Hi Folks.
Here is this week's forecast.
SUNDAY: A pair of do-nothing reports are all we have to start the week. New Zealand's BusinessNZ Services Index (and remember, Index in the name makes it all but an automatic ignore) at 6:30 pm. followed by Great Britain's Rightmove Housing Price Index m/m at 7:01 p.m. my time (midnight:01 local time, making this a double whammy of an Index number dropping while the target country is asleep, another automatic rejection condition). So an easy Pass for both on this hot and humid Sunday evening.
MONDAY: Asian/London Session: Japan starts us off at 12:30 a.m. with their Tertiary Industry Activity number. A long time ago this one wasn't too bad of a mover and occasionally posted 20-25 pips, but the last 3 months gave us 13, 6, and 7 pips, so yet another one safe to ignore. Pass. So it starts off bad and just gets worse for the entire session. Nothing worth mentioning except Nagle from the German Buba speaks at 3 a.m., followed by Lagarde from the ECB at 3:15, both speaking at an event in Frankfurt. There is a smattering of Canadian numbers at 8:15/8:30, but none of them have any history of even double digit pip responses, much less anything over 20 pips that makes them worth trading. The evening session is pretty much a bust as well. I do feel compelled to mention Japan will do a surprise Rate announcement (the surprise being the actual time it shows up...they always do this "tentative" nonsense for both their rate announcement and their press conference that follows). They have remained at .75% rate since December but are projected to raise that rate to 1.00% at this meeting. Their prior 3 meetings (where the rate remained the same at .75%) generated 5, 5, and 6 pips. If they follow through with the rate bump, I would expect them to at least put up 20 pips, if not a whole lot more. But the "tentative" part of all this makes trading the announcement extremely difficult. So the most I can say is if you are trading late Monday night, be aware the announcement and likely rate increase are circling the airport, looking for a place to land. And that could spell either tragedy or ecstasy for any open JPY trades you might be monitoring.
USA Session: When I was a small boy, I used to spend weekends with my grandfather, working around his house. The high point of the weekend would be a trip to the county landfill to get rid of all the yard waste we generated from pruning the trees and shrubs around his home. I loved those trips because I got to see garbage trucks back up to the edge of some pretty large hills, and dump their contents over the side. It always amazed me that these relatively small trucks could dump so much garbage out of their holds. I bring this up because today's US numbers remind me very much of a trip to the dump to watch a bunch of garbage being spilled. Empire State Manufacturing Index at 8:30, followed by Cap Utilization and Industrial Production m/m at 9:15 and the National Association of Home Builders Housing Market Index at 10:00. Just a bunch of landfill-bound refuse on calendar for today, and every bit of it is a solid Pass.
TUESDAY: Asian/London Session: That Japanese Rate Decision from last night before midnight (aka a few minutes ago) always leads to a press conference after midnight, and it too is tentative. So be aware someone could say something that will spin the Yen out of control. But not likely. But at the same time Australia drops their Rate Decision, and they are kind enough to tell us to expect that decision at 12:30 a.m. That's the good news. The bad news is the last 3 decisions have generated a whopping 12, 6, and 20 pips. I can't find a reason why the last decision actually reached my self-imposed 20 pip trade line when the previous two did not. Australia has raised their rates by a quarter point at the 3 previous meetings and in fact are now expected to leave the rate at 4.35%, taking a break from raising rates. Typically changing rates lead to better price action while standing pat leads to a lesser response. So this one is a bit of a head scratcher. Based solely on the results from the last increase, I'd say keep an eye on this one and if you see any sort of aggressive price action get started, then think about taking a trade. But this will be a longshot simply because traders don't pay a lot of attention to Australian and New Zealand rate decisions. As for the rest of the calendar today (morning and evening) it's once again shades of my trip to the landfill with my grandfather. And there is a lot of garbage in the truck today (20 reports total).
USA Session: 8:30 am is Building Permits, Housing Starts, Import Prices and at 4:30 that API Oil Report. So yet another trip to the landfill. Pass.
WEDNESDAY: Asian/London Session: If you've been patiently waiting for something decent to trade news-wise during the A/L session, you patience is now rewarded. At 2:00 a.m. Great Britain releases their CPI number y/y. This one has been a solid performer for the most part, with the last 3 months posting 25, 10, and 31 pips on the GBPUSD. Research failed to turn up why we only saw 10 pips 2 months ago, but that number is a sort of outlier, as the typical response lands in the 25 pip range. So definitely keep this one on your radar. After that, the Eurozone follows suit with their own CPI number, which failed to surprise anyone by posting 10, 11, and 6 pips over the previous 3 months. This is, was, and likely always will be a solid Pass. There are a couple of morning numbers after the Euro disaster, but they are meaningless, and we close out the evening session with our one and only number, the NZD GDP q/q number, which was responsible for 3, 10, and 8 pips the last 3 times it reared its ugly head. So an easy Pass to end the night.
USA Session: Retail Sales (Core and Overall) at 8:30 a.m. starts us off, and FF has wisely downgraded this one to Beige Folder status. 3 months ago we saw 30 pips, but the last 2 months were closer to what we've been seeing for a couple of years, at 10 and 9 pips. So until we start seeing a string of 30 pip results, this one remains on our Pass list. Business Inventories and Pending Home Sales at 10:00 are both universally ignored by traders, and Crude Oil at 10:30 is only of interest to Oil traders, who have been busy little beavers these last 3 months or so, what with the dustup in Iran. Then, at 2:00 p.m., the moment we've all been waiting for: the Fed Funds Rate drops at 2:00 p.m., followed by the obligatory press conference at 2:30. We always see some kind of activity off this one (46, 48, and 29 pip the last 3 months) and this one will be very closely watched as the new guy (Wersh? Warsh? Warch?) takes over and will be handling his first presser as The Man. The rate is expected to remain the same in spite of growing concern about inflation creeping back into the economy due to the Iran War and gas prices that are about 100% higher than they were a year ago. So I do believe fireworks will be the order of the day no matter what happens.
THURSDAY: Asian/London Session: At 2:00 a.m. the Brits come through for us once again with their Claimant Count Change number (think NFP but with tea instead of coffee). The last 3 months gave us 22, 14, and 20 pips, and typically this one lands on the north side of 20, so I won't get too tied up over that 14 result 2 months back. Nagel from the German Buba speaks at 3:00, then the Swiss follow up at 3:30 a.m. with their own Interest Rate decision. Their rate has remained stuck at 0.00% (and no, that is not a mis-type...Zero point Zero Zero Percent) for the last year. Yet they've posted 20, 11, and 20 pips after the last 3 reports. It's an interest rate decision that isn't from Australia/New Zealand. If you are so inclined to trade the CHF, you could find a lot worse places to jump into a trade than after their Rate Decision. So keep an eye on this one. The at 7:00 a.m., fresh off their Claimant number, the Brits drop THIER Interest Rate Decision. They dropped to 3.75% last Christmas and have stayed put ever since. And they are expected to stand pat one more time today. And in spite of the number not moving, the price lines surely have, with this one generating 71, 31, and 22 pips after the last 3 non-decisions. So by all means keep this one on your radar as well. The rest of the session, morning and evening, can be safely ignored, and that includes the Japanese National Core CPI y/y number, which only posed 14, 3, and 7 pips the last 3 times it dropped.
USA Session: After yesterday's Interest Rate Decision, today we get the palate cleanser of Philly Fed Manufacturing and Unemployment Claims at 8:30 (listed as Beige Folder numbers on FF but still Yellow Garbage in reality), the Conference Board Leading Index number at 10:00 (a Hard Pass if I ever saw one), NatGas at 10:30, and the TIC Long Term Purchases number, which shows up at 4:00 p.m. after all reasonable and serious traders have gone for the day. Yet another trip to the dump with Grandpa.
FRIDAY: Asian/London Session: This session is the only game in town today. Unfortunately, it's a trip to a foreign dump with someone else's grandfather. The British Retail Sales number at 2:00 a.m. may have posted 23 pips 3 months ago, but the last two months' results of 9 and 11 pips is a lot closer to what we've been seeing for a while. So that one's a Pass. And the Canadian version at 8:30 is even worse in that they don't have a 23 pip results to crow about. 14, 6, and 7 pips over the last 3 months. Pass, Part II. And the few remaining reports aren't worth mentioning.
USA Session: Closed for Juneteenth, a national holiday commemorating the arrival of the news that slavery was outlawed in the US at the last remaining outpost in Texas. Futures are closed, banks (meaning Forex) are closed, but the Stock Markets will be open half a day, closing at 1 p.m. eastern time.
See you back here next week.
Jeff
