Hi Folks.
Here is this week's forecast, which starts out slow but picks up some serious steam as the week progresses.
SUNDAY: Zip. Nada. Zilch. Not even those Chinese numbers I always ignore.
MONDAY: Asian/London Session: Buckle up, Buttercup, because here we go. 6:00 a.m. in Great Britain, CBI Realized Sales. Last month the 1H chart spanned 22 pips after this one was released (no other reports on the calendar) but the previous 2 months showed only 12 pips. If there is any price movement it's likely linked to some outside factor and not this number. But it's also the only number on the calendar for the morning A/L session. So if you absolutely have to trade, maybe this one can string two decent months in a row together. But no matter how poorly it does, it has to do better than the 7:01 p.m. BRC Shop Price Index y/y, which is barely able to move 10 pips in the hour after the number drops, which, by the way, is at midnight local time (12:01 a.m. to be exact) and thus as a number that drops when the target country is fast asleep, it can be safely ignored.
USA Session: Zip. Nada. Zilch. Just like Sunday night. And the source of my stupid "Buckle up, Buttercup" joke.
TUESDAY: Asian/London Session: The morning session is composed of two numbers, sets of numbers, to be accurate, and none of them are going to do anything by way of price action. At 3:00 a.m. the Spanish Flash GDP q/q is released, and when paired with the Spanish CPI, is known to generate 25 pip moves over the next hour. When released alone it's lucky to break 10 pip. Today it is released alone. So expect another untradeable 10 pip move. At 4:30 a.m. the Brits drop the M4 Money Supply, Mortgage Approvals and Net Lending to Individuals numbers as a group (as they do each month) and the last 3 months saw 10, 9 and 8 pips of movement in the 30 minutes after release. Simply not worth the effort. In the evening session, at 9:00 p.m. New Zealand drops the ANZ Business Confidence number and it's a Yellow Folder number for a reason. Pass. At 9:30 Australia releases a basket of CPI numbers, and over the last 3 months those CPI numbers have moved the AUD 5, 8 and 5 pips. I shouldn't have to say it but I will. Pass.
USA Session: Mostly just "stuff" today. At 8:30 we have Goods Trade Balance and Preliminary Wholesale Inventories, neither of which have any history of chart impact. At 9:00 we get a pair of Housing Price Index numbers, which, like the 8:30 a.m. numbers, have zero history of making any sort of tradeable impact on the charts. At 10:00 we get JOLTS Job Openings and the Conference Board Consumer Confidence number. When JOLTS is paired up with the ISM Manufacturing PMI number, it is known to make some noise. But standing alone, or worse yet, paired with one of the most ignored numbers on the calendar (the CB Consumer Confidence) there isn't much reason to expect any sort of sustained price action post number drop. However, this is the first "real" number we've seen in the US session this week so it could hit above its average for a change. But given what's on tap tomorrow at 2:00 p.m., I have serious doubts. Proceed with caution. We close out the US session with the API Weekly Oil Report, which isn't tradeable given the time of the release.
WEDNESDAY: Asian/London Session: Buckle up, Buttercup, and I really mean it this time. The next 24 hours of news related trading could be the best we've seen all summer (and that is not exactly a high bar to clear). Unfortunately we need to wade through a bunch of lesser numbers from a variety of Euro Union members (GDP numbers that sound like they might be good but rarely are linked to more than an 8-10 pip run). The Spanish CPI at 3:00 a.m. has been hovering back and forth over the 20 pip line I use to decide trade/no trade, so that one could be worth looking at. At 9:45 a.m. Canada rides to the rescue with their Interest Rate Decision (expectations are the rate will remain at 2.75%). Guaranteed to move the USDCAD around enough to be worth trading. Press conference follows at 10:30. A few things in the evening likely to be worth watching. Japanese Retail Sales at 7:50. 1 and 3 months ago the number was flat but two months back this, along with a lesser number, propelled the USDJPY up almost 70 pips. The number was better than expected by almost half a percent so that likely had a lot to do with it. But since we know it has the ability to move around a lot, it's worth at least watching. FF lists the Australian Retail Sales number as a Beige Folder report, meaning moderately important, but they must be buying the premium bath salts at FF because this one is good at best for about a 13-14 pip move, and usually shows about half that amount. So pass. The rest of the night is labeled "tentative" meaning no specific times were given and usually that means the number is trash and can be ignored. But tonight, amongst the Tentatives, is the Japanese Interest Rate Decision, with a press conference "tentatively" set for tomorrow's forecast. We can't trade the release itself but these can spur on price moves lasting hours and heading in only one direction. And from a darker perspective, they can sabotage an otherwise perfectly good trade you're in when the surprise hits the airways. So be aware, and if it looks like the USDJPY is headed straight up or down, don't be shy about jumping in and grabbing a few pips.
USA Session: Just about as busy a session as the A/L. We start at 8:15 with the ADP Non-Farm payroll, which likely won't move prices around but will at least give us something to think about as Friday approaches (and the REAL NFP drops). 8:30 is the Advance GDP and Advance GDP price Index, and this one does move prices around, particularly if the number misses the expectation even by a little bit (which in this case is 2.4% for the GDP, and 2.3% for the Price Index). At 10:00 we have New Home Sales (no one cares) and 10:30 is Crude Oil (Oil traders care). Then at 2:00 p.m. we have what will likely render all the earlier forecast moot as the Fed is set to release the latest iteration of the Fed Funds Rate (our Interest Rate). The markets generally freeze in place on Fed Day, and that could still happen here in spite of the Advance GDP being a decent catalyst for price action. Powell still has the job and Powell still refuses to go along with a rate cut, but he is only one vote and there may be enough of the rest of the Board on board to see a quarter point drop. But I wouldn't count on it. The scheduled press conference at 2:30 might be a further catalyst for additional price action beyond whatever knee-jerk move we get when the announcement is made, as Powell does tend to telegraph his intentions for the immediate future at these pressers, so don't shut down and go away if prices seem dead at 2:15. Let the Q&A session that starts at 2:30 take a shot at getting you some pips/points before the end of the day.
THURSDAY: Asian/London Session: We start where we left off last night: with Japan having a "tentatively" scheduled press conference after midnight at some point. Much like the Fed presser from earlier in the day, it can on occasion spark some price movement, but you never really know when and where, so just know it's out there. At 1:00 a.m. there are two additional Japanese reports (Consumer Confidence and Housing Starts) but those are not known for having any impact. The rest of the Euro based news is all Yellow Folder (meaning least important/least impactful) and for a good reason. But at 8:30 a.m. we get the Canadian GDP m/m, and for the last three months we've seen price action ranging from 15-25 pips. Previous to that 20-30 pip moves were the norm. So even though the last couple of months have tapered off, it might still be a good idea to keep an eye on this one. The evening reports are all Yellow Folder junk and can be ignored.
USA Session: We start a little early with the Challenger Job Cuts at 7:30 a.m. I've watched this one for a while and I'll never get that time back. Pass. 8:30 brings Weekly Unemployment, Personal Income, Personal Spending, and the Core PCE Price Index m/m. Unemployment to the side (it isn't having the effect it had a year ago) the Core PCE is allegedly the Fed's favorite inflation gauge, although it's been flashing really low for a while and they've kept the rates artificially high for 6 months now, so how important it really is to them is seriously up for debate. But if it comes out a tick higher or lower than expected, it can and will cause prices to move more in 30 minutes than we will likely see all the rest of the day. 9:45 is Chicago PMI (no one cares) and 10:30 is NatGas (NatGas traders care). And that wraps the day.
FRIDAY: Asian/London Session: Early numbers include a British Housing number and Australian Commodity Prices and neither has any significant history of being worth trading. Then we get systematic release of all the Final Manufacturing PMI numbers from across Europe and the UK, and FF has now downgraded these numbers to Yellow Folder, either because they have proven over many months to do nothing at all in terms of creating price action, or they got their new shipment of bath salts in and wasted no time in sampling their wares. Going from Red to Yellow is a big downgrade, and I honestly expect to see them back at Red next month. But the same rules apply as always: if you're up and trading the London session, watch the numbers as they come out (Spain 3:15 a.m.; Italy 3:45 a.m.; France 3:50 a.m.; Germany 3:55 a.m.; Euro Zone 4:00 a.m.; UK 4:30 a.m.; Canada 9:30 a.m.) and look for any trend to develop. Trade in the direction of the trend. The EUR also has a pair of CPI numbers dropping at 5:00 a.m., but only 1 out of the last 3 numbers cracked 20 pips of movement, and going further back all you see are tiny price moves. So this one looks like a safe pass as well.
USA Session: Non-Farm Payroll and related numbers at 8:30 and this will pretty much set the tone for the rest of the morning. It has been consistently coming in much better than the ADP on Wednesdays and there is no reason to think right now that this will change any this month. So expect a good number and expect the markets to react, so be ready to make at least a little something off this one. 9:45 is Final Manufacturing PMI which is universally ignored, and at 10:00 we get the ISM Manufacturing PMI and PMI Price Index, along with some other unrelated numbers (UofM nonsense and Construction Spending). This is an odd NFP Friday in that we actually get some decent numbers dropping 90 minutes after the NFP which could keep the party going much longer than usual. Finally, we have that Wards Total Vehicle Sales floater which could come out at any time but likely will be late afternoon. And it's never moved prices around the few times I've gone back to look, so no need to stick around waiting for it.
Have a great weekend and I'll see you back here next week.
Jeff
