Hi Folks.
Here is this week's forecast, and is it ever a short one, as you will see.
SUNDAY: Oddly (for us) we start with a Red Folder New Zealand number (CPI) at 6:45 p.m. my time. As I've mentioned in the past, not all CPI numbers are created equal, and here is the proof of that. After a rousing 25 pip move on the EURUSD after last week's USA CPI, tonight we get the New Zealand version, which tends to land in the 10-12 pip range, making it just another day ending in Y. Nothing special and certainly not worth the risk of taking a trade. Japan is closed for the day due to Upper House Elections, and the Brits throw out their Rightmove Housing Price Index number at 7:01 p.m., which is right around midnight for them. That invokes the rule that numbers dropping when the target country is fast asleep can be safely ignored. So ignore that one.
MONDAY: Asian/London Session: Nothing in the overnight session. CAD drops a couple of Price Index reports at 8:30 a.m., but lately neither of them (which always seem to drop at the same time on the same day) generate a lot of excitement, with the USDCAD showing 10-15 pips of movement high to low during the 30 minutes after release. The CAD also releases it's Bank of Canada Business Outlook Survey (a report, not a number) at 10:30 a.m., and the evening session is limited to the New Zealand Trade balance at 6:45 p.m. and the Australian Monetary Policy Meeting Minutes at 9:30 p.m. Neither show any history of generating price action, so the entire day looks like a bust in terms of news-based price action.
USA Session: But after a gloomy Asian/London session, surely the mighty US Dollar will ride to the rescue, right? Right, but only if you mean by riding to the rescue you mean the Conference Board Leading Index Number at 10:00 a.m., a number universally ignored by traders worldwide. So not much to look forward to in terms of a rescue this day, I can assure you. But tomorrow will be better, right?
TUESDAY: Asian/London Session: Wrong. The Brits have their Public Sector Net Borrowing number at 2:00 a.m. my time (a number that is linked to a string of sub-20 pip moves, even on days when paired with other, more influential numbers). Then at 8:30 p.m. (yes, only one overnight number) the Aussies have their Melbourne Institute Leading Index number and this one has just as much impact as the Conference Board Leading Index has on all the other currencies: none. So make that two consecutive Asian/London sessions that look pathetic, at best.
USA Session: I won't even bother making the joke about the USA session being better. Powell (assuming he still has the job) is set to speak at 8:30 a.m. to a bunch of bankers about the new Big Bank Lending Rules (which look remarkably similar to the old rules that were in place in the late 90's early 2000's, and most of us still remember how well that one turned out). Can't trade it but it can destroy good trades, depending on what he says. So be careful this morning. At 10:00 a.m. we get the Richmond Manufacturing Index, which tends to land anywhere within a 100 point range between -50 and +50, so traders just ignore it at the moment, and will continue to do so until we see some proof that manufacturing has really turned a corner in this country (which may take longer than expected). Finally, at 4:30 p.m. there is that API Oil Bulletin which might influence tomorrow's Oil trade, but I haven't seen a lot of evidence of that these last few weeks since the report started showing up on the FF calendar.
WEDNESDAY: Asian/London Session: At 1:00 a.m. Japan drops their Core CPI number. Remember back on Sunday night the New Zealand number was listed as Red folder and only shows a handful of pips in terms of price action? Tonight's Japanese CPI number is a Yellow Folder number and going back 3 months has shown us 50, 60 and 25 pips worth of price action right after the number comes out (and the 25 pip night was after the number hit the expected target right on the bullseye...the previous two months missed by a tick or two, thus the bigger price swings). So watch the number itself and if it's another miss, get ready for some fireworks. Canada has a Housing Index number at 8:30 a.m. but this is one of those Canadian numbers that don't perform all that well, so you can pretty safely pass. 10:00 a.m. brings the European Consumer Confidence number, which is also on our pay no mind list, and RBA Governor Bullock speaks at 11:05 a.m. (Australian Fed Speak, so just be aware he's out there if you're trading the AUD this morning). The Flash PMI numbers drop for Australia at 7 p.m. and Japan at 8:30 p.m., and we close the session with the RBA bulletin (report, not number) out of Australia at 9:30 p.m. my time. So none of the evening stuff is likely to help prices move any.
USA Session: Existing Home Sales at 10:00 a.m., and we know from long experience how hard the market ignores housing numbers in the US, and Crude Oil at 10:30 for the oil traders. That's it. USA numbers are really sucking this week.
THURSDAY: Asian/London Session: You probably guessed from the end of the Wednesday session what's in store for today. The Flash numbers (both of them in most cases) make their monthly appearance today. 3:05 a.m. (France); 3:30 a.m. (Germany); 4:00 a.m. (Euro Zone); and 4:30 a.m. (Great Britain). Standing alone, none of these do a whole lot for the EUR or GBP (with the last one) but occasionally they create a small trend you can trade. So watch them in the aggregate and see if you can spot something worth trading. And you can pretty much ignore the red folder nonsense. They just aren't that big a deal. Then at 8:15 the EU releases their latest Interest Rate Decision, with the standard press conference following at 8:45 a.m. They previously announced a pause in their rate cutting, and likely will follow through on that, but if for any reason (Tariffs?) they do make a change in the rate you will most definitely see the EURUSD move in significant amounts. Surprise rate changes are always good for some volatility. Canada releases their Retail Sales numbers at 8:30 and these numbers have a solid history of fluctuating back and forth over the 20 pip line I use to decide if it's worth trading. So keep an eye on it and if you decide to take a trade don't be shy about bailing out if nothing much is happening. The Brits have a Consumer Confidence number at 7:01 p.m. after everyone is asleep, so as noted previously, it can be safely ignored. We close out with the Japanese Tokyo Core CPI number, which measures the inflation rate only in Tokyo. In the last 3 months it has posted a pair of sub-15 pip moves and one that went 60+. So which one will show up tonight? I have no idea, but if you're trading the Yen be aware this one is lurking out there and could end up making things move around a bit. And at 7:50 p.m. we get the Japanese Service Producers Price Index number, which has posted a pair of 20+ pip number-related moves, and one that went 18.5 pips. So given the leaning towards a larger move, this one might be the better of the two to watch and trade.
USA Session: Weekly Unemployment Claims at 8:30 is not the big deal it was 6-12 months ago, but it's the only game in town for the US charts at 8:30, so pay attention. At 9:45 a.m. we get the Flash Services and Manufacturing PMI numbers, and when paired together these two do tend to make prices go zoom, at least for a little while, so definitely worth watching. At 10:00 we have New Home Sales (pass) and at 10:30 we get NatGas. 4 days in a row with little or nothing, but at least what little we get is likely to be worth looking at, at least in terms of the earlier numbers.
FRIDAY: Asian/London Session: FF leads us off at 2:00 a.m. with the GB Retail Sales number, which generates about as much excitement as its US-based counterpart, meaning the last 3 months have posted sub-20 pip price moves. We have to see more than that to get interested, Red Folder or not. At 4:00 the EU posts 3 numbers, none of them noteworthy, but I'll note them anyway: German iFo Business Climate, M3 Money Supply y/y and Private Loans y/y. 3 reports over 3 months equals 9 chances to earn and of those 9 previous chances, only two cracked into the +20 pip range (barely). So it isn't looking good here, but consider this: The week has been a lousy one for trading news-inspired price action, and this is pretty much the last shot the overnight traders have to make any money from their trades. So these numbers, lousy though they may be, could be the spark needed to get the EU traders to fire in some trades and try to make things happen. Probably not, but if you're up at 4 a.m. my time anyway, keep an eye on the numbers and the charts. Maybe. And we close out this snoozefest of a week with the Belgian Business Climate at 9:00 a.m. I'm pretty sure no one cares.
USA Session: Durable Goods at 8:30 a.m. These two numbers have been landing all over the board in terms of their relationship to expectations, and as a result, we have seen a couple of very decent price moves when the number comes in about 10 factors off from what economists had been predicting. So keep an eye on what numbers get posted and be ready to do some real trading on a non-NFP Friday morning for a change.
That's all there is. See you next week.
Jeff
