14%, which means I am ahead 3.94% this year, with 6/12 (50%) wins. This week I am banking on a further move down in JPY, and recovering EUR, and buying EURJPY

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 light on US Data, with the key events Wednesday’s FOMC Minutes, and Tuesday’s ISM Services. CB speakers are heavy next week with four BoE and four Fed speeches. There is also the RBA Rate Decision, and trade balance figures from Germany, the US and Canada. Earnings season doesn’t start until next week with JPM on 13 Apr.


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

Monday April 4
06:00 Germany Trade Balance
08:30 BoE Mann speech
09:05 BoE Governor Bailey speech
14:00 US Factory Orders
14:00 BoE Cunliffe speech
14:30 BoC Business Outlook Survey
22:30 Aus AiG Perf of Construction
23:00 Aus S&P Global Services PMI
23:30 Japan Overall Household Spending

Tuesday April 5
00:30 Aus TD Securities Inflation (time approx.)
04:30 RBA Rate Decision/Statement (e0.1% hold)
07:55 Germany Composite PMI
08:00 Eurozone Composite PMI
12:30 US Trade Balance
12:30 Canada Trade Balance
13:45 US Composite/Svcs PMI
14:00 ISM Services PMI (e57.7 p56.5)
15:05 Fed Brainard speech
18:00 Fed Williams speech

Wednesday April 6
01:45 China Caixin Services PMI
06:00 Germany Factory Orders
14:00 Canada Ivey PMI
18:00 FOMC Minutes

Thursday April 7
01:30 Aus Imports/Exports/TB (TB p1.29B)
09:00 Eurozone Retail Sales (e4.2% p7.8%)
11:30 ECB MPC Minutes
12:15 BoE Pill speech
12:30 US Jobless Claims
13:00 Fed Bullard speech
20:05 Fed Williams speech
23:50 Japan Current Account

Friday April 8
12:30 Canada NFP/AHE/UnEmp (UnEmp e6.0% p5.5%)