Hi Folks,
As I promised last week, welcome to our first August Forecast of the year. It seems like only yesterday I was complaining about how hot it was in April and now look at us. Starting August, and before you know it, starting September and then October. I, for one, am looking forward to switching from blazing hot to bitter cold (and yes, it does get bitterly cold in Florida on occasion, although when it does, Northerners all point and laugh at us as they head to one of our many beaches in their Speedos and thongs). So maybe bitter is subjective.
But the good news is we are officially starting a Countdown Clock on the end of this year's Summer Doldrums. This year hasn't been as bad as some of the others over the last 20 years, but it's been rough sledding more often than not. But a few more weeks and this year's version will be in the history books as well.
So on with the show.
SUNDAY: We start with a public holiday in Australia (where it is Monday the 3rd already) and my quick research learned it's just a day off for some banks in New South Wales. Everyone else has to go to work. As holidays go, this one kind of sucks. Unless you work at a NSW bank, in which case, Woo-Hoo! The actual reports are all junk, as is usually the case on Sunday evenings, so no need to get serious about trading until tomorrow, which arrives in about 6 hours.
MONDAY: Asian/London Session: We start off with German Retail Sales at 2:00 a.m., followed by Swiss CPI at 2:30. The German number is a non-starter, so Pass without hesitation, and the Swiss CPI number is yet more proof only the US and UK CPI numbers are worth following (5, 12, and 12 pips over the last 3 months). Then we get the monthly Group PMI exercise, with Spain dropping at 3:15, followed by Switzerland at 3:30, Italy at 3:45, France at 3:50, Germany at 3:55, the Eurozone at 4:00, and the UK at 4:30 (no Canada today, presumably because they too are taking the day off to observe Civic Day). Standard rules apply. Trend = Trade, No Trend = No Trade. The evening session numbers are pathetic and can be safely ignored.
USA Session: The first number out of the gate is the Boring Final Manufacturing PMI at 9:45. Traders routinely ignore this one in favor of the 10:00 a.m. ISM Manufacturing PMI. This one used to do great, then started doing okay, then they started pairing it with JOLTS and a couple of other mid-tier numbers and it went back to being fairly decent. But today, it's effectively alone (no one counts ISM prices or Construction Spending, which never, ever moves prices around on their own). But the last 3 months have been 25, 11, and 20 pips, which is just barely enough to look interesting (if the 11 had been a 17 it would be automatic). But again, we are in Summer when not much happens, and at the end of this week we get the NFP, so maybe this one is spaced far enough from Friday it inspires traders to make at least a little something happen. Don't just blow it off. Keep an eye on it. The remaining numbers are "tentative" so not even worth mentioning since we have no idea when they will appear.
TUESDAY: Asian/London Session: One of those mornings where the individual EU member states get to post a few in-house numbers which mean absolutely ZERO to traders. Canada has a Trade Balance number dropping at 8:30 but this one's past three numbers (12, 6, and 11) fail to inspire. And Canada makes up for the vacay day yesterday by dropping their Manufacturing PMI number 24 hours after the circus has left town, so essentially, no one cares. The evening numbers are basically ignorable, including the New Zealand NFP at 6:45, which has posted a stellar set the last 3 months of 18, 20, and 2. The first two (18 and 20) are pretty good numbers, obviously, but they also came as complete surprises to most traders when they landed. If you trade the NZD, by all means, tune in and keep an eye on the goings on. Just don't expect too much.
USA Session: The USA's Trade Balance drops at 8:30, the same time as the Canadian version. It still likely won't do very much. After that we get the JOLTS Job Openings number along with Factory Orders. I've mentioned before that as a standalone number (which it is today because no one even knows Factory Orders even exists) this one rarely approaches 20 pips. The previous 3 numbers were 15, 14, and 25, and the 25 is absolutely not explainable, other than to say the move continued into the 11 o'clock hour so there was probably something political happening and the news broke right about the time JOLTS dropped. So don't get overly excited by this one. And plan to stay not excited because after Jolts we get that floating RCM/TIPP Economic Optimism report, and close out with the API Oil Report at 4:30. So all our hopes and dreams hang on a JOLTS number today. I don't like our chances.
WEDNESDAY: Asian/London Session: We get the second half of the PMI pair, Services, starting with Spain at 3:15, followed by Italy at 3:45, France at 3:50, Germany at 3:55, Eurozone at 4:00 and the UK at 4:30 (and again, no Canada number today either). Trend = Trade, No Trend = No Trade. Two numbers you can easily ignore in the evening session. All in all, it isn't looking good for today.
USA Session: Since the NFP is on the horizon and today is Wednesday, that means the monthly ADP Non-Farm Employment Change at 8:15 a.m. As usual, this one does nothing for price action but might give us a clue as to what to expect Friday morning. 9:45 is the generic Services PMI number traders will ignore, followed by the ISM Services number at 10:00. A month ago, in these very pages, I wrote that the ISM was a Red Folder report, but who knew how much longer that charade would be maintained. Today, we find out the answer to that question was roughly one month, as the ISM Services PMI has been downgraded from Red to Beige, the intermediate stop on the way to its inevitable classification as Yellow Folder Dumpster Fire Starter Fuel. It reminds me of one of my favorite WKRP in Cincinnati episodes, where Dr. Johnny Fever responded to a Cincinnati Garbage Haulers strike by suggesting his listeners dump their garbage on the Mayor's lawn. He was then stunned into silence when hundreds of people took his advice and a new crisis developed with the mayor being under 10 feet of trash. He thought his show had no listeners, and he actually lost his voice over it and could not broadcast for a while when he learned the truth. I admit I was just as shocked to see the Beige folder, and have to wonder if this was just a coincidence, or is FF taking their cues from these pages? My money is on coincidence. Definitely coincidence.
THURSDAY: Asian/London Session: Not a single number, morning or evening, designed to move prices around in any noticeable (or tradeable) fashion. If you are a seriously news-focused trader, today might be a good time to sit this one out.
USA Session: And the same goes for the US session. Only the Weekly Unemployment numbers ever give even the slightest reason for a mass of traders to all head one way or the other after the drop. The rest of the calendar is a great big nothing.
FRIDAY: Asian/London Session: An easy one today. Don't bother until 8:30 when Canada drops their version of the NFP. The last 3 months generated 39, 28, and 11 pips. And you can ignore the 11 pip one because that was a month when they released their number a week AFTER the US NFP. I use the USDCAD to track pip movements on CAD reports, so when both nations drop their NFP at the same time we see fireworks (like 30-40 pips worth of fireworks). That's what's on tap for today (see below) so be ready. This one can make up for a bunch of otherwise lousy days already in the books or headed our way over the next few weeks.
USA Session: US NFP at 8:30. One of the three High Holy Days of trading. You miss this one you miss out on a chance at 21, 49, or 74 pips, which is what we saw on the EURUSD the last three months when NFP exploded onto the scene. None of the rest of the calendar is worth even mentioning. It's all about the NFP today.
See you back here next week as we creep ever closer to normal trading after the Summer Doldrums wander off for another year.
Jeff
