Hi Folks.
Here is this week's forecast.
SUNDAY: No news tonight, just a notification that Australian and New Zealand banks are closed for Anzac Day, a day of remembrance for all those from Australia, New Zealand and the Tonga region who fought and died during wars and conflicts.
MONDAY: Asian/London Session: So we start off the week with a very short list of garbage news entries, but close the day with the Japanese Interest Rate decision (they are expected to remain at <.75%), and as always, listed as Tentative. So just be aware it's out there and don't be surprised if you see sudden price action on the JPY pairs (and the JPN225) at some point between 11 pm and Midnight, eastern time.
USA Session: Not a single bit of news for today. Not even Fed Speak.
TUESDAY: Asian/London Session: Japan exercises its influence over the Asian part of this session by both releasing their Core CPI number at 1:00 a.m., and also have a "tentative" listing for their post-Interest rate decision press conference. The CPI number fails to crack 10 pips most months, so that one can be ignored, and press conferences are simply wild cards...you never know what will be asked or answered during one of those which can roil the markets. So like the actual rate release pre-midnight, be aware the presser is in progress and maybe keep those stops a little tighter than usual to guard against panic spikes from the bigger market players. After the Japanese fold up their tents, it gets ugly fast. Spanish Unemployment at 3 a.m., which I only mention because their isn't anything else on tap until the evening session, which is a Japanese Bank Holiday, New Zealand Fed Speak at 8 p.m., and Australia drops their own CPI numbers at 9:30 p.m. I've mentioned many times that all CPI numbers are not alike, and the Aussie CPI, which has posted single digit responses most months, has been the poster child for that idea. However, last month, a declining inflation rate (Actual came in at 0.00% against and expected 0.1%) popped off a 26 pip move in the half hour after release. One good number does not a trend make, so let's keep an eye on this one today, and if we get another 20+ response, maybe next month we set up to possibly take the trade. But not today.
USA Session: Several entries on the calendar, but none of them impress. The ADP Weekly Unemployment number at 8:15 a.m. has been dropping for several months now and not done a thing for price action, so it's an automatic Pass until we get a significant weekly response from the market. 9:00 a.m. brings a pair of housing numbers that might generate a few pips movement but nothing worth putting any money into. Pass. At 10:00 we get the Conference Board Consumer Confidence number, which in the 20 years I've been watching this calendar has never not once been behind any sort of measurable move. It's paired with the Richmond Manufacturing Index, which has also been very quiet on the Price Action front for many years, so don't expect much from either of these, alone or as a pair. And at 4:30 we get the API Oil Report, which is a report and not a number so an automatic Pass.
WEDNESDAY: Asian/London Session: The market is flooded with those individual EU member state numbers (Spanish CPI, Italian Bond Auctions) which have zero impact on trading, so all the early stuff can be safely ignored. But at 9:45 a.m. Canada releases THEIR Interest Rate decision (expected to remain at 2.25%), and this one has been in a downward pip spiral over the last 3 month of stand-pat decisions, going from 25 to 20 to 15 pips as the most recent result. So maybe this one doesn't perform as well as you might hope for an interest rate decision out of Canada (usually a reliable 20+ point number). So be careful on this one if you decide to trade it. It might not be worth the risk if they stay in this same spiral. Canada follows with a press conference at 10:30 and that might be worth more pips than the number itself. I just don't know how to trade it. The evening numbers are not designed to impress so you can safely ignore them.
USA Session: 8:30 a.m. starts us with a bunch of mostly crap numbers. Durable Goods is the only one in the list of 8 (I'm counting the 2 month late Building Permits and Housing starts in this group since no time was given for them) that might be worth watching. A year ago this one started posting numbers that looked like they'd been picked out of a hat, and the oddity was good enough to generate some decent moves. The numbers are still all over the board but the market has mostly stopped paying attention (the last 3 numbers generated were 15, 23 and 13, and the 23 number dropped at the same time as preliminary GDP and the Core PCE number, and those two sucked all the oxygen out of the room as far as the remaining 9 numbers were concerned, so don't expect to see that repeat itself today with nothing but garbage numbers on calendar for the 8:30 session). Crude Oil at 10:30 as usual and then at 2:00 p.m. the US of A releases THEIR interest rate decision in what should be Jerome Powell's final meeting as Fed Head (Warsh is expected to be confirmed and in place for the next meeting). There are interest rate decisions that fail to impress and then their are numbers that always make prices go zoom. This is one of the latter. So expect a lot of price action after the announcement (which is expected to be that the rate remains the same at 3.75%) and then likely even more PA at the press conference set for 2:30 p.m.
THURSDAY: Asian/London Session: It starts with a "Garbage Ambulanche" (for all you Idiocracy fans out there) of useless EU Member State numbers (and the EU even sneaks in there with their region wide CPI number which rarely generates more than about 10 pips no matter how good or bad the numbers turns out), but at 7:00 a.m. my time the Brits release THEIR Interest Rate decision (expected to remain at 3.75% as well) but not followed by any presser this time. But that's ok because at 8:15 a.m. my time the EU releases THEIR interest Rate decision (expected to remain at 2.15%) but they WILL have a presser at 8:45 a.m. Also at 8:30 a.m. Canada drops their GDP m/m number, which has generated 32, 22 and 10 pips over the last 3 months. Typical pip response to this one has been well over 20 pips most months, so let's pretend we didn't see that 10 spot last month and go ahead and trade like we expect 25 or more pips today. Given the quality of today's morning numbers, we can forgive the market for posting nothing but crap for the evening session. We should all be worn out from the good trading earlier in the day anyway.
USA Session: I mentioned a day or two back that the double digit posting on Durable Goods a month or two back was likely because of the simultaneous posting of the Advance GDP and Core PCE numbers. Well guess what? We don't have no durable goods to drag us down today, but we do have Core PCE AND Advance GDP on tap at 8:30. Expect good things as a result (there are 5 other numbers dropping at the same time but they don't matter). And like most days, after this it all goes downhill quickly. Chicago PMI at 9:45, Conference Board Leading Index number at 10:00 and NatGas at 10:30. Today is all about the 8:30 numbers.
FRIDAY: Asian/London Session: Most of the Euro region is taking the day off for "Labor Day" (I'm old enough to remember when they called it "May Day", just like they did in the Soviet Union). What that means for us is another session full of untradeable garbage numbers, so maybe take a page out of the old Soviet Playbook and take the day off from the tractor factory and get an early start to your weekend.
USA Session: Things aren't much better here. We get the ISM Manufacturing numbers as a standalone entry (I don't count the ISM Manufacturing Prices) and while it has been a decent performer, the FF downgrade from Red to Beige folder tells the tale. 15, 16 and 16 pips has been the response to this one over the last 3 months. Not terrible, but not in the 25-30 pip range it once posted on the regular. So given it's the only thing we have on the calendar for today (that Ward's Vehicle floater is listed but floaters don't count) maybe take the day off in solidarity with our European brothers and sisters and start the weekend early.
See you back here next week.
Jeff
P.S.: Those of you paying attention probably saw Friday was the first Friday in May, which should mean NFP, right? Wrong. When Friday #1 lands on the first day of the month, they push the NFP release back 1 week. So expect it next Friday, barring any more government shutdowns.
