Week to Apr 16th

Strong earnings and macro beats, New equity ATHs, bonds/Gold up

MY CALL THIS WEEK : SELL AUDUSD

A strong opening to earnings season, and equally strong macro data meant we saw indices once again rose making new all-time highs, including NDX breaching 14,000 for the first time. 4-week jobless claims were the lowest since the pandemic started. All sectors moved together, the tech outperformance this week was only marginal. Despite rising currencies, DAX and FTSE performed well, the former making another all-time high and the latter crossing 7,000, finally above its Feb 20 high. However, volumes have been declining in this rally since March, and trend, although clear, was only modest, and notably FANG underperformed NDX, which it self made no appreciable gain against SPX. The rally looks fragile.

The dollar declined for a second week, pushing up all currencies and Gold. The inflation print beat, causing a move into bonds, but unlike Retail Sales was not a blowout (CPI Core 1.6% vs 1.5% est) and crucially still below the Fed target, meaning equities were not affected (by a fear of early taper).

In equities, next week is dominated by earnings, with bellwether IBM, FANG giant NFLX, and Dow heavyweights JNJ, PG, AXP and TRV. On the currency front, we have the BoC facing a loonie at three-year USD highs, and  more importantly, the ECB in their eternal quest to stimulate inflation without appearing hawkish. There are, however, no significant US macro prints until Thursday.

Mon Apr 12

SPX was flat today, and DJI and NDX pulled back very slightly, as markets stabilised the large run-up on Friday afternoon. The dollar continued its decline, although not against. Unusually therefore, Gold was slightly down, and Oil was slightly up. Bonds were flat on the day.

Tuesday April 13

Markets keep going up, but the COVID situation seems to determine which sector. Today’s concern that the JNJ vaccine (the stock gapped down 2.93%, MRNA gapped up 5.29%) caused blood clots meant NDX added 1.21% and DJI fell slightly. The dollar fell more sharply today, and bonds and Gold were up both on the underlying COVID risk-off and the dollar. Oil was up slightly.

Wednesday April 14

Today saw earnings blowouts from JPM and GS (both DJIA components) pushing DJIA into positive territory while NDX fell 1.31%. Bonds were down in line, part of a slower trend of yields rising in expectation of inflation. A third down day for the dollar, but Gold fell as well, follow equities for a change. Oil was up, also in line with equities.

Thursday April 15

A second day of positive earnings, and strong beats in Retail Sales and Jobless Claims sent markets even higher, SPX was up 1.11% and NDX 1.61%. The macro prints also arrested the dollar decline which had a flat day, allowing Gold to rise. Oil was up in line, and once again so were bonds, yields reacting to the falling dollar rather than equities.

Friday April 16

A fifth day and no change in trend. FTSE crossed 7,000 and also made a new all-time high, the first since Feb 2020. Other indices made all-time highs as they had been doing all week. The dollar carried on down again, pushing Gold up and Bonds down. Oil slipped slightly. The week had a clear pattern, stocks, gold, bonds and Oil up, dollar down.

WEEKLY PRICE MOVEMENT

The moves were up but slight, with all indices making similar gain, FTSE doing best up 1.50%. The top forex mover was AUDUSD up 1.51%. Another week of flat Bitcoin and ramping Ethereum. FANGs, for once, underperformed NDX as a whole.

My strategy of reversing the most extreme pair worked for a second week, EURGBP fell by 0.23%, taking the total to -0.80%, 10/14 wins. I will try it again for a third week, selling AUDUSD.

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)

• Earnings season continues
• ECB Rate Decision
• BoC Inflation and Rate Decision
• No US macro news until Thursday
• 
  

Monday April 19

Earnings today include Dow staple KO before the bell, and bellwether IBM after the close. As is often the case on Mondays, there is no significant European or US macro data.

23:50 Japan Imports/Exports/TB (Sun)

04:30 Japan Industrial Production

Tuesday April 20

If we add in the previous nights IBM to Dow components JNJ, PG and TRV reporting before the bell, we have a total of 11.33% of DJIA reporting between sessions. Each 1% move in these stocks is 39 points in the index. In addition NFLX report after the bell. In previous earnings, the market sold off if subscriptions were not up to estimates, even if EPS and Revenue beat.

01:30 PBoC Rate Decision/Statement (e3.85% hold)

01:30 RBA Meeting Minutes

06:00 UK Claimant Count/AHE/UnEmp (UE e 5.2% p5.0%)

08:00 ECB Bank Lending Survey

Wednesday April 21

Todays focus is on Canada with inflation and a rate decision. With CAD at three-year highs, any surprises could have a strong effect. There are no significant earnings releases. 

00:30 Aus Westpac Leading Index

01:30 Aus Retail Sales prelim SA (MoM e0.8% p-0.8%)

06:00 UK CPI/RPI/PPI (CPI YoY e0.7% p0.4%)

08:05 BoE Ramsden speech

10:00 DE10Y Bond Auction (time approx.)

10:30 BoE Governor Bailey speech

12:30 BoC CPI (Core YoY p1.2%)

14:00 BoC Rate Decision/Statement

15:15 BoC Press Conference

Thursday April 22

The main news of the day is the ECB rate decision, or more specifically, have eschewed negative rates in the past, any alterations to loosening policy. The first two US significant macro prints of the week are at 1230. NDX giant INTC reports after the bell.

01:30 Aus NAB Business Confidence

11:45 ECB Rate Decision/Statement (e0% hold)

12:30 US Jobless Claims

12:30 Chicago Fed National Activity Index

12:30 ECB Pres Lagarde Presser

14:00 Eurozone Consumer Confidence

23:00 Aus Commonwealth Bank PMIs

23:30 Japan National CPI

Friday April 23

The week closes with a raft of PMIs. DJIA component AXP reports before the bell.

06:00 UK Retail Sales

07:30 Germany Markit PMIs (Mfr e65.9 p66.6)

08:00 Eurozone Markit PMIs (Comp e52.8 p53.2)

08:30 UK Markit PMIs (Services p56.3)

13:45 US Markit PMIs

14:00 US New Home Sales (MoM)(Mar)

Week to Oct 11th

Trade war hopes at end of week, GBP soars on UK/Ireland progress

Mon Oct 07

Trade tensions continued to keep equity markets flat, or slightly down today. DAX suffered from yet another poor German Factory Orders print, although it did beat estimates.

The dollar was slightly up, but it was not even, with a flat EUR, and a slight advance on CAD. Other currencies and Gold were down. Oil and yields were slightly up.

Tuesday October 08

A US move to restrict visas for Chinese officials connected to the Muslim Uighur detentions in Western China, although not a trade move itself, was seen as a bad sign in US-China relations, and markets fell This was despite an announcement from Fed Char Powell that the Fed would recommence some QE operations. SPX was down 1.6% and other markets were similarly red. Risk assets Gold, JPY and bonds rose, and Oil fell in line with equities. DXY also ignored Powell, and was up across the board, with only NZD joining JPY in going green.

Wednesday October 09

Today’s trade war news was China’s offer to increase purchases of US agricultural goods and equity markets (and Oil) rose during the day, only to collapse over 1% suddenly after hours on a report that the US has added 28 Chinese entities to a trade blacklist. The FOMC minutes gave us nothing new, but mixed trade messages produce choppy markets, also seen in a flat DXY. All currencies (and Gold) were down except EUR, but the single currency is nearly 60% of the basket. Yields did not whipsaw, and rose gently all day.

Thursday October 10

The scheduled resumption of China trade talks, and a tweet from Trump saying he would meet Chinese VP Liu He on Friday was seen as positive, and equity markets (and Oil) were up again, and Gold, Bonds and JPY were down. Otherwise DXY was firmly down, especially after sterling rose nearly 2%, its best day for seven months, as progress appeared to be happening on the Irish border question, which is the sticking point for a Brexit deal. FTSE was therefore the only red index. US CPI printed in line with estimates and had little market effect. 

Friday October 11

All positive today on both sides of the Atlantic today. The US agreed to defer some tariffs which start next week, and described it as a ‘limited deal’. Optimism was high, and SPX ended 1.1% up after being 1.9% higher earlier in the day (ie some traders took profits).

After the British and Irish Prime Ministers said there is a “pathway to a possible deal”, the UK was even better. GBP added another 1.75% and FTSE was up 1.84%. FTSE expressed in USD (ie FTSE x GBPUSD) rose 4.76% in two days, the best two-day performance since the recovery immediately after the Brexit referendum. DOil was up in line. XY was down 0.38%, following the GBP ramp (which EUR the other player in Brexit joined). Only Gold, JPY and bonds (inverse to yields) were red against the dollar, as you would expect. CAD was particularly strong on a blowout (53.7k vs 10.0k) jobs report.

WEEKLY PRICE MOVEMENT

DAX outperformed this week adding 500 points, double the gains on other indices. We rarely see 2% weekly moves, never mind 3.24%, which was GBPJPY’s gain. Cryptos were fairly flat, and FANGs were variable, with AAPL outperforming.

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)

• Earnings season opens
• Trade war still in focus
• Last chance for Brexit deal
• China, UK, EU, Canada and NZ inflation

Monday October 14

US Bond markets are closed for Columbus Day (although the ZN future continues to trade). At some point this week, the US Treasury may release their ‘currency manipulation’ report. Canada is closed for Canadian Thanksgiving. There were local elections in New Zealand this weekend.

07:00 CNY Imports/Exports/Trade Balance

09:00 EUR Eurozone Industrial Production

12:10 GBP BoE Cunliffe speech

Tuesday October 15

Earnings season kicks off properly today, with a raft of reports from major players between 1040 and 1315, before the opening bell. The expected order is JNJ first, then UNH, JPM, GS, WFC and C. JNJ, UNH, JPM and GS together make up 17% of DJIA. As well as Bullard, we have Fed Bostic, George and Daly speaking today. Some US tariffs on China increase today.

00:30 AUD RBA Meeting Minutes

01:30 CNY China CPI (YoY e2.9% p2.8%)

08:30 GBP UK AHE/Unemployment (UE e3.9% p3.8%)

09:00 EUR Germany ZEW Economic Sentiment (e-33.4 p-22.5)

09:25 USD Fed Bullard speech

12:10 GBP BoE Vlieghe speech

14:30 NZD NZ GDT Milk Index

21:45 NZD NZ CPI (YoY e1.7% p1.7%)

Wednesday October 16

BAC report at 1045, before the bell today. After the bell we have NFLX and IBM. Fed Evans and Brainard speak today. There is a rate decision on KRW (25bp cut expected).

08:30 GBP UK CPI (e1.6% p1.7%)

09:00 EUR Eurozone CPI

12:30 USD US Retail Sales (Control Group MoM e0.4% p0.3%)

12:30 CAD Canada CPI (BoC Core YoY e1.9% p1.9%)

22:10 AUD RBA Debelle speech

Thursday October 17

Today and tomorrow sees the long-awaited EU Summit which is the UK’s last chance to do a Brexit deal, or ask for another extension, which PM Johnson does not want to do. If a deal is made, he then needs to secure a parliamentary majority to confirm it, and the UK parliament has a special session this coming Saturday to confirm or reject it. Earnings today from large but low-volatility players such as HON and PM before the bell. Fed Evans (again), Bowman and Williams speak today.

00:30 AUD Australia Jobs/Unemployment (Jobs e10.0k p34.7k)

08:30 GBP UK Retail Sales

12:30 USD US Jobless Claims

12:30 USD Philly Fed Manufacturing Survey

13:15 USD US Industrial Production

23:30 JPY Japan National CPI

Friday October 18

Today is monthly options expiration date, so expect additional volatility. DJIA components KO and AXP report before the bell, AMD report after the close. Some US tariffs on EU goods kick in today. Fed George (again), Kaplan, and vice-chair Clarida speak today.

02:00 CNY China Retail Sales

02:00 CNY NBS Press Conference

02:00 CNY China GDP

15:00 USD Fed Kaplan speech

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 Oct 4th

Disastrous US PMIs, FTSE largest drop since 2015, AUD falls on rate cut

From this week onwards, I have expanded the popular 12 chart table to 16, to cover DXY, NDX, NZDUSD and the Fed Funds Rate futures contract which is used to predict rate hike/cut likelihood. The scale is inverted, ie when the chart falls, rate cut expectations are increased.

Mon Sep 30

The reports of Chinese stock delisting were denied by the White House (BABA gapped up 2.35%), and indices were up on the last day of the quarter, although mutedly after the Chinese Manufacturing PMI (0145), German inflation (1200) and Chicago PMI (1345) all missed. The dollar was up again all currencies (and Gold), although only very slightly on CAD. Nevertheless Oil and yields were both slightly down. So not really a risk-on day.

Tuesday October 01

Today was the new month, and indices were rising gently until hit hard by the ISM Manufacturing PMI, which came in at 47.8 (contraction) instead of 50.1 (expansion) as estimated. The risk-off effect was strong, SPX fell 1.7% by the end of the day and other indices followed suit. The dollar reaction was instantaneous, DXY fell 0.26% in a minute, and not just with JPY although obviously this fell more (0.45%). All currencies except Brexit-troubled GBP were up, as was Gold. Oil and yields were down in line.

Wednesday October 02

Markets continued to tumble today after the ADP jobs miss at 1230, with SPX posting its second one day 1% drop for the first time this year. Elsewhere was just as bad, and no-deal rhetoric from UK PM Johnson at his party conference added to FTSE problems. The British index fell 3.2%, the worst one-day performance since January 2016. Currencies and commodities were also similar to Tuesday, with USD and Oil down, bond and Gold up. Once again GBP was flat.

Thursday October 03

The companion ISM PMI from the non-Manufacturing (ie services, transport etc.) sector at 1400 also missed today, with the worst print for three years. The market dived again, but today, a sharp move in Fed Funds rate futures showed a sharply increased likelihood (the bad is good factor), and indices recovered, with SPX up 0.8%, and worldwide equities also in the green. USD fell again on the news, and only partly recovered. Again all currencies, Gold and yields were up, and Oil was down, so the trend was still risk off.

Friday October 04

Today’s NFP came in at 136k, a little below the 140k estimate, but in line with Wednesday’s ADP print. The equity market was relieved that it wasn’t worse, and behaved like a beat, with SPX adding 1.4% and worldwide indices also rising. DXY had the flattest day of the week, with reversing JPY and Gold balancing slight gains in other currencies. Oil was up in line with equities, but yields continued to fall, although only slightly, a risk-on day of sorts.

WEEKLY PRICE MOVEMENT

Only NDX managed a positive week. The worst index was FTSE, down 3.65%. The biggest forex move was CADJPY, down 1.47%. After a few few of volatility, cryptos were very quiet. FANG stocks did particularly well in a bad week, with AAPL the clear winner.

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)

• US and German inflation
• FOMC and ECB minutes
• Trade talks restart
• Large CB speaker roster

Monday October 07

With a quiet week for news, attention will no doubt turn to politics, both in the US and UK. Fed Kashkari (2020 voter, dove) speaks today. The Powell speech is only, of all things, opening remarks at the screening of a movie about the life of Marriner Eccles, 7th Fed Chair in Utah. Markets are still closed in China. There is a rate decision on ILS.

05:00 JPY Japan Leading Economic Index

06:00 EUR Germany Factory Orders

17:00 USD Fed Chair Powell speech

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

Tuesday October 08

The Powell speech today in Denver, CO is about the ‘new’ and ‘old’ economies. Fed Evans (voter, dovish) and Kashkari (again) speak today. BoE Governor Carney is at climate-related summit in Tokyo. Markets reopen in China.

01:45 CNY China Caixin Services PMI

04:10 GBP BoE Governor Carney speech

06:00 EUR Germany Industrial Production

12:30 USD US Core PPI

18:30 USD Fed Chair Powell speech

Wednesday October 09

Chair Powell’s tour continues today in Missouri, opening remarks again at a ‘community listening session’. More important is the release of FOMC September minutes relating to the last rate cut, and the reasoning behind it. The JOLTS job opening print is due today.

15:00 USD Fed Chair Powell speech

17:00 USD US 10-Year Note Auction

18:00 USD FOMC Minutes

Thursday October 10

US-China trade negotiations are scheduled to restart today in Washington. Although this is by no means final, any positive noises would probably lift markets. Fed Mester (2020 voter, hawkish) and Bostic (non-voter, centrist) speak today. A rate cut is expected on PEN.

06:00 EUR Germany Trade Balance

08:30 GBP UK Industrial/Manufacturing Production

08:30 GBP UK GDP (MoM Aug )

11:30 EUR ECB MPC Minutes

12:30 USD US Jobless Claims

12:30 USD US CPI (Core YoY e2.4% p2.4%) 

17:30 EUR ECB Lane (voter, dove) speech

21:30 NZD Business NZ PMI

Friday October 11

The week ends with a slightly livelier day. The Canadian jobs estimate of 40.2k is equivalent to 355k in US terms, (last month’s was equivalent to 716k!), as the US has 8.83 times the population. Fed Rosengren (voter, hawk), Kaplan (2020 voter, centrist) and Kashkari (again) speak today.

06:00 EUR Germany CPI (YoY e0.9% p0.9%)

10:30 EUR ECB De Guindos (voter, dove) speech

12:30 CAD Canada NFP/AHE/UnEmp (NFP e 40.2k p81.1k)

14:00 USD Michigan CSI (e92.0 p93.2)

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

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 Feb 22nd

Four day week in US markets, Oil climbs for a second week, FTSE100 underperforms

Mon Feb 18

US markets were closed today for President’s Day (George Washington’s birthday), and SPX and bond futures were flat, as was Oil. However Asian markets were strong. The sentiment did not transfer to DAX, which was down. FTSE fared better after news of a firm post-Brexit Australian trade agreement, although it sold off at the very end of the day to end flat. Without US news, the dollar was directionless. DXY was down a mere 0.15%, with AUD and JPY up, but other currencies were up slightly.

Tuesday February 19

Despite an EPS beat WMT, US markets were only slightly up (DJIA was flat), with little reaction to the confirmation from President Xi that trade talks would continue in the US, after the sixth(!) round finished in Beijing. Other markets were down in their cash sessions but recovered in late futures trading to end roughly flat. DXY was down 0.29%, with notable moves up from all currencies and Gold, the exception being JPY which fell 0.3% on a dovish statement from BoJ Governor Kuroda, before ending the day flat. Oil was also flat on the day, 10-year yields were down 3bp in line with USD.

Wednesday February 20

Equities moved up today after the Fed minutes offered little in the way of surprises, given the various speeches since the last release. There was little other news to move markets. DXY fell slightly at the time of the release but ended the day flat. Currencies showed slight and indecisive moves, with GBP and JPY slightly up and CAD a little down. Oil rose sharply at the US Open to finish the day over 1% up (despite the one day late API report which missed). Yields were flat.

Thursday February 21 

The mood changed today as the Mar 1 tariff hike deadline approaches. After a rally in futures before the open, SPX fell fast, and ended the day 0.4% down. Other markets followed suit, with FTSE falling particularly hard, down 0.85%, following profit warnings from CNA.L and BA.L The German Manufacturing PMI miss (47.6 vs 49.7) had relatively little effect on DAX or EUR, in fact it was yet another flat day for DXY (up 0.10%) with EUR and GBP hardly moved, although JPY and Gold were up, and AUD and CAD were down in line with the risk-off mood, the former losing 1% after a dovish report from Westpac and news of Chinese restrictions on Australian coal. Oil gave up a little of yesterday’s gains. Yields were surprisingly up 4bp.

Friday February 22

Today President Trump said it was “more likely than not” that a China trade deal would happen, and this was enough to reverse Thursday’s decline. All equity markets were up, although non-US markets came off a little after their cash sessions closed. USD was down today, but again it was slight with DXY only down -0.13% due to another flat day on EURUSD. Other currencies, Gold, Oil and bond prices (inverse to yields) were up in line. 

WEEKLY PRICE MOVEMENT

NKY was the strongest index this week, adding 2.51%. In a reversal of last week where GBPNZD was the weakest pair, this week it was the strongest. It was a strong week for cryptos after months in the doldrums. Given the 0.50% gain in NDX, it was no surprised that FANGS were directionless.

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)

• Powell Humphrey-Hawkins Testimony
• Trade war deadline approaches
• Another key Brexit debate and vote
• Delayed US Q4 GDP released
• 
  

Monday February 25

As earnings season winds down, we have TCEHY (one of the Chinese ‘BAT’ tech stocks) and Dow component HD reporting before the bell. Fed Kaplan (dovish, 2020 voter) and Vice-Chair Clarida (centrist, 2019 and 2020 voter) are on a panel at 1500. There is little in the way of economic news, so as ever, macro focus will be on the China trade talks and Friday’s deadline.

21:45 NZD NZ Retail Sales (Sunday)

05:00 JPY Japan Leading Economic Index

13:30 USD Chicago Fed National Activity Index 

Tuesday February 26

After BoE Governor Carney testifies at the UK parliament inflation report hearings, and embattled UK PM May gives her latest speech on Brexit progress with the EU (not much, we expect), we have Fed Chair Powell giving his semi-annual Humphrey-Hawkins testimony to the House today.

07:00 EUR Germany Gfk Consumer Confidence Survey

10:00 GBP UK Inflation Report Hearings (time approx.)

12:30 GBP UK PM May speech (time approx.)

13:30 USD US Building Permits/Housing Starts

14:00 USD US S&P/Case-Shiller Home Price Indices

14:00 USD Fed Powell Humphrey-Hawkins Day 1 Testimony

15:00 USD US Consumer Confidence

21:30 WTI API Stock Report

21:45 NZD NZ Imports/Exports/TB

Wednesday February 27

Today President Trump starts a two-day meeting with DPRK leader Kim Jong-Un in Hanoi. The Senate have their turn with Jay Powell, with an unscripted Q&A. There will be yet another vote on Brexit, based on any changes reported by PM May the day before. The EIA stock report returns after several weeks.

10:40 EUR DE10Y Bond Auction

13:30 USD US Durable Goods

13:30 CAD Canada CPI

14:00 USD Fed Powell Humphrey-Hawkins Day 2 Testimony

15:00 USD US Pending Home Sales (MoM)

15:00 USD US Factory Orders (MoM)

15:30 WTI EIA Stock Report

18:00 GBP UK Parliamentary vote on Brexit

23:50 JPY Japan Industrial Production (YoY)

23:50 JPY Japan Retail Trade

Thursday February 28

The main release of the day, if not the week is the delayed preliminary 18Q4 US GDP report. Three Fed speakers today, Bostic (dovish, non-voter) at 1350, Harker (dove, 2020 voter) at 1715, and Kaplan again at 1800.

00:01 GBP UK Gfk Consumer Confidence

00:30 AUD Aus HIA New Home Sales (MoM)

01:00 CNY China NBS PMIs

13:00 EUR Germany CPI

13:30 CAD Canada Current Account

13:30 USD US Jobless Claims

13:30 USD US Preliminary GDP/PCE

14:45 USD Chicago PMI

21:30 AUD Aus AiG Performance of Mfg Index

21:45 NZD NZ Building Permits s.a. (MoM)

23:30 JPY Tokyo CPI/Unemployment Rate

Friday March 01

Today is the first day of the new month, and of course the end of the 90-day trade truce, and the date China tariffs are increased from 10% to 25% on $200 billion of goods. The shutdown-delayed December US PCE report (the Fed’s preferred inflation proxy) is released. Fed Bostic (dovish, non-voter) speaks at 1815. Italy presents its latest budget at 1000, which may result in a fresh row with Brussels. Markets in South Korea are closed.

01:45 CNY China Caixin Manufacturing PMI

08:30 GBP UK Markit Manufacturing PMI

08:30 EUR Germany Markit Manufacturing PMI

08:55 EUR Germany Unemployment Change/Rate s.a.

10:00 EUR Eurozone Unemployment Rate

10:00 EUR Eurozone CPI

13:30 USD US Core PCE Price Index/Personal Spending

13:30 CAD Canada GDP

14:45 USD US Markit Manufacturing PMI

15:00 USD Michigan Consumer Sentiment Index

15:00 USD US ISM Manufacturing PMI/Prices Paid

18:00 WTI Baker Hughes Rig Count

23:30 JPY Japan Jobs/applicants ratio

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