Hi Folks.
Here is this week's forecast.
SUNDAY: A typical slow start on Sunday, with Fed Speak occurring about 4 hours before the markets open. The odds of him saying anything that carries over to the open later in the day are about nil, so no worries with this one. At 7:00 p.m. the Aussies post their Flash Services and Manufacturing PMI numbers, with Japan posting just the Manufacturing version at 8:30 p.m. The markets show no sort of consistent history of responding with tradeable price action in either event, so this isn't worth trading, but if you are trading after midnight my time, these numbers might give you a hint of what you are in for with the rest of the western world posting their numbers a few hours later.
MONDAY: Asian/London Session: Oddly enough, our first entry is at 3:00 a.m. and it is US Fed Speak as Waller is speaking in Prague at some conference. Nothing is mentioned about audience questions so this one will likely pass by unnoticed. Then the avalanche of PMI numbers begins, starting at 3:15 a.m. (France); 3:30 a.m. (Germany); 4:00 a.m. (Eurozone as a whole); 4:30 a.m. (Great Britain); 9:45 a.m. (USA). What's missing from the calendar is any mention of Canada which usually releases their PMI numbers around 8:30 a.m. So be aware they may drop numbers this morning as well. And the idea as always is watch to see if the numbers come out all or mostly bad or good, and see if a small trend develops (and trade that trend). Nagel from the German Fed speaks at 11:00 a.m. and New Zealand closes the evening session with Credit Card Spending y/y, and I don't see any evidence on previous charts that anyone cares about that number.
USA Session: As noted above, the USA releases their Flash Manufacturing and Services PMI numbers, both at 9:45 a.m., and historically we see at least some decent price action when these numbers are paired together in a release. 10:00 a.m. brings Existing Home Sales and Fed Speak (Bowman), both of which can be safely ignored, and the rest of the day is just more Fed Speak (Goolsbee at 1:10 and Kugler and Williams at 2:30 p.m.)
TUESDAY: Asian/London Session: Japan leads us off with their Core CPI y/y number, which has been an odd duck lately. 3 months ago it posted a stellar 14 pips after release, 2 months ago as a standalone number it posted a very respectable 40+ pips, and last month posted around 50+ pips, but that was in the middle of a significant move up in the USDJPY that began 4 hours earlier. So how much the CPI added to the equation is anyone's guess. Oh, and they were 2 minutes late letting this one hit the wires, so there is that possibility to contend with. Based on 2 months ago, I'd say give this one a shot, but you literally need to be ready for all kinds of things to go wrong (or at least sideways) upon release. At 4:00 a.m. the German ifo Business Climate number drops and the last 2 months have seen 40+ pips of movement as well, so I would give this one some consideration as well. The numbers after are minor, then at 8:30 a.m. the Canadians release all their various CPI numbers and this one has a long and storied history of moving the CAD pairs around significantly. So CAD traders, this is your morning to shine. Belgian Business Climate drops at 9:00 a.m. but no one cares, Gov. Bailey from the British Fed (the BOE) speaks at 10:00 a.m., testifying before the House of Lords, and the rest of the numbers in the evening session can be safely ignored, including the Aussie CPI, listed as a Red Folder report but barely able to generate 10 pips in the 30 minutes after release. Pass.
USA Session: 8:30 starts us off with the Current Account number which hasn't done much price action-wise in a very long time. 2 housing numbers at 9:00 a.m. which get the same review (no price action in a very long time); Fed Speak at 9:15 a.m., no big deal, then more Fed Speak at 10:00 a.m. which is a very big deal as Powell begins his twice a year testilying in front of Congress. This first session tends to be pretty active price wise, so be aware it's out there today. Tomorrow's session is usually just a rehash of today's appearance and does not carry the same weight. So be on alert this morning. We also have the Conference Board Consumer Confidence number, along with the Richmond Manufacturing Index. Neither do a lot from a price action standpoint, but being linked up with Powell at 10:00 a.m. will likely get at least some of the credit for the price spikes we can expect to see right at 10:00. But Powell is the reason for the moves, not these lesser reports. More Fed Speak at 11:50 and the day closes with that API Bulletin that drops after the Oil market has closed for the day.
WEDNESDAY: Asian/London Session: 3 reports for the entire day, and none of them worth mentioning, but since there are only three. I'll mention them. The Swiss drop their UBS Economic Expectations number at 4:00 a.m. 2 of the last three reports generated sub-20 pips in price action. Not a good sign. Pass. British Fed Speak at 4:45 a.m., and the Swiss close out the day at 9:00 a.m. with their SNB Quarterly Bulletin, which is a written report and not an actual tradeable number.
USA Session: As mentioned yesterday, 10:00 a.m. marks the start of Day Two of Powell's twice yearly testilying, and today is just a rehash of yesterday so highly unlikely to generate a lot of price action. Also at 10:00 is New Home Sales, which has failed to move the needle for a very long time. Finally, we get Crude Oil at 10:30 a.m. for you Oil traders.
THURSDAY: Asian/London Session: More stuff than yesterday, but equally worthless from a price action standpoint. Bailey from the BOE (the British Fed) speaks at 7:00 a.m. at some Chamber of Commerce rubber chicken lunch event, but he's smart enough to not say anything controversial that will spin the markets off their axis. At 7:30 p.m. Japan releases their Tokyo CPI number that measures prices just in Tokyo (they're high, trust me) but it is so focused on just that one region, it doesn't have much impact on chart prices.
USA Session: A cavalcade of numbers at 8:30 a.m. starts us off, with Final GDP q/q, Weekly First Time Unemployment Claims (which have been creeping up towards 250k recently) Durable Goods (Core and Overall, and which have missed significantly over the last few months), Final GDP Price Index (a lesser inflation gauge) Goods Trade Imbalance (a number we hope to see start moving towards zero and then maybe even into the black at some point soon) and Preliminary Wholesale Inventories, which is universally ignored. One of those is going to make the market go ZOOM, we just don't know which one. But be ready at 8:29. After that there are a few more numbers but they are just Fed Speak and filler. It's all about 8:30 a.m. today.
FRIDAY: Asian/London Session: French Consumer Spending and Preliminary CPI numbers at 2:45 a.m., but neither do much to price. At 3:00 we get Spanish CPI, which does just about the same to chart prices as the French version from a few minutes ago. Pass. But at 8:30 a.m. Canada releases their GDP m/m number, and like most Canadian numbers, this one has a history of making good things happen on the charts. So wait for the Canadians to ride to the rescue for this session.
USA Session: Core PCE, Personal Spending and Personal Income m/m, all at 8:30 a.m. Typically I would point out that the Core PCE is the Fed's favorite inflation measurement tool, but like almost all the other inflation tools, this one has been flashing "Cut The Rate" for several months now and the Fed continues to ignore it. So we will likely get to a point where the market will begin to ignore it as well, and today may be that day. But it's probably best to assume you'll see at least a small fireworks show once the number drops (no one cares about the other two numbers). Fed Speak at 9:15 a.m., and the Revised UofM Consumer Sentiment and Inflation Expectations numbers at 10:00. Sometimes you'll see a little action off these numbers but that usually happens with the Preliminary numbers, not the Revised, so don't expect a lot from these today. Finally, at 4:30 p.m. after everybody else in the trading world has packed up and gone home for the weekend, we get the Bank Stress Test results, a number so heavily manipulated and modified that any resemblance to the actual number is purely coincidental and likely a huge mistake. But the markets are closed now, so from a price action standpoint it makes zero difference.
See you back here next week.
Jeff
