Hi Folks.
Here is this week's Forecast.
SUNDAY: Another No Surprises Sunday with only two entries (New Zealand's BusinessNZ Services Index at 6:30 p.m., followed by the Rightmove housing Price Index out of Great Britain at 7;01 p.m.) and both have a history of zero impact on charts (plus the GB report drops at midnight:01, so it's double-cursed). Pass on both.
MONDAY: Asian/London Session: The overall malaise that strikes the Sunday evening calendar once again covers the Monday calendar as well. The early numbers (Italian Trade Balance at 4:00 a.m., bookended by British Fed speak at 3:35 and 4:30 a.m.) will do absolutely nothing to any price, anywhere. The G& meets for the first of two scheduled days. They've been meeting for decades and we've been watching them for decades, and nothing they say or do before, during or after the meetings has any impact on chart prices. So no worries there. New Zealand PPI at 6:45 p.m. has posted a stellar 3,2, and 2 pips in the 15 minutes after the previous 3 releases, so no need to waste any time or treasure on that one. Pass. Australian Fed Speak at 7:30, followed by Japanese Preliminary GDP q/q, which has generated 7, 8, and 21 pips over the last 3 quarters. That 21 is an outlier number with the 7 and 8 results much closer to the expected outcome. You can trade it if you like but be ready to bail at +8. Australian Westpac Consumer Sentiment at 8:30 is another zero impact number, meaning Pass, and the Australian Monetary Policy Meeting Minutes might be interesting reading but nothing we can do with them. Pass.
USA Session: NAHB Housing Market Index number at 10:00, followed by that TIC Long Term (Bond) Purchases number at 4:00 p.m. Absolutely nothing here to work with in either case, so Double Pass.
TUESDAY: Asian/London Session: The Japanese numbers at 12:30 can be safely ignored (Revised Industrial Production and Tertiary Industry Activity) but at 2:00 a.m. we get what is likely the most tradeable number of the week (or at least one of them), with the Great Britain Claimant Count Change (think NFP). The last three were worth 33, 21, and 14 pips. That last one is below my 20 Pip Line of Death, but the GBCCC has typically been worth 25-35 pips, so let's pretend we didn't see that last number and assume we have a decent number of pips waiting for us after this one. And yes, there are a couple of other GB numbers dropping at 2:00, and no, we don't care about them. British Fed Speak at 4:10 a.m., along with Day Two of the G7 meetings, Eurozone Trade Balance number at 5:00 is typically a zero impact report, Canada drops their multitude of CPI numbers at 8:30, with 18, 17 and 9 pips the last 3 results. This is one that has been on the decline from a pip standpoint for a while, but previously (like a year ago) was dropping 25 pip results. that was then, this is now, so if you missed the GBCCC earlier, maybe take a chance on this one. Just don't expect a whole lot. That forever "tentative" New Zealand GDT Price Index drops whenever, but since it is listed mid-morning in the US session we can ignore just from the fact NZ is in bed at this point, so if they can't be bothered to wake up and trade it, we shouldn't worry about it either. We close out the session at 8:30 p.m. with the Australian Melbourne Institute Leading Index number. Any number with the word "Index" in it is suspect from the beginning, and this one has a long history of no results worth trading, so don't get out of bed to trade this one either.
USA Session: Pending Home Sales at 10:00 a.m. is another in a long line of Real Estate numbers we can safely ignore. At 4:30 p.m. we get that API Oil Report (Pass) and at 7:00 p.m. we get some Fed Speak to close us out for the evening. A day of nothing but Pass.
WEDNESDAY: Asian/London Session: 2:00 a.m. starts us off with the Great Britain CPI, the only other CPI worth trading aside from the US version. This one has put up 11, 25 and 10 over the last 3 months, so it may be time to reconsider whether the Brit CPI is worth the trouble. Looking at actual numbers, the earlier two hit the target of 3.0% and the last one hit the target of 3.3%, so perhaps the lack of surprising outcomes muted trader interest. Going back to January and December, January missed by a tick and posted 21, which December missed by 3 ticks and posted 60. So keep an eye on the results for this one, and if it misses in any form or fashion, be ready to pounce. The rest of the morning session can be ignored, including the Euro CPI numbers which constantly come out flat and generate little to no price action. The evening numbers are also a bust, Including the Australian Employment Change numbers, which have posted rocking 5, 6, and 5 pip moves in the half hour after dropping the last 3 consecutive months. So once again, the British numbers are the only option to salvage the session.
USA Session: Fed Speak at 9:15 a.m. Crude Oil at 10:30, and the minutes from the last Fed Meeting drop at 2 p.m. Interesting reading and there is some occasional snap-price action at the time of the drop, but rarely anything sustained. These minutes are from Powell's last meeting as Fed Head, so next month's report (where Warsh is now in charge) might be a lot more tradeable because rumor has it he is going to shake things up some and the minutes could reflect that. But we have to wait 6 more weeks to find out.
THURSDAY: Asian/London Session: This morning marks the return of the Flash Manufacturing and Services PMI numbers across the board: France 3:15, Germany 3:30, Eurozone 4:00, Great Britain 4:30 (no mention of Italy or anyone else in the A/L session). Trend = Trade, No Trend = No Trade. The rest of the entire session, morning and evening, are just garbage numbers, including the Japanese Core CPI number, which has posted 11, 14 and 3 pips in the 30 minutes after the last 3 releases. So really, the PMI numbers considered, this is not a session where you should expect to much. If you're looking to take a day off from trading this week, today's session would be a good place to make that happen.
USA Session: We get a handful of numbers at 8:30 to start us off, but none of them are inspiring. Philly Fed Manufacturing Index, Weekly Unemployment, Housing Starts and Building Permits (both of which are late this month). None of them has done anything on their own to make any price action magic, so there is no reason to think today will be any different. After the 8:30 snooze-fest, we get the USA version of the Flash Manufacturing and Services PMI numbers at 9:45 a.m. This set is typically ignored by traders, who very much prefer the ISM versions which will arrive some time later in the month. So don't expect much from this corner either. NatGas at 10:30 and Fed Speak at 12:20 end the session.
FRIDAY: Asian/London Session: We get 4 numbers to open the session at 2:00 a.m.: 2 out of Germany (Final GDP q/q and Gfk Consumer Climate) and two out of Great Britain (Retail Sales and Public Sector Net Borrowing). The German numbers would impact the EUR pairs while the British numbers are aimed at the GBP. Unfortunately the German numbers tend to land in the 10-12 pip move range. The British numbers, specifically the Retail Sales number, has previously done a good job of pumping out 20+ pips after release, but the last 3 numbers landed at 21, 14 and 9. That's moving the wrong direction, so I wouldn't get too excited about the 2 a.m. numbers for any reason. The German ifo Business Climate number never moves prices around for any reason, so a big Pass on that one. FF calendar reminds us there are both ECOFIN and Eurogroup meetings today, so who knows what sort of nefarious deeds they may be up to. It doesn't really matter, we can't trade either of them so let's just move on. Our last entries for this Friday come from Canada at 8:30 a.m., when they drop their own Retail Sales numbers along with a couple of PPI type numbers. For the February and March numbers, all 4 reports dropped on the same day/time, so the 17 and 14 pip moves (not terrible but below my 20 pip line) apply to all. April Retail Sales came in at 6 while the PPI numbers came in at 9. So together or apart, it doesn't matter. None of these are going t make price go zoom. So Pass.
USA Session: Nothing until 10:00 a.m. when the entire morning is covered by 4 items all dropping at the same time. The Conference Board Leading Index number and the Fed Speak can be safely ignored. The other two reports are the Revised UofM numbers, Consumer Sentiment and Inflation Expectations. I've mentioned previously that the Preliminary versions of these numbers has in the past caused a little bit of excitement on the charts, although recently the numbers have once again fallen below 20 pips. The Revised version has done remarkably worse, although the 44 pip move in February might suggest otherwise. But the March and April numbers of 9 and 14 are more in line with what we expect to see. So this looks like yet another Friday where smart traders take the day off and enjoy a 3 day weekend. That's what I plan to do.
See you next week.
Jeff
