Hi Folks.

Welcome to the next edition of what feels like an endless string of Summer Doldrums Econ Forecasts. But anyone who looks will realize this week's edition feeds us into the very end of July and next week we start knocking out August forecasts. So the end of the Doldrums is near. It just doesn't feel like it. Probably because it's still a million degrees in the shade outside right now.  But worry not.  We're just a few short weeks away from ceasing to bitch about how hot it is, and starting to bitch about how cold it is (those of you in the Southern Hemisphere can feel free to swap hot for cold and vice versa).

There is something I haven't pointed out in a while so I'll mention it now, since it may become relevant: Wednesday afternoon at 2 p.m. my time the US Fed holds another Interest Rate meeting. They are not expected to make any changes to the current rate of 3.75%, but just the fact they are meeting means anything can happen (at least that is how the markets treat the event) and because of that uncertainty, we likely will see lower volumes and lower volatility from the open Sunday night through the release of their Decision at 2 on Wednesday. So adding in typical summer trading conditions, don't expect much at the start of the week. There is nothing on calendar likely to generate the kind of interest and attention the Fed will see Wednesday afternoon, so just be careful in setting up trades and don't be afraid to bail out at the first sign of trouble.

As our old friend Stu always said, no one ever went broke taking profit.

Now, on with the show.

SUNDAY: Japan could have done all of us a solid by NOT scheduling their Service Producer Price Index (SPPI) at 7:50 tonight and I could have just typed in "nothing to see here; move along" and been perfectly happy. But, as it turns out, the SPPI churns out on average about 3-7 pip moves in the 15 minutes after release.  So nothing to see here. Move along.

MONDAY:  Asian/London Session: Unfortunately, that SPPI number more or less set the tone for the entire day here. Nothing of even minor significance is on the calendar (Bullock from the Royal Bank of Australia is speechifying at 11 p.m. but that isn't exactly tradeable). So the whole session is a Pass.

          USA Session: And it doesn't get any better in the US Session. All we have is Durable Goods at 8:30 a.m., and while that one actually shoved prices around a bit a year or so ago, the last three numbers have generated 10-14 pips. So another one we can safely ignore.

TUESDAY:  Asian/London Session: On the surface, today's session seems exponentially better than yesterday (not exactly a hard bar to clear). But looks are most definitely deceiving.  The Japanese Bank Core CPI y/y number? We saw 2, 6, and 10 pips after the last three releases.  And the Australian CPI number at 9:30 p.m.? A very similar 11, 5, and 7 pip result. Pasadena. And the rest of the entries aren't worthy of mention.

          USA Session: Today makes up for all those single entry days we've seen over the last couple of weeks. Sort of. At least in terms of quantity.  8:15 brings us the ADP Weekly Employment Change, which the entire market still has on its pay-no-mind list.  A Trade Balance and an Inventories number at 8:30 will come and go without traders even realizing numbers dropped at 8:30. Pass.  A pair of housing numbers at 9:00 will also sneak past everyone as housing is just a bunch of made up numbers, at least according to the (now former) Head of the National Realtor's Board. Pass.  At 10:00 we get both the Conference Board Consumer Confidence number, along with the Richmond Manufacturing Index. That CBCC number has never performed, and while Richmond was once a steady high flyer on the calendar, those days are so far back in the rear view mirror as to be invisible. So Pass on the lot.  We close out with the API Oil Report at 4:30 p.m., and report = not tradeable. Pass.

WEDNESDAY:  Asian/London Session: A whole lot of nothing. I suspect the parties that release this dreck actually time it for days like today when the market plays its own version of Freeze Tag, waiting for the Fed to release their rate decision at 2 p.m. (see below). Just a bunch of easily ignored numbers cluttering up the calendar.

          USA Session: Fed Interest Rate decision at 2 p.m. And even amidst the Summer Doldrums and decisions which were 100% predicted and expected, we still saw 48, 29, and 60 pips in the hour after the 3 previous releases. One of the High Holy Days of trading and if you miss it, well, you miss one of the few shots you have to make some serious coin this summer.  Oh, and we have the weekly Crude Oil number at 10:30.

THURSDAY:  Asian/London Session: This session is mostly comprised of EU member states releasing their GDP and CPI numbers over about a 6 hour period, and typically the market wakes up, yawns, then rolls over and goes back to sleep. Not a bad trade plan for this morning. Britain releases their interest Rate Decision at 7 a.m. (they are expected to stand pat at 3.75% yet again), and the Japanese do the same at "tentative" which lately has meant anywhere from 10:45 to 11:15 p.m. my time. The British Interest rate decision usually generates 20+ pips after release (barely), while the Japanese release only manages from 4-12 pips. It's that "tentative" part that scares most traders off. So a bunch of stuff on Calendar, but only the Interest Rate decisions seem to be worth the effort to track and trade (and yes, that includes the Tokyo Core CPI, which has posted 14, 6, and 3 pips the last 3 months. Pass.)

          USA Session: 8:30 brings us the Advance GDP q/q  number, along with the Core PCE Price Index (and a bunch of lesser numbers not worth mentioning). The GDP number managed to make 13, 25, and 44 pips over the last 3 months, while the PCE knocked out 13, 15, and 24 pips. Combined, you have at least half a chance of seeing 20+ pips, especially if the GDP number comes out much better than expected (or even much worse, for that matter). So keep an eye on the number itself and be ready to jump in if it's a significant miss.  

FRIDAY:  Asian/London Session: One last session for the week where it's mostly EU member states once again flooding the zone with their CPI numbers, which just don't move the EURUSD enough on a consistent basis to make them worth discussing. And this includes the Eurozone Flash CPI number, which has posted up 24, 5, and 14 pips over the last 3 months. Don't be fooled by that 24. The 5 and 14 results are what we've been seeing month in and month out for years. The same goes for the Canadian GDP at 8:30, which has posted 10, 23, and 14 pips over the last 3 reports. This one has been going the wrong way for a while now. Pass. So once again let me mention that today is a good day to close up shop early and have yourself a 3 day weekend, in anticipation of that month off so many of you have scheduled in August. There is nothing wrong with getting a jump start on the rest of the crowd.

          USA Session: 8:30 Employment Cost Index usually doesn't perform well, and on a Friday in the middle of summer I'm guessing nothing will change that makes it worth watching.  Pass.  9:45 brings us the Chicago PMI, which is likely only of interest to people who live and work in Chicago, and lastly, we get the Revised UofM Consumer Sentiment and Inflation Expectations numbers. Of the 2 sets we see each month, the Revised has the least amount of chart impact (16, 16, and 13 over the last 3 months) and today will likely fall in lockstep with the previous results. So much like the A/L session traders, it's a good day to take off, although I expect to see my US based traders back in front of their terminals on Monday. Everyone knows we don't take vacations. Our spouses and kids take them after we die from our overworked, stress-related heart attacks.

So on that cheery thought, I bid you adieu for another week and will see you back here for the start of the Summer Doldrums Stretch Run next week.

Jeff