Hi Folks.
In the early 70's Hollywood produced a movie called "Suppose They Gave a War and Nobody Came" which actually had a fairly impressive list of names involved. I never saw it and likely never will. I only bring it up because last week begged the question "Suppose They Shut Down The Government and Nobody Noticed", which is exactly what happened for a couple of days.
Apparently they just didn't cause enough turmoil from the last shutdown, so they ran an abbreviated Part II that only lasted long enough to knock the NFP and related numbers set for release last Friday off the calendar, rescheduled for this week.
But last week's loss is our gain this week, assuming they follow through as promised. In the same week we get NFP and CPI, 2 days apart. This could end up making this the best week for trading we've seen since last Spring.
So get ready.
SUNDAY: We lead off on a typical Sunday with two events either already behind us or simply not tradeable. Japan has Lower House elections all day (can't do anything with that) and at 1:40 a.m. Sunday, Bailey from the Bank of England is speaking in Saudi Arabia. Nothing we can do when the markets are still closed, so an automatic Pass. The balance of the calendar entries are filler numbers and not likely to move things more than 5-10 pips. Pass
MONDAY: Asian/London Session: The entire session is hot garbage. Morning and Evening. Sometimes we get at least one number worth mentioning. This is not one of those times.
USA Session: Same for this session. Fed Speak at 1:30 and 3:15 p.m. Total pass.
TUESDAY: Asian/London Session: Japanese Preliminary Machine Tool Orders at 1:00 p.m. routinely fails to move the charts at all. Pass. For the evening session it is noted that Japan has a Bank Holiday, and Australia has Fed Speak at 8:30 p.m. and a tentative NAB Quarterly Business Confidence number. Literally nothing we can work with at any point today.
USA Session: A host of numbers for the US of A, but once you peel back the cover...NFIB Small Business Index number at 6:00 a.m., when the entire country is still asleep, so Pass. The ADP WEEKLY Employment Change number is still listed as tentative, but it doesn't matter because it doesn't generate more than 5-10 pips after release, if it has any effect on release at all, which is doubtful. Then at 8:30 a.m. the economic floodgates open with a bunch of numbers that should have dropped a month ago. Retail Sales, both core and overall, and originally set for release 27 days ago, drops along with Employment Cost Index q/q (11 days late) and Import Prices (26 days late). Given the quality of numbers due the rest of the week this one looks like an easy Pass. At 10:00 we get Business Inventories that can be on time or a year late and the market will still ignore it 100%. Pass. Fed Speak at 12:00 and 1:00, followed by that API Oil Report (keyword REPORT) at 4:30, so a hard pass on a non-tradeable report.
WEDNESDAY: Asian/London Session: Two country specific numbers (Italian and German) drop at 4:00 a.m. and at "tentative", so pass on both. Canadian Building Permits is one of the few lesser tier numbers that typically fails to move the Loonie any measurable amount. Pass. At 1:30 p.m. Canada releases their Summary of Deliberations over their last Interest Rate decision, which is yet another report and not a number, so one more Pasadena. Japanese PPI is at 6:50 p.m., and the last 3 numbers generated 6, 10 and 5 pips in the 10 minutes after release, so an easy Pass. 7:00 p.m. Melbourne Institute Inflation Expectations has the same effect on the AUD as these reports have on other currencies, which is to say ZERO, so pass. The GBP Housing number comes out at midnight local time, so Pass, and Australian Fed Speak closes us out at 11:45 p.m.
USA Session: Non Farm Payroll, 5 days late. If it was 27 days late (see above) we'd probably need to do some serious analysis as to whether it will matter. I don't think this is the case here. Just a few days and frankly, the first really tradable number in either session for the week. So I expect to see the typical NFP fireworks. Crude Oil at 10:30 like usual, the 10 year bond auction at 1:01 and the always laughable Federal Budget Balance at 2:00 p.m. None of the later stuff will matter except Oil for Oil traders. It's all about the NFP today.
THURSDAY: Asian/London Session: We start with the GB GDP m/m number. The last 3 generated 28, 17, and 20 pips movement, so it's worth a look, particularly since this session has been in a coma since the Sunday evening open. It might not get right to 20 pips but it should at least get close, and if the number is a miss, so much the better. All the other GBP numbers set for 2:00 a.m. won't matter. They won't hurt, but they also won't matter. The Eurozone posts a "tentative" 10 year bond auction (Pass), as is the Canadian Fed Speak at 8:45 a.m., the two separate Conference Board Leading Index numbers (GB at 9:30 and AUD at 10:30), the Eurozone Fed Speak at 2:30 p.m. and all the New Zealand numbers scattered all over the afternoon/evening calendar. One great big Passalooza.
USA Session: Weekly Unemployment Claims at 8:30 has been a snoozefest for quite a few weeks now, so pass. So are the housing numbers at 10:00 and "tentative". Nat Gas at 10:30, followed by the 30 year bond auction at 1:01 p.m. Pass on them all. Then we get some after-sundown Fed Speak at 7:00 and 7:05 p.m. Pass and Pass.
FRIDAY: Asian/London Session: German Wholesale Price Index is a non-event at 2:00 a.m. Swiss CPI is at 2:30 and goes a long way to support my contention that USA CPI = Good, GBP CPI = Good, and everybody else = Not so good. Typically a single digit response in the USDCHF to this one in the 30 minutes after release. The 5:00 a.m. conglomeration of Flash Employment Change q/q, Flash GDP q/q, and Trade Balance usually don't do much for the EUR pairs on their own, but perhaps today, with this being one of the only vaguely interesting calendar entries in the A/L session all week, and this being Friday AND this being the last real trade opportunity for the week in the Asian session, it might generate enough action in the EUR pairs to justify the risk of trading. Maybe. But these are all Yellow Folder numbers for a reason, and I can't find fault with FF's decision on this one. If you trade it, be ready to bail at the first sign of trouble. We close out the A/L session with Brit Fed Speak at 7:00 a.m.
USA Session: CPI: Core, m/m and y/y, and only 2 days late thanks to the government shutdown. Given the somewhat frantic nature of price action over the last few days (prior to this week) I expect this one to bring it's full complement of fireworks with it as well. Since we didn't get to close out last week with the NFP, this week's closing with CPI is a solid make up kiss. So be ready and if you can only trade one or two days this week, make sure this is one of them.
See you back here next week, hopefully with no more shutdown stragglers to deal with (I'm looking at you, PPI!)
Jeff
