Hi Folks.
Here is this week's forecast.
SUNDAY: Typical Sunday night. A couple of ultra low-level reports (BusinessNZ Services Index at 6:30 p.m. out of New Zealand and Core Machinery Orders m/m at 7:50 p.m. out of Japan) and then nothing until Monday (because I don't count Chinese reports/numbers).
MONDAY: Asian/London Session: Monday leads off with a pair of Japanese reports at 12:30 (Revised Industrial Production and Tertiary Industry Activity) and neither has impressed, although both have flirted with our 20 pip minimum for consideration. Maybe pairing them tonight will get traders over the hump and make keeping an eye on the USDJPY when these numbers drop worthwhile. Maybe. The French take a holiday today and the only reason I mention it is because the holiday is called National Day in the FF calendar, but those of us old enough to remember know the true name is Bastille Day, one of my favorite holidays ever. But I guess PC culture has forced a name change here as well. Quelle dommage. The rest of the calendar is mostly Yellow folder filler and not worth the effort, until you get to the Canadian Wholesale Sales m/m number at 8:30 a.m. I've mentioned in the past that a lot of Canadian numbers move the USDCAD around when the US version of the same generates barely a blip in price action, and this one is the Poster Child for that idea. Usually worth 20 pips =/- in the 30 minutes after release so worth at least a glance if you are a CAD trader.
USA Session: Zip. Nada. Zilch. Not even some random Fed Speak.
TUESDAY: Asian/London Session: The morning portion is quiet with only the ZEW numbers coming out for Germany and the EU at 5:00 a.m., and aside from 3 months ago when traders saw just over 20 pips, the remaining months have been single digits. So no need to get excited here. At 8:30 however, the CAD once again rides to the rescue with their multitude of CPI numbers (Overall, Core, Median, Trimmed, Common, Covered, Smothered...okay, those last two are actually Waffle House methods for serving hash browns, and if you've never eaten at a Waffle House, you owe yourself that experience, especially if you are not bothered when the line cook's cigarette ashes fall and hit the grill and end up casually mixed in with your order). It's CPI, which in Canada typically means big price moves. So pay attention to this one. The rest of the session (morning and evening) is pure trash (aside from Bailey from the BOE speaking at 4 p.m., but no one should be trading at 4 p.m. anyway). Pass.
USA Session: So CPI at 8:30 makes up for the lack of news yesterday. Strap in, because this one could really move things around given the stalemate between the Fed and the White House over interest rates and the Fed reasoning for keeping them high. This is better than Days of Our Lives in terms of morning drama. A bunch of Fed Speak in the afternoon and that API report after Oil closes for the day. None of that other stuff matters. It's all about CPI today.
WEDNESDAY: Asian/London Session: Feeling a bit left out, the Brits release their CPI number at 2:00 a.m., and this one is also very well known for being the engine behind a bunch of 40+ pip moves on the GBPUSD (and although I haven't looked in a while, I presume the other GBP pairs as well). The rest of the morning is junk numbers, and the evening session isn't much better. At 9:30 p.m. the Aussies release their version of the NFP, but the last 3 months have generated 10, 15 and 11 pips respectively, so this one is a pass as well, in spite of the Red Folder status awarded it by FF.
USA Session: Yesterday was CPI, so today must be PPI, right? Right. It's tradeable, but typically does not generate the kind of sustained price action we'll likely see from the CPI. But we still need to pay attention, particularly in mid summer when price action is already slower than normal pretty much across the board. Anything that has even a small chance of making prices go zoom is worth watching. Unfortunately, in spite of the significant number of reports coming out over the course of the US session, none of the remaining numbers are likely to create even a light breeze, much less a firestorm. Crude at 10:30 will do it's usual for Oil traders and the Beige Book from the Fed comes out at 2 p.m. and might cause a small ruckus, but probably not, as it isn't a number but rather a written report.
THURSDAY: Asian/London Session: British Unemployment numbers (Claimant Count) at 2:00 a.m. Over the last 3 months, only last month cracked 20 pips (barely) so maybe. But probably not. Euro CPI comes along at 5:00 a.m. but has posted sub-20 numbers for 3 straight months, so pass on this one as well. In the evening session the Japanese National Core CPI number hits at 7:30 p.m., and the previous month may have stunk the joint up some (10 pips) but the two months prior were solidly in the 20-30 pip range. So yet another Maybe, and this one leans a bit towards probably. Ignore the New Zealand Credit card number at 11:00 p.m. I plan to.
USA Session: A bunch of Red Folder numbers at 8:30 (Retail Sales, Weekly First Time Unemployment Claims) and several other non-Red folder numbers (Philly Fed, Import Prices) which might generate at least a small amount of activity, but none of them have done much on their own lately. Yet one more Maybe and I honestly have no idea if Maybe means yes or no in this instance. So maybe. The rest of the session is Fed Speak and dumpster numbers so there just isn't much to do after the 8:30 numbers come and go.
FRIDAY: Asian/London Session: Short session today. At 2:00 a.m. the German PPI m/m number appears, and it consistently sucks, so Pass. At 4:00 a.m. the Euro Current Account (the difference in Imports versus Exports) drops and except for April, which posted a 30+ pip drop in EURUSD prices, the rest of the numbers are linked to a lot of sub-20 pip price action. So it too is a safe Pass. Finally, at 4:15 a.m., German Buba President Nagel speechifies at the end of the G20 meetings in South Africa, and I haven't mentioned those were ongoing this week because frankly, no one pays attention.
USA Session: Housing numbers (Starts and Building Permits) at 8:30 a.m. and the Preliminary UofM Consumer Sentiment and Inflation Expectation numbers at 10:00 a.m. Not exactly worth getting out of bed early for. But looking back at the UofM numbers, they have the ability to pop off for 20-30 pips over the hour after the number drops, so if you are trading Friday morning, keep in mind the 10:00 a.m. numbers might be worth a look.
See you back here next week.
Jeff
