Hi Folks.
Here is this week's forecast.
SUNDAY: No holidays to announce this week, but there might as well be. New Zealand leads off at 6:30 p.m. my time with the BusinessNZ Services Index which rarely sees more than a 5-6 pip move post release, and at 7:01 p.m. the Brits drop their Rightmove Housing Price Index m/m. It's a minute after midnight in Great Britain when this one pops its head out of the hole, so we should give it the same amount of weight the British do and PASS.
MONDAY: Asian/London Session: We begin our tour of dumpster fire numbers in Japan at 12:30 a.m. and their Tertiary Industry Activity m/m number, which tends to come and go each month unnoticed by traders. Pass. At 5:00 a.m. the EU drops their Trade Balance number. Pass. Canada's contribution of fuel for the fire is their Housing Starts number at 8:15 a.m., followed by their Foreign Securities Purchases number at 8:30. Double Pass. New Zealand adds their two cents (in terms of price action, anyway) at 6:45 p.m. with a pair of PPI numbers best known for doing absolutely nothing to move the NZD in either direction. Pass. Finally, Australia adds the Westpac Consumer Sentiment number to the flames at 8:30 p.m. Sticking with the theme for the day, PASS!
USA Session: 10:00 a.m. brings us the National Association of Home Builders Housing Market Index. If you were planning on getting out of bed early for this one, don't bother. Pass.
TUESDAY: Asian/London Session: Asian/London Session: 4 a.m. starts us off with that monthly EU Current Account number, which isn't the worst number the EU releases, but I don't remember the last time we saw more than 15 pips of movement in the 30 minutes after it dropped, so at this point its a pass. But given how slow trading is these last two weeks, 15 might actually look pretty good in comparison. So you get to make the call on this one. Canada releases its CPI number, along with about a half dozen variations of same, at 8:30 and typically you see anywhere from 20-40 pips, although there have been a few months where it stalled out around 16 or so after a half hour. Overall it's still a pretty good bet and if you trade the USDCAD, this is one to pay attention to. At 7:50 p.m. Japan releases Core Machinery Orders m/m and Trade Balance. These were released together 2 months ago and saw 15 pips movement. When they come out unlinked, they individually show 12-16 pips movement most times (one date showed 20.1 pips movement, so it's not an automatic pass, but it is really close to being one.) Since it's Summer Doldrums, it's best to Pass. Finally, at 10:00 p.m., New Zealand announces their Interest Rate decision, and according to a Reuters poll, they are expected to cut their rates by another quarter point, dropping it from 3.25% down to 3%. They also have a Press Conference set for 11 p.m. Because it's an interest rate decision you would expect to see some real tradeable price action post-release, but 2 of the last three meetings showed less than 15 pips movement in the hour after the number dropped. So this one is a fairly safe pass as well. Unless they leave the rate at 3.25%. Then you might see some actual fireworks take place. But the NZ Fed isn't locked into a winner take all death match with their Prime Minister like the US Fed is with the President, so they are pretty likely to cut and the NZDUSD is likely to remain asleep until further notice.
USA Session: Building Permits and Housing starts both drop at 8:30 a.m., not that anyone is going to notice. Pass. Fed Speak at 2:10 p.m. (nobody cares) and that API bulletin for Oil traders is set for release at 4:30 p.m.
WEDNESDAY: Asian/London Session: 2:00 a.m. starts with the EU's German PPI number, which does little for the EURUSD, but also at two is Britain's CPI numbers, and those are typically good for 25-40 pips in the hour after release, so a most definite trade opportunity on the GBP pairs. The Brits also have a Housing Price Index number at 4:30 a.m. you can safely ignore. At 5:00 a.m., the EU releases their Final Core CPI y/y number, which sounds good on paper but has a long history of sub-10 pip moves. Pass. Canada has a New Homes Price Index number at 8:30 a.m. but it too is in the sub-20 pip club so pass. The evening numbers are all trash, although both Australia and Japan release Flash Manufacturing and Services numbers (Australia at 7 p.m., Japan at 8:30). Not worth trading but they might give you a glimpse at what to expect during tomorrow's session when the rest of the western world releases their own versions.
USA Session: Crude Oil at 10:30 is our first (and only) number for the day. Fed Speak at 11:00 and 3:00 and the Minutes from the last Fed Meeting drop at 2 p.m. So far this is the worst week for US based news I can recall from recent memory.
THURSDAY: Asian/London Session: Individual numbers set to drop today are mostly hot garbage, but we do have that set of Flash Manufacturing and Services PMI numbers for France (3:15 a.m.); Germany (3:30 a.m.); Euro Union (4:00 a.m.) and Great Britain (4:30 a.m.) dropping at their allotted times. rarely do any of them individually do much but if you spot a trend with the numbers being all good or all bad, you might spot a trend on the EURUSD that is worth tapping into. Maybe. Given the lackluster trading this summer, I really doubt it. The rest of the numbers are not worth going over until we get to Japan's National Core CPI y/y number at 7:30 p.m. The USDJPY has seen 20+ pip moves 2 of the last 3 months and for that third month it only missed 20 by a hair. So this one is probably worth watching, but because of the lousy trading conditions in August, if you see price stall out around 15-16 pips, take it and run.
USA Session: Not the best set of numbers I've ever seen on a Thursday during the US session, but at least we have numbers today. Unemployment and Philly Fed both drop at 8:30 a.m. As noted previously, Unemployment has not moved the markets much lately, and Philly Fed has been dead on arrival for a few years now. Combining them likely won't create any sort of synergy that translates into 50 pip moves. But this week has been so terrible in terms of news to drive prices, it might be trader's last chance to make things happen before the weekend (yes, I already peeked at Friday's lineup...it's today or nothing). We get the Flash numbers out at 9:45 a.m. (together and 15 minutes earlier than normal...if the Unemployment/Philly numbers fail to move the markets, maybe these will do the trick). Existing Home Sales at 10:00 along with the Conference Board Leading Index number. Hard Pass on both. And as a reminder, today is the first day of the Fed's Annual Jackson Hole Wyoming Symposium. Press conferences are held throughout each day at this confab, so any surprises the Fed chooses to spring on the unsuspecting trading public will definitely have outsized impact on the markets. So be aware this is lurking in the shadows today and tomorrow.
FRIDAY: Asian/London Session: Germany's Final GDP q/q drops at 2:00 a.m., along with the Brit's Retail Sales number m/m. For the German number, it typically is a sub-20 pip mover, but three months ago posted a 27 pip move. Further investigation showed LaGarde from the EU Fed was set to speak an hour later and the text of her speech was released just after this German GDP number hit the wires. So that was the likely source of the price action. So pass on the German GDP. British Retail sales, on the other hand, has a long history of 20+ pip moves linked to this number. So a definite trade chance here. At 8:30 Canada releases their Retail Sales numbers (Core and Overall). I've mentioned in the past that most Canadian numbers provide an outsized response on the CAD charts compared to their EUR and GBP counterparts. And for a long while, FF awarded this number the coveted Red Folder status, and frankly, it was well deserved. 3 months ago FF downgraded them to Beige status, and while the number 3 months ago broke 20 pips, the last 2 months have been well below my 20 Pip Red Line. So we have a mixed bag here. A long history of tradeable results versus a recently declining response, coupled with the fact it's mid-August and the Summer Doldrums are in full force and effect right now, and it's Friday and it's the last number of the week. So keep an eye on it but don't expect much, if anything.
USA Session: Nothing. Absolutely nothing. But the Fed is in Day Two of their Jackson Hole Symposium, so be aware they could drop a bomb into the middle of some otherwise comatose charts today. But we have no way of knowing the whens, wheres or whys.
See you back next week for what I suspect will be an even worse set of numbers to close out August.
Jeff
