Week to Oct 1st

End of quarter, SPX worst week of the year, Dollar makes 2021 highs

MY CALL THIS WEEK : BUY NZDCAD

LAST WEEK

The raising of the debt ceiling prompted a rise in yields, which together with other negative factors such as the energy crisis, and Chinese slowdown meant SPX had its worst week of 2021, and worst month of the year, whereas the safe-haven dollar had its best week since June, making new 2021 highs, with all pairs except CAD down. The risk-off mood gave the DJI/NDX ratio its best week since May as NDX touched July lows. Oil also touched July highs, and is less than a dollar away from a seven-year high.


WEEKLY PRICE MOVEMENT

The biggest mover this week was NKY, down 4.89%. The top forex mover was NZDCAD this week, down 1.28%. Bitcoin and ETH bucked the general trend and were up over 12%.  FANGs were generally down as much as NDX.

My CADJPY short lost 0.29% taking my year to date profit to 7.23% and 27/38 wins. This week I will try the reversal strategy and 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.

NEXT WEEK (all times are GMT)

In September, Fed Chair Powell noted it'll take one more "decent" jobs report to set the taper wheels in motion - not a "super-strong" one, just one that's "reasonably good". This week’s estimate of 500K, if met or exceeded should do the trick. The market response will show how much taper is already priced in, after September’s 4% drop, the worst month since the pandemic started. We are at a juncture, DJIA has just bounced off the SMA200d as it did last November, but historically October is the second-worst month (after September!) for equities.  Our research suggests NFP week is usually positive, and next week onwards earnings will be the main driver.

On Monday, OPEC meet to review output. The current plan is to increase output by 400kbpd, the latest ‘tapering’ of the cuts. However, given that the price of oil is over $75, a level it has not breached for seven years, and recovery demand being stronger than expected, the committee may well agree a larger increase. Unusually, the market has not priced this in yet.

On Wednesday, COVID fortress New Zealand (only 4,000 cases and 27 deaths), which has already ended QE, is almost certain to double the NZD base rate to 0.5%, being the first of the major six to do so, and third overall (after KRW and NOK).


CALENDAR (High volatility items in bold)

Monday October 4
08:00 OPEC Meeting

14:00 US Factory Orders
21:30 Aus AiG Construction Index
22:00 Aus Commonwealth Bank Svcs PMI
23:30 Tokyo CPI

Tuesday October 5
00:00 Aus TD Securities Inflation
00:30 Aus Imports/Exports/TB (TB e10.6B p12.1B)
03:30 RBA Rate Decision/Statement (e0.1% hold)
07:55 Germany Markit Composite PMI
08:00 Eurozone Markit Composite PMI
12:30 US Trade Balance
12:30 Canada Trade Balance
13:45 US Markit Svcs/Comp PMI
14:00 ISM Services PMI (e59.8 p61.7)
17:15 Fed Quarles speech

Wednesday October 6
01:00 RBNZ Rate Decision/Statement (e0.5% p0.25%)
06:00 Germany Factory Orders
09:00 Eurozone Retail Sales
12:15 US ADP

Thursday October 7
05:00 Japan Leading Economic Index
06:00 Germany Industrial Production
11:30 ECB MPC Accounts
12:30 US Jobless Claims
12:40 Fed Williams speech
14:00 Canada Ivey PMI
16:00 BoC Governor Macklem speech
23:30 Japan Household Spending/Current Account

Friday October 8
01:45 China Caixin Services PMI
06:00 Germany Trade Balance
12:30 US NFP/AHE/UnEmp (NFP e500k p235k)
12:30 Canada NFP/AHE/UnEmp (UnEmp p7.1%)

Week to Mar 27th

No slowdown in Coronavirus, Worst week for USD since 1985, best for Dow since 1938

MY CALL FOR THIS WEEK : BUY EURCAD

In a week where coronavirus cases more than doubled globally, and US Jobless claims were six times higher than any previous high, the Fed passed the largest relief package in US history, and markets had their best week since 1933. Volatility, although reducing, was still rampant, and we started to see huge variations in individual stocks as traders started to evaluate which companies are the relative winners and losers in this unprecedented crisis which has put a quarter of the world’s citizens in lockdown. 

After the last two weeks’ huge moves down, Oil had a very stable inside week on low volume trading, which led to huge rebounds in oil-consumer stocks such as airlines, which had fallen much more than that the 35% SPX crash. A side-effect of the crisis has been a huge run on physical gold, although not the paper contracts, leading to a massive cash-futures divergence ($60 on Tuesday), although this seems to be rectifying itself.

Meanwhile, as the US passed 100,000 cases, the largest number of any country, the effect was seen on the dollar, which has so far been immune. DXY fell nearly 5%, its worst week since 1985.

Next week is still expected to be more of the same, as the focus on the pandemic moves from Europe to the US, which now has the largest number of cases, although the former is earlier in the curve, and traders will also be looking to see if infections are slowing down. Also expect more profit warnings (‘revised’ guidance) from companies ahead of earnings season which starts in two weeks. It is unlikely that there will be any more fiscal stimulus, it really is a matter now of slowing down the disease.

Also of course, we enter a new month which means a very important NFP print. Jobs and unemployment will be bad, it’s just a matter of how bad. Also there are key PMI prints from both the US and China, which will be interesting to contrast.

I will be doing a blog special on whether you can correlate the market moves to the coronavirus case numbers.

Mon Mar 23

After a gap down, markets climbed up but failed to close green, as the coronavirus support bill failed to pass in Congress, outweighing the open-ended QE announced by the Fed. There were wide variations in stocks, with Dow components BA up 11% whereas UTX was down 9%. Currency volatility varied with GBP and CAD down but other currencies up. Gold was up hugely as there was a panic run on the physical metal. Oil and yields were down in line with the market

Tuesday March 24

Today Nancy Pelosi put her support behind the coronavirus support bill, more or less ensuring its passage through the Democrat House. Markets leapt and the Dow had its best day since 1933, adding 11.37%. Other world markets soared in line. CVX added 23%. DAL added 21% on hopes of an airline bailout. The dollar was down across the board (except for JPY which inevitably fell on such amazing risk-on) on the fiscal easing. Oil and yields were down on this Turnaround Tuesday of Tuesdays.

Meantime, this was too late for an unusual physical run on gold, where bullion dealers reported being out of stock. This had the effect of creating a highly unusual but temporary $60 differential between the cash and futures price of the metal, as shown in this chart here. The last time this happened was in 2008, immediately preceding a further drop.

Wednesday March 25

he Senate agreed to pass the support bill today, and stocks continued to advance, although they came off at the end when Bernie Sanders said he would try and block the bill describing it as “$500Bn of corporate welfare”. Indices varied as a 24% rise in BA contrasted to a losses in FANG. The dollar fell again (except against coronavirus-sensitive AUD and NZD), and Gold was down and Oil up in line. Bonds were flat on the day.

Thursday March 26

Another day of contrasts. US new Jobless Claims came in at 3.2 million, the highest figure in history, fifteen times last week’s figure and six times as high as the previous record in 1985. Normally this would be a disaster, but the estimate was 3 million, and more to the point, the Senate passed the support bill. Stocks had another bumper day, with SPX up 6.24% and similar gains around the world. BA rose again, now up 91.7% (nearly double) on last Friday’s close, an unprecedented gain for a mega-cap.

US fell for a fourth straight day, on course for its worst week since 2008. Gold was done in line, although Oil faltered, dropping nearly 5%. Also bonds were slightly up despite the risk-on mood, but in line with the Jobless report.

Friday March 27

The rally collapsed today, with DJIA giving up 4%, but still closing its best week since 1938. Of course after the previous few weeks, sharp rebounds are the norm, but this correction/crash has broken many records. The trigger was probably sentiment as the US overtook Italy to have the most coronavirus cases in the world, as the Michigan CSI was nearly at estimate. As expected a lot of the move came towards the end. The dollar had a further down day as expected. Oil and yields were down in line, the latter a massive 7.45%. Gold was nearly flat, down 0.65%.

WEEKLY PRICE MOVEMENT

The top forex trade was to buy GBPUSD, up 6.91%. The top index trade was DJIA, up an amazing 12.84%. Crypto languished near flat, with DJIA six times as volatile as Bitcoin! FANGs all had a good week with AAPL showing the best performance.

Our trade last week to buy AUDNZD wasn’t great, up 0.34%, when there were so many bigger gains. Our eight-week total is running at 3.9%, and our score is now 50% of trades. My cross call this week is to buy EURCAD. I think continuing dollar weakness will benefit EUR, especially as the virus has ‘moved’ from Europe to the US, whereas CAD is dragged down by both weak oil, and proximity to the US. I’d also sell SPX and Oil, to be honest.

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 (all times are GMT)

(Calendar High volatility items are in bold)

• More coronavirus
• Jobs reports
• DST alignment
• End of quarter

Monday March 30

Daylight Saving Time in Europe starts, and so US and European/UK markets are once again aligned. Coronavirus still dominates, as traders start to grapple with the winners and losers, and look to estimate when the economic shutdown might end.

09:00 EUR Eurozone Business Climate

12:00 EUR Germany CPI (YoY e1.4% p1.7%)

14:00 USD US Pending Home Sales

14:30 USD Dallas Fed Manuf Business Index

23:30 JPY Jobs/Unemployment

23:50 JPY Retail Sales/Industrial Production

Tuesday March 31

Focus turns to Europe today, with the UK final GDP and Germany unemployment. The modest downward estimate may well be revised nearer the time. The last day of the month and quarter and the final tax month in the UK may give rise to additional volatility.

01:00 CNY China PMIs

06:00 GBP UK 19Q4 Final GDP (e0.0% p0.0%)

07:55 EUR Germany Unemployment Rate/Change (UnEmp e5.1% p5.0%)

09:00 EUR Eurozone CPI (Core YoY e1.1% p1.2%)

12:30 CAD Canada GDP

13:00 USD US S&P/Case-Shiller Home Price Indices

13:45 USD Chicago PMI

14:00 USD US Consumer Confidence

Wednesday April 1

The first day of a new month sometimes brings a change in sentiment. Today there will more than usual focus on the ADP jobs figure, being a preview of Friday’s NFP.

01:45 CNY China Caixin Manufacturing PMI (e45.8 p40.3)

06:00 EUR Germany Retail Sales

07:55 EUR Germany Markit Manuf PMI

08:30 GBP UK Markit Manuf PMI

09:00 EUR Eurozone Unemployment Rate (Feb)

12:15 USD US ADP Employment Change (Mar) (e-150k p183k)

13:30 CAD Canada Markit Manuf PMI

13:45 USD Markit Manufacturing PMI (Mar)

14:00 USD US ISM Manuf PMI (e44.3 p50.1)

14:30 WTI EIA Oil Stocks

Thursday April 2

After last week’s record figure, focus will be on the Jobless claims figure. This is new claims each week. The estimate is as bad as last week, and these are additional jobs lost.

12:30 USD US Trade Balance (Feb)

12:30 USD US Initial Jobless Claims (e3000k p3283k)

12:30 CAD Canada International Merchandise Trade (Feb)

14:00 USD US Factory Orders (MoM) (Feb)

Friday April 3

The first NFP of the ‘coronavirus era’ will be very telling, even with such a low estimate. Note the services PMI estimate is still very optimistic, this may change.

00:30 AUD Aus Retail Sales

01:45 CNY China Caixin Services PMI

07:55 EUR Germany Markit Composite PMI

08:00 EUR Eurozone Markit Composite PMI

08:30 GBP UK Markit Services PMI

09:00 EUR Eurozone Retail Sales (YoY) (Feb)

12:30 USD US NFP/AHE/UnEmp (e-123k p273k)

13:45 USD US Markit Services/Composite PMI

14:00 USD US ISM Non-Manufacturing PMI (Mar) (e55.1 p57.3)

This report is published every week as an email by MatrixTrade.com - you can sign up to receive it here. This blog is supported solely by advertising, so if any of the ads interest you, please click on them. If you want notification when the blog is updated, please follow me on Twitter, Facebook, Stocktwits, TradingView or Linkedin (all open in separate windows). Details of how I compile the report are here.

Week to April 26th

Another strong earnings week, SPX, USD and Oil at new highs

Mon Apr 22

The big news over the weekend was the end of US sanctions waivers for Iranian Oil which pushed the black stuff up 2.6% (Brent up 3%) along with FTSE and DAX futures. US equity markets, which were open, ended flat. With London closed there was very little action in forex, and no direction. DXY was flat overall. Yields moved up slightly.

Tuesday April 23

Strong earnings from TWTR and KO gave makers a strong boost today, and took SPX  up 0.9% to a new all-time high, the first since Sep 20. Non-US indices followed, although the effect was more muted in DAX. The dollar also had a good day after the positive housing data, and DXY added 0.32%, Gold was down in line with the dollar move, although unusually, JPY and bonds (inverse to yields) were slightly up.

Wednesday April 24

The SPX ATH having been reached, today’s earnings releases had less effect than expected. BA only matched EPS, missed on Revenue, paused their buybacks, and delayed guidance due to the 737 MAX problems, yet the shares hardly moved. It was a similar story with V, who beat estimates, yet ended the day flat. SPX ended the day 0.2% down.

The picture was quite different elsewhere in the word. NKY fell sharply in the cash session, and recovered only slightly. FTSE also fell throughout the day, however DAX was stronger, up 0.6% on sharp rises in SAP.DE and WDI.DE.

The dollar had another strong day, with DXY up 0.48% across the board to a new two-year high. CAD fell after the dovish BoC statement at 1500. EUR was already down after the German IFO sentiment misses at 0800, and AUD fell on the CPI miss at 0030. Once again, the risk indicators were mixed. Despite a sudden move down in JPY around 1600, Gold steadily climbed, and yields fell again, by 5bp today.

Thursday April 25

Strong post-bell earnings on Wednesday for FB and MSFT pushed the latter to an all-time high, however the flat SPX top continued. MMM fell 13% on poor earnings, meaning DJIA was down 0.4%. World indices were similarly off slightly.

DXY took a breather today, and was up only 0.09% (yet another two-year high), and that was only because of an unusually strong move up (about 80 pips) in JPY after the BoJ statement at 0600. Other currencies were fairly flat, although Gold was up again. Yields advanced 1bp. After two flat days, Oil gave up a dollar.

Friday April 26

Strong AMZN earnings but a miss from INTC meant NDX gapped down and then rallied to close flat. SPX was better, up 0.5% to make another new high after the GDP (1230) and MCSI (1400) beats (NDX made new highs last week). NKY and DAX followed, but FTSE stumbled as GBP turned up after falling all week.

The dollar gave up 0.1% today, across the board, with all currencies advancing (except JPY which was flat). Gold and bonds were up in line. This was due to the PCE miss at the same time as GDP. PCE is the Fed’s preferred inflation indicator. GDP does not really move the dollar, as growth is not part of the Fed mandate. Oil gave up all its recent gains, sliding 3.46% on worries about over-supply. 

WEEKLY PRICE MOVEMENT

NDX was the winner this week, outperforming DJIA by some margin, and AUDJPY was the weakest pair, falling 1.92%. FB beat the other FANGs after earnings. In crypto, BTC hardly moved but ETH had a bad week giving up 11.75%.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on UUP. The equity and index prices are now based on the cash close each day.

NEXT WEEK (all times are GMT)

(Calendar High volatility items are in bold)

• NFP and Fed Rate in same week
• GDP and inflation in Europe
• Chinese Manufacturing PMI
• AAPL and GOOGL report

Monday April 29

MCD and GOOGL report today. Markets in Japan are closed until May 7 as the Heisei era gives way to Reiwa as the new Emperor accedes to the throne. They are also closed in Greece and some Eastern European countries for Orthodox Easter Monday, and also in Egypt and Vietnam.

09:00 EUR Eurozone Business Climate

12:00 MCD Earnings

12:30 USD US PCE/Personal Spending

21:00 GOOGL Earnings

23:01 GBP UK GfK Consumer Confidence

Tuesday April 30

EUR could be affected early today with the first reading of Eurozone GDP followed by the German inflation print. GE report before the bell, along with minor DJIA components PFE and MRK, but there will be more interest in AAPL who report 30 minutes after the close. There may be some month-end volatility. There is a rate decision on HUF (0.9% hold expected). Markets remain closed in Ukraine

01:00 CNY China NBS PMIs

06:00 EUR Germany Gfk Consumer Confidence Survey

07:55 EUR Germany Unemployment Rate/Change

09:00 EUR Eurozone 19Q1 GDP prelim (YoY est 1.1% unch.)

09:00 EUR Eurozone Unemployment Rate

10:30 GE Earnings

12:00 EUR Germany CPI prelim. (e 1.6% p 1.4%)

12:30 CAD Canada GDP (MoM

13:00 USD US S&P/Case-Shiller Home Price Indices

13:45 USD Chicago PMI

14:00 USD US Consumer Confidence/Pending Home Sales

14:00 CAD BoC Governor Poloz speaks

20:30 WTI API Oil Stock

20:30 AAPL Earnings

22:30 AUD Aus AiG Performance of Mfg Index

22:45 NZD NZ Emp Change/UnEmp (e 1.0% p 0.1%)

Wednesday May 01

A new month, and we are straight into the Fed rate decision meeting, with the CME Fedwatch tool showing a 97.5% chance of a hold, and 2.5% for a cut. Note the prediction for a cut in June is as high as 20%. A distinct change from last year. No majors on earnings today, but several NDX components (PEP, QCOM and KHC) report. Markets are closed in China, South Africa, and most of Europe and Latin America for International Labour Day. The US/Canada, UK, and Australia/New Zealand are open. 

08:30 GBP UK Markit Manufacturing PMI

12:15 USD US ADP Employment Change

13:30 CAD Canada Markit Manufacturing PMI

13:45 USD US Markit Manufacturing PMI

14:00 USD US ISM Manufacturing PMI (e 55.0 p 55.3)

14:30 WTI EIA Oil Stock

18:00 USD Fed Rate Decision/Statement (e 2.5% hold)

20:15 CAD BoC Governor Poloz speaks

22:45 NZD NZ Building Permits

Thursday May 02

Attention turns to the UK today with the BoE but no surprises are anticipated. The Chinese Manufacturing PMI is important, as it only recently turned back positive (over 50), and traders will be disappointed if the momentum does not continue. As well as GBP, there is rate decision on CZK (1.75% hold expected)

01:30 AUD Aus HIA New Home Sales (time approx.)

01:45 CNY China Caixin Manufacturing PMI (e 50.9 p 50.8)

06:00 EUR Germany Retail Sales

07:55 EUR Germany Markit Manufacturing PMI

08:30 GBP UK Markit Construction PMI

11:00 GBP BoE Rate Decision/Statement (e 0.75% hold) 

11:30 GBP BoE Governor Carney speaks

12:30 USD US Jobless Claims/Productivity/Labor Costs

14:00 USD US Factory Orders (MoM)

Friday May 03

Another month, another NFP, with the usual estimate level, and of course the most important event of the day. The only significant earnings are BABA before the bell. BABA of course is not part of NDX. Markets are closed in Poland for Constitution Day.

01:30 AUD Aus Building Permits (MoM)

07:30 CHF Swiss CPI

08:30 GBP UK Markit Services PMI

09:00 EUR Eurozone CPI prelim. (e 1.6% p 1.4%)

12:30 USD US NFP/Unemp/AHE (e 180k p 190k)

13:45 USD US Markit Services/Composite PMI

14:00 USD US ISM Non-Manufacturing PMI (e 57.2 p 56.1)

17:00 WTI Baker Hughes Rig Count

This report is published every week as an email by MatrixTrade.com - you can sign up to receive it here. This blog is supported solely by advertising, so if any of the ads interest you, please click on them. If you want notification when the blog is updated, please follow me on Twitter, Facebook, Stocktwits, TradingView or Linkedin (all open in separate windows). Details of how I compile the report are here

Week to Mar 7th

Growth forecast cuts in China, Europe and Canada, Worst US TB since 2008

Mon Mar 04

Despite encouraging remarks from President Trump at the weekend, and another call for a weaker dollar, a rally in China during the Asian session did not prevent optimism from fading in the US markets and SPX close down 0.4%. DAX and NKY followed suit although FTSE advanced as GBP faded some its Brexit hopes gains. Yields fells on stock-bond rotation.

President Trump also called for a weaker dollar again, but this had no effect, with all currencies except JPY declining slightly, in line with the equity softening. Gold fell in line, although Oil managed to move up after Friday’s sharp fall.

Tuesday March 05

Mixed US data left equities directionless today. The situation was better in Europe after UK, German and Eurozone PMI beats at 0855, and DAX and FTSE were both up slightly. The dollar benefited from continuing EUR weakness ahead of the ECB meeting, with DXY advancing 0.24%, and CAD and JPY also fell slightly, and GBP was flat, as was Gold. Oil was choppy but ended slightly up, whereas yields fell for a second day. AUD hardly moved after the rate hold.

Wednesday March 06

Markets faltered again today on the US trade balance miss at 1330, the worst deficit since 2008, together with the ADP miss at the same time, and all indices were down, even FTSE. Yields were down 3.2bp, and JPY was up in line with the risk off mood. DXY was flat (as was Gold), with small recoveries (after two days decline) in EUR and GBP balancing a sharp drop in CAD (only 9.1% of the basket) after gloomy growth forecasts from the BoC at 1500 and mixed Ivey PMIs at the same time. AUD dropped sharply by nearly 1% on the Australian Q4 GDP miss. Oil ended slightly up, with the usual choppiness around the EIA print at 1530. The headline missed, but the Gasoline estimate beat.

Thursday March 07

Another day, another problem. Following the record US trade deficit and the BoC forecast, today the ECB downgraded growth forecasts for the giant Eurozone, and more significantly reversed policy from tightening (the end of bond buying in December) back to easing by a new TLTRO program. The forecast was expected, the TLTROs were not, and EUR fell 1.27% during the next six hours. US, Japanese (futures), and UK equities accelerated their fall. DAX had a short currency related spike up and then joined them.

DXY had its best day since June 2018, and rose 0.75%. As you would expect EURJPY moved even more (down 1.18%). Other currencies moved down, although notably, CAD did not suffer from its usual risk aversion, having softened the day before. Gold was flat. Oil was up slightly again, staying in the 56.50-57.50 range it has held all week. Yield were down again, following the rotation principle rather than the stronger dollar. This is showing that the dollar was not really stronger, it is just EUR that is weaker, as evidenced by the move down in USDJPY.

Friday March 08

The February NFP miss (20k vs 180k) at 1330 gave us three bad days in a row. Small misses sometime push equities up on the theory that they will delay rate hikes, but this was the third-worst print since 2011, following a stellar (311k) January. No tweet from Trump today! Markets all slid down further, although there was a small rally in the last hour. Notably China fell 4% in Asia well before the NFP release.

DXY was down 0.26%, giving back a third of its Thursday gains, with all currencies up, in particular big moves up in JPY and Gold, and down in Oil in line with the equity fade, although the latter recovered somewhat into the close. The Canadian NFP beat had a surprisingly modest effect, with USDCAD only down 0.28%, no more than DXY as a whole. Yields were down 5bp on rotation or dollar tracking.

WEEKLY PRICE MOVEMENT

Despite the stronger yen, NKY was the biggest index decline this week. The strong yen also made shorting GBPJPY (down 2.35%) the best forex trade of the week. Cryptos went to sleep again after a brief burst of activity last week. Another mixed week for FANGs with a surprisingly strong performance from FB.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on UUP. The equity and index prices are now based on the cash close each day.

NEXT WEEK (all times are GMT)

(Calendar High volatility items are in bold)

• Yet another Brexit ‘high noon’
• BoJ Rate Decision
• US Inflation release
• US/Europe DST disconnect

Monday March 11

Today is the first day of the bi-annual one-hour disconnect between the start of daylight saving (summer) time in North America and Europe. The first effect is the Retail Sales print, an hour earlier for European traders, coming after the worst figure since 2001 last month. Our times remain on GMT, as they will when Europe enters DST.

21:45 NZD NZ Electronic Card Retail Sales (Sunday)

00:00 EUR Eurogroup meeting (all day)

07:00 EUR Germany Industrial Production/Trade Balance

12:30 USD US Retail Sales Jan (Control Group est 0.6% prev -1.7%)

13:00 GBP BoE Haskel speech

Tuesday March 12

Today, we have another attempt by embattled UK PM Theresa May to get her Brexit deal through the British Parliament. The vote seems likely to fail again, at which point the saga moves to later votes in the week. US inflation (one leg of the Fed’s dual mandate) will inevitiably affect USD if it is well off estimates. Fed Chair Powell is due to speak at some time today (unconfirmed).

00:00 EUR EcoFin Meeting (all day)

02:15 CNY China FDI

06:30 AUD RBA Debelle speech

09:30 GBP UK Industrial/Manufacturing Production

09:30 GBP UK GDP MoM

12:30 USD US CPI (Core YoY est 2.1% prev 2.2%)

13:45 USD Fed Brainard speech

19:00 GBP UK Parliamentary vote on Brexit (time approx)

20:30 WTI API Oil Stock

Wednesday March 13

Provided the Tuesday vote fails (as expected), a (free) vote by UK MPs is expected to on whether it is acceptable to exit on Mar 29 without a deal. This is designed to be rejected, and almost certainly will be.  In the middle of this, the UK Spring Statement (Budget) is announced, with possible tax changes. A new US report, the unwieldy-titled Nondefense Capital Goods Orders ex Aircraft has been marked by commentators as important, more so that the normal Durable Goods release at the same time.

10:00 EUR Eurozone Industrial Production s.a. (MoM)

12:30 USD US Core PPI

12:30 USD US Durable Goods

12:30 USD US ND Capital Goods (est 0.1% prev -1%)

12:30 GBP UK Budget Report (time approx)

14:30 WTI EIA Oil Stock

Thursday March 14

If the two previous votes are rejected, today’s British Parliament vote is crucial. This will be to extend the exit date (probably to May 23). There may be amendments for a longer delay, or even a second referendum (polls suggest a new people’s vote would cancel Brexit). This is the least certain and therefore potentially the most volatile for GBP. China’s Industrial Production figures are important, given reactions to recent Chinese data. There is a rate decision on UAH (0.5% cut expected)

00:00 AUD Aus Consumer Inflation Expectations

02:00 CNY China Retail Sales/Industrial Production (YoY)

07:00 EUR Germany CPI (est 1.% prev 1.7%)

12:30 USD US Jobless Claims

14:00 USD US New Home Sales (MoM)

21:30 NZD Business NZ PMI

22:50 CAD BoC Wilkins speech

Friday March 15

After growth downgrades elsewhere last week, traders will be listening carefully for any similar views from the BoJ, so for once, this normally unimportant rate decision and statement may cause some JPY volatility. The Michigan Sentiment Index is estimated to fall further. The miss two weeks ago caused a sharp fall in SPX, and another could do the same.

02:00 JPY BoJ Rate Decision/Statement (est -0.1% hold)

10:00 EUR Eurozone CPI

13:15 USD US Industrial Production (MoM)

14:00 USD Michigan Consumer Sentiment Index (est 93.0 prev 93.8)

18:00 WTI Baker Hughes Rig Count

This report is published every week as an email by MatrixTrade.com - you can sign up to receive it here. This blog is supported solely by advertising, so if any of them interest you, please click the links. If you want notification when the blog is updated, please follow me on Twitter, Facebook, Stocktwits or Linkedin (all open in separate windows). Details of how I compile the report are here

Week to Mar 1st

Brexit softening of position helps GBP, Tariff delay confirmed, Trump/Kim summit fails

Mon Feb 25

President Trump announced today that as there had been “substantial progress” in the US/China trade talks, he would be postponing the 15% increase in tariffs on $200Bn of Chinese imports. Although Chinese markets soared over 6%, the results were only modest in the US, Japan and Europe, which registered slight gains. DAX even retreated after the cash close. DXY had a flat day (as did Gold), with modest moves up in EUR, AUD and GBP being balanced by slight softening of CAD and JPY. Yields 

We have highlighted before the effect of President Trump’s tweets on his two favorite market subjects, the value of the dollar and the price of oil. Today he tweeted again that oil was too high, and  called on OPEC to “relax” Brent crude. The prices of both BNO and WTI quick dropped 3.2%.

Tuesday February 26

The big story of the day was UK PM May giving ground on Brexit, saying that if a vote for a deal could not be reached in time for the Mar 29 deadline, she would seek an extension. Sterling added over 1% on the news, which inevitably caused FTSE to fall (71% of the revenue of FTSE companies is from outside the UK). NKY moved down sharply in the cash session but recovered in futures to end the day flat, as did a volatile SPX. DAX continued to move independently and ended up.

The miss on US Housing Starts and Home Prices led to a weaker dollar, with DXY down 0.39%. Although not as strong as GBP, all currencies and Gold were up. Oil recovered 1% after the tweet crash. Yields were down in line with the weaker dollar. The Powell Humphrey-Hawkins testimony (summary: ‘patient’) did not add anything to what we already know.

Wednesday February 27

Another down day in equities as USTR Lighthizer testified to the House that a China trade deal was not yet certain, and would be a “long process”. Although not directly market-related, it didn’t help that Pakistan shot down two Indian military jets in Kashmir. Also the US Trade Balance (1330), Capital Goods, and Factory Orders (both 1500) reports were all down on the previous figure. World markets followed suit, although NKY managed to close flat in futures helped by the weaker yen.

The Brexit softening by PM May was accompanied by softening from both the hardline (want out, don’t care about a deal) ERG group in her party, and also the opposition Labour Party. Sterling continues to rise to its highest level in nearly eight months. Further oil recovery on the strong EIA beat at 1530 helped CAD, which despite a miss on annualised CPI, improved core monthly to 0.3% from -0.2% previously. Other currencies and Gold fell, resulting in a flat dollar basket. Yields were unusually up 4bp today, following USDJPY on part two of the Powell testimony.

Thursday February 28

Another down day after the failure of the Trump/Kim summit, where no progress was achieved. Also the long-awaited US Q4 GDP print at 1330, which beat estimates (YoY 2.6% vs 2.3% est, but was still well down on Q3 (3.4%). US Jobless Claims also missed. The markets are also working off an overbought condition after the strong 10-week bull run. Only DAX managed to post a small gain. The GDP print gave DXY a small boost (up 0.11%) with all currencies (even GBP) and Gold softening. Yields were up again. Oil continued its post Trump tweet recovery.

Friday March 01

Markets recovered again today, buoyed initially by the Chinese Manufacturing PMI beat at 0145, and German (0855) and Eurozone (1000) unemployment beats. The mood continued into the US Open, but was sharply halted by the double whammy of misses on the Michigan Consumer Sentiment (93.8 vs 95.7) and ISM Manufacturing PMI/Prices Paid at 1500. SPX dropped 0.73% in the two hours after the print. However, it then went on to fully recover into the close.

The GDP feelgood factor continued today with DXY up 0.22%, and all currencies and Gold down. However over half of the move was a plummet by CAD after the severe Q4 YoY GDP miss (0.4% vs 1.2%). The loonie is 9.1% of DXY, and fell 1.32% after the print, meaning if it had gone the other way, DXY would have been flat. The CAD move was accentuated by a 2.5% drop in Oil, fuelling by the ISM PMI miss.

WEEKLY PRICE MOVEMENT

A strong recovery from DAX this week, as it beat US indices and was the best performer. For the first time this year, we have a strong divergence in forex, with GBPCAD easily the biggest mover, up 2.26%. Last week’s crypto rally was short-lived, with BTC and ETH down again. A mixed week for FANGs, which were more volatile than the underlying NDX.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on UUP. The equity and index prices are now based on the cash close each day.

• Rate decisions in EUR, CAD and AUD
• Non-farm payrolls in US and Canada
• Australian and Eurozone Q4 GDP
• China’s main political conference

NEXT WEEK (all times are GMT)

(Calendar High volatility items are in bold)

Monday March 04

A quiet start to a busy week, with limited scheduled news, so as usual, the trade war and Brexit will dominate. Brazil and Argentina are closed for two days for Carnival. India is also closed for Mahasivarathri Day.

00:30 AUD Aus Building Permits (MoM)

09:30 GBP UK Markit Construction PM

Tuesday March 05

The 13th National People’s Congress in China is expected to produce economic growth targets going forward, and review intellectual property and technology transfers, key areas in the trade dispute. The key scheduled event is the RBA rate decision. Fed Rosengren (hawk, 2019 voter) speaks at 1230, followed two hours later by Kashkari (dove, 2020 voter). Barkin (hawk, non-voter) is also on. Brazil and Argentina remain closed.

01:45 CNY China Caixin Services PMI

03:30 AUD RBA Rate Decision/Statement

07:00 EUR Germany Retail Sales (MoM)

09:00 EUR Eurozone Markit PMI Composite

09:30 GBP UK Markit Services PMI

10:00 EUR Eurozone Retail Sales (YoY)

14:00 NZD NZ GDT Milk Index

14:45 USD US Markit Services/Composite PMI

15:00 USD US ISM Non-Manufacturing PMI

15:00 USD US New Home Sales (MoM)

19:00 USD US Monthly Budget Statement

21:30 WTI API Oil Stock

23:01 GBP UK BRC Like-For-Like Retail Sales (YoY)

Wednesday March 06

The Canadian rate decision is expected to be a hold, but watch out for Gov Poloz remarks. It’s Australia’s turn to report Q4 GDP, which we have seen has moved markets in other countries. The ADP ‘sneak preview’ jobs estimate is 190k, 10k more than the NFP estimate for Friday. Fed Williams (hawkish, 2019 voter) and Mester (hawk, 2019 voter) both speak at 1700. There are also rate decisions on TRY and PLN. Brazil and Argentina reopen.

00:00 CNY China PPI

00:30 AUD Aus GDP Q4

12:15 GBP BoE Cunliffe speech

13:15 USD US ADP Employment Change

13:30 USD US Trade Balance

15:00 USD US Factory Orders (MoM)

15:00 USD US New Home Sales (MoM)

15:00 CAD BoC Rate Decision/Statement

15:00 CAD Canada Ivey PMI

15:30 WTI EIA Oil Stock

19:00 USD Fed Beige Book

21:30 AUD Aus AiG Performance of Construction Index

Thursday March 07

Another day, another rate decision, this time the key Eurozone figure. A hold is virtually certain, but as always it’s the report and press conference 45 minutes later which will be examined. The third day of Fed speeches as well, this time Brainard (was dovish, now centrist, 2019 and 2020 voter) is on at 1715. BoE Tenreyro speaks at 0930.

00:30 AUD Aus Retail Sales s.a. (MoM)

00:30 AUD Aus Imports/Exports/Trade Balance

05:00 JPY Japan Leading Economic Index

09:30 GBP BoE's Tenreyro speech

10:00 EUR Eurozone GDP Q4

12:30 USD US Jobless Claims

12:45 EUR ECB Rate Decision/Statement

13:30 USD US Trade Balance

13:30 USD US Nonfarm Productivity/Unit Labor Costs

13:30 EUR ECB Draghi Presser

13:30 CAD Canada International Merchandise Trade

23:30 JPY Japan Overall Household Spending (YoY)

Friday March 08

Simultaneous US and Canadian NFPs offer strong volatility for USDCAD today. As usual, the AHE figure may be more important than the jobs print itself. This is the final day before the US/Europe summer time disconnect. For the next three weeks, for Europeans, US markets will appear to open an hour earlier (1330 GMT), and for Americans, Europe will appear to run an hour later, closing at 1230 EDT. ECB Mersch (hawkish) speaks at 1630. Fed Chair Powell may also speak.

02:00 CNY China Imports/Exports/TB

09:30 GBP Industrial Production (MoM)

13:30 USD US NFP/AHE/UE/Participation/Productivity

13:30 CAD Canada NFP/UE/AHE/Participation

18:00 WTI Baker Hughes Rig Count

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