Hi Folks.
Here is this week's forecast:
SUNDAY: OPEC leads us off with some meetings that apparently happen before the market opens, which equals Pass, and Japan has a group of numbers, one of which is their GDP q/q, but the last 3 quarters produced 12-16 pips, so this too is a Pass.
MONDAY: Asian/London Session: Absolutely nothing worth watching in either half of the A/L session. Just one big giant PASS.
USA Session: Absolutely nothing to watch in the US session. Not a single calendar entry to even Pass upon.
TUESDAY: Asian/London Session: Groundhog Day. Another lineup of numbers designed to fill some slots and mark some time until we get to a real number tomorrow.
USA Session: In a slightly positive turn of event, we at least have some numbers scheduled for today. They are all dumpster fire fuel, but at least we have something to complain about. And the complaint is these too are just filler numbers while we wait for the good stuff starting tomorrow.
WEDNESDAY: Asian/London Session: When I mentioned having "good stuff" on calendar for today, I wasn't referring to the A/L session. For the third day in a row the calendar entries are all time wasters, EXCEPT for the Canadian Interest Rate Decision from the BOC at 9:45 a.m. This will be the 5th consecutive meeting where the BOC is expected to leave the rate at 2.25%. The previous 4 meetings where they decided against moving off 2.25% produced moves of 24, 20, 15 and 18 pips. Once a Central Bank ends up wedded to a specific rate and shows no signs of moving to another number (higher or lower) traders begin to abandon the number as there is no mystery involved, thus less of a chance of seeing any sort of decent price action. And that's the case here, although the last 2 numbers were only slightly below 20. Given the lack of any other numbers so far this week, I think it's probably worth a shot to trade this one. The odds of any number other than 2.25% coming up are about nil, but at least traders can justify their trades simply because it's an interest rate decision. And the presser at 10:30 a.m. could create a little action of its own as well.
USA Session: We start with one of the Big Kahunas: CPI in all it's glorious iterations (4 in total). We keep hearing anecdotal evidence of rising prices, but aside from gasoline (thanks, Iran war) everything else seemed to be holding the line overall, until last month, which came in a little hot. And they are expecting more of the same tomorrow, with projections being a tenth of a percentage point higher than last month. Any higher than that ( definitely possible) or lower (much less likely) and we should see some sustained price action. So be ready. The rest of the day (Crude Oil @ 10:30, 10 year Bond Auction @ 1:01 p.m., and the Federal Budget Balance (and other assorted fairy tales) @ 3:00 p.m.) can be safely ignored.
THURSDAY: Asian/London Session: The only thing noteworthy for the entire session is the Eurozone Interest Rate Decision at 8:15 a.m., with a presser to follow at 8:45 a.m. The current rate of 2:15% was dropped into place in on June 5th 2025 and has remained there ever since. But today the expectation is the ECB will bump the rate back up to 2.40%. If they do, there will be fireworks, but if they don't there will really be fireworks. So either way expect this one to push the EUR pairs around noticeably for a while after the decision is released. And once again the entirety of the remaining calendar can be safely ignored.
USA Session: Since yesterday was CPI, today must be PPI, and it is, at 8:30 a.m. CPI steals all the thunder, so the PPI has less impact on chart prices, but we should still see a little something at 8:30 and again at 9:30 a.m. And we'd better because the NatGas number at 10:30 and the 30 year bond auction at 1:01 p.m., which makes up the rest of today's calendar, won't be making anything happen.
FRIDAY: Asian/London Session: There is a single red folder number on tap today, which is the Great Britain GDP m/m number. Some time back this was a solid 25-30 pip performer, but the last 3 numbers have been 19, 17, and 16 pips. Those numbers are going the wrong way, and I wish I could say there are any reasons to expect price action to flip and start knocking out 25 pip moves today, but there isn't as far as I can see. If you are up at 2:00 a.m. my time and feel like taking a chance, there are worse numbers than this one to take a flyer on. But if price seems to stall out around 16-17 pips, take the money and run. The rest of the calendar is exactly like the rest of the calendar all week: absolutely nothing else worth discussing.
USA Session: The only entry for today are those Preliminary UofM Inflation Expectation and Consumer Sentiment numbers. And once again, some months back we saw some decent 20+ pip price moves off the Prelim numbers. But lately the market has lost interest in this package, and has generated 30, 18, and 12 pips. Before you get excited about the 30, in March the UofM numbers were paired with the JOLTS Job Openings which came in much better than expected and was likely the source of most of that move. The last 2 months UofM got no outside help and posted descending numbers. The ONLY good thing going for it is there is nothing else to trade during the US session, so traders have the option of trading the Prelim UofM numbers or trading nothing. That can lead to overperformance, so maybe keep an eye on this one if you decide to stick around and trade on Friday. Just don't expect a 10 bagger trade.
See you back here next week.
Jeff
