Hi Folks.
Just an ordinary average week ahead of us. The A/L session actually has a couple of days where it looks like traders might see some real price action for a change, but the US session is somewhat quiet in anticipation of next week's Fed Interest Rate decision. More on that in next week's forecast.
Here is this weeks:
SUNDAY: A full calendar for the night except most of the entries are Chinese, and grouped from 8:30 to 9:00 p.m. my time. I don't cover Chinese numbers but I will say this: if you are trading from 8:30 to say, 9:30 p.m. my time and you see a sudden price move [not something you see a lot of on Sunday evenings] it likely is your chart's reaction to the Chinese numbers. So if you are trading during that small window of time, be aware these numbers are out there. Otherwise, we have Japan's Core Machinery Orders m/m at 6:50 p.m., Australia's Melbourne Institute Inflation Gauge m/m at 7:00 p.m., Great Britain's Rightmove Housing Price Index at 7:01 p.m. (midnight:01 local time), and then Japan's Tertiary Industrial Production m/m and Tertiary Industry Activity m/m, both at 11:30 p.m. None of these have a history of moving enough to justify taking on the risk of a trade, so Pass on all.
MONDAY: Asian/London Session: The World Economic Forum and the Eurogroup both hold meetings all day. I doubt anything will come out of either one, leaked or planned, that will move markets around. But they are out there. Just don't waste any brain power worrying about it. At 5:00 a.m. the Eurozone releases their final Core and Overall CPI y/y numbers. Typically it's the early/advanced numbers traders watch (and even those fail to post anything close to being worth trading) so don't expect anything here either. Canada releases their CPI in all its different forms at 8:30, and while historically the CAD CPI has been a decent mover, lately it's been moving the wrong way, as in 25, 17 and 10 pips over the last 3 months. Given this measures inflation during the Christmas holiday, it might show a deviation from expectations and post something above 20 pips once again. But that's just pure speculation on my part. Given the lack of other news options today, be ready to do something if you see a move get underway. Just don't bet the house you'll see anything at all. The CADs also have a Business Outlook Survey at 10:30 a.m., but it's not a number so Pass. We close at 4:30 p.m. with the New Zealand BusinessNZ Services Index, which rarely moves the needle even slightly, so Pass.
USA Session: A day off for the markets for Martin Luther King Jr. Day, a federal holiday.
TUESDAY: Asian/London Session: We start with a German PPI number (which will have zero impact on the EUR pairs) and the Great Britain Claimant Count numbers (think British NFP). The last 3 months for this one gave us 50, 35 and 17 pips. The bigger two numbers dropped when the expected number was shattered by the actual number (E: 10k, A: 25k, E:17k, A: 29k) and the small number was a bit better than expected but almost exactly on target. However, last month the 2:00 a.m. number drop spurred an almost 100 pip rise in the GBPUSD over the next 4-5 hours. So this one can have a huge impact on prices. Do not ignore. WEF and now the ECOFIN are meeting today, but we still don't expect anything out of them. The Swiss PPI at 2:30 and the Eurozone Current Account number at 4:00 a.m. are both non-events in terms of trading, and that also applies the the German and Eurozone ZEW Economic Sentiment numbers at 5:00 a.m. Bailey from the British Fed speaks at 4:30 p.m. (think Powell/Lagarde in terms of importance) so you might see some movement while he speaks but we have no way of finding out in advance how the markets will respond to what he says; and we have that floating New Zealand GDT Price Index, which comes out while all of New Zealand slumbers, so we can ignore it for two reasons instead of one. At 11:30 a.m., we have the heads of both the Swiss National Bank (Schlegel) and the German Buba (Nagel) speaking at the WEF conference. Both are Powell-level speakers but we can't trade speeches we can't even see (or understand). Finally, Australia closes us out at 6:30 p.m. with another Melbourne Institute number, the Leading Index, which is universally considered to be a joke (the Leading Index part) and will be equally ignored by traders.
USA Session: We get one lousy number, the ADP Weekly Employment Change number, listed as "tentative". It's been tentative since they started including it in the calendar back during the shutdown, but the reality is it's been dropping exactly at 8:15 a.m. like clockwork, so ignore tentative and think 8:15. However, the last 4 numbers that dropped generated 9, 9, 6 and 4 pips, so this one goes on our Pay No Mind list until further notice.
WEDNESDAY: Asian/London Session: We start with one of the numbers I cryptically referenced in the intro, the British CPI number (along with a bunch of related numbers) (and the cryptic reference was about seeing decent price action during the session). We might have seen some yesterday with the Brit NFP, and today we get the Brit CPI, which has posted 51, 25 and 45 pips over the last 3 months. No reason to think we'll see anything less than that here today. So get ready traders. The WEF is still meeting, likely trying to come up with a happy way of convincing us to eat bugs (no, that isn't a joke. Google it). At 2:30 a.m. Lagarde speaks. The 4:30 a.m. British Housing Price Index y/y and the 6:00 a.m. CBI Industrial Order Expectations likely won't do anything, so pass. Canada releases a couple of PI numbers (IPPI, RMPI) that haven't done much one way or the other for Loonie prices. Pass. Lagarde speaks again at 11:30 a.m. (both her talks are at the WEF meeting, as is Nagel's speech set for 1:30 p.m.); we get New Zealan's Visitor Arrivals at 4:30 p.m. followed by Japan's Trade balance at 6:00 p.m., and neither will likely move their respective currencies around much, if at all. Finally, Australia releases their version of the NFP (Employment Change/Unemployment Rate) at 7:30 p.m., and while FF considers this Red Folder worthy news, the charts show moves of 8, 10 and 8 pips over the last 3 months. An easy Pass.
USA Session: Our first entry is President Trump speaking at that WEF shindig in Davos Switzerland. It probably won't impact the markets much but it should be entertaining because he doesn't like those in attendance very much. After that we get Home Sales and Construction Spending at 10:00 along with some of the older versions of the same numbers. New or old won't matter. Pass. Then we close out at 4:30 with the API Oil Bulletin, which is not a number. So pass here as well.
THURSDAY: Asian/London Session: Nothing in the morning session worth discussing. It's either reports (not numbers), numbers of no value, or the ongoing WEF meetings (how do you like your bugs? Boiled, Fried or Sushi Style?) At 8:30 Canada releases a New Home Price Index number and this one lands on the short list of Canadian numbers that fail to move the Loonie enough to justify trading. A Consumer Confidence number at 10:00 for the Eurozone, and at 4:45 p.m. New Zealand releases their CPI q/q. I don't recall what I wrote about this 3 months ago, but it likely wasn't too kind. The last 3 numbers posted 3, 19 and 11 pips and the 19 pips happened when inflation landed a tick lower than expected. So watch the numbers and if they miss and inflation falls, so may the NZD pairs. At 5 p.m. Australia drops their Flash Manufacturing and Services PMI numbers (Japan drops their Manufacturing number at 7:30 p.m.). They might give you a hint how the Euro versions of the number will fare tomorrow, but that's about all the impact they have. The Japanese National Core CPI y/y number usually lands around 10 pips +/-, so a huge Pass, and the Brits drop their GfK Consumer Confidence number at midnight:01, so if they can't be bothered to release the number when the country is awake, we shouldn't worry about it either. Pass. Lastly, the Japanese release their Interest Rate Decision at "tentative" meaning there isn't much we can do about it except be aware it's going to happen at some point tonight or early tomorrow morning (a big deal for Yen traders).
USA Session: Today at 9:30 a.m. a bunch of number producers play "catch up" with the missing numbers from the government shutdown. But the timely numbers do include the Core PCE Price Index m/m, which is supposed to be the Fed's favorite inflation measuring tool, and the Final GDP q/q. Either or both can move things around at 8:30, so be ready. All the other numbers listed at 8:30 or tentative (October Data) simply won't matter. It's all about PCE and GDP. Nat gas at 10:30 and Crude Oil at 12:00 noon wrap up our day.
FRIDAY: Asian/London Session: We open with the usual "tentative" Bank of Japan Press Conference that always follows the "tentative" Interest Rate Announcement. We can't trade it but it still could do some damage depending on what's said. Then at 2:00 a.m. Great Britain releases their Retail Sales number. 19, 26 and 11 are the last 3 pip counts tied to the RS number. Given this month's version will include Christmas sales, we can expect a good number, which hopefully translates into good price action. Be ready just in case. Then we get the string of Flash Manufacturing and Services PMI numbers out of France (3:15 a.m.); Germany (3:30 a.m.); Eurozone (4:00 a.m.); and Great Britain (4:30 a.m.). The usual rules apply. Watch for a trend to develop with the earlier numbers. Trend = Trade. No Trend = No Trade. WEF is still meeting (I wonder if they are taste testing the bugs or waiting for all of us to try them first?). British Fed Speak also at 4:30 a.m. (non-Davos related) but Lagarde at 5:00 a.m. is yet again speaking at Davos. We close out the session and the week with Canadian Retail Sales, a beige folder set of numbers according to FF, but with pip results of 7, 9 and 10 the last 3 months (on 30M candles) I color it Pass.
USA Session: 9:45 a.m. brings us the Flash Manufacturing and Services PMI numbers, but these are considered lesser to the ISM numbers that will come out in a couple of weeks. Given the lack of decent numbers this week, these PMIs could end up trading better than normal simply because it's one of the few numbers traders can hang their hats on. But I wouldn't go in expecting to make bank off these today. If they generate some pips, great. Just don't count too heavily upon it. Then at 10:00 we get the Revised UofM Consumer Sentiment and Inflation Expectation numbers. Not as well followed as the Preliminary numbers that came out a couple of weeks back, but again, because we simply lack much else to work with this week, it could end up playing out better than expected. But I wouldn't bet the house on it.
And that closes out yet another forecast for 2026. Our fourth (or third and a half) for the new year. I don't know about you but it seems to me as if the new year is already flying past at top speed.
See you back here next week with another forecast.
Jeff
