Hi Folks.

Before we get rolling, a quick word about last week's CPI/PPI numbers and the topic of Inflation and The Fed.

The inflation numbers have been coming in on the very low side for about 3 months now.  Maybe not quite long enough for doctors to declare the patient dead, but certainly long enough for the Fed to shave a quarter or a half point off the current interest rate.

But the Fed is standing pat on the current rate of 4.25-4.50% which is the highest of the 8 rates tracked on the FF calendar page.  President Trump has been calling for a cut for the last 3 FOMC meetings (the same period of time the inflation gauges have been flashing "low") but Powell refuses to budge.  It's a combination of his hatred for President Trump and the Fed's long-standing, sordid and well documented history of acting waaaaaay too late when it comes to dropping (or raising) rates to avoid a recession.

However, now there are many more voices chiming in with President Trump, calling for a cut before the next FOMC meeting on June 17-18.

Here's the deal: it likely won't happen, as Powell will dig in his heels to avoid making any sort of unplanned rate announcement.  However, he's a D.C. Swamp Monster, er, player as much as any of them, and if someone comes up with the right amount of swag to send his way to get him to break with tradition, we could see an unscheduled rate cut in the next 3 weeks.

And if that happens, the market will absolutely lose its mind and God help anyone who is in an open trade when it occurs.

So, since it's unplanned and we have no way of knowing any of the details until after it happens, just be aware for the next few weeks such an event is possible (not probable, but possible) and if you have any inkling that such a move might be happening in your immediate future (like the addition of a Powell Press Conference into the Calendar when it was not there the day before) get the hell out of your trades until the danger passes.  

Nothing ruins an otherwise perfectly good trade than an unannounced rate cut from the world's largest and most influential Central Bank.

Don't you just love trading right now?  LOL

Here is this week's forecast (and no, there are no pressers involving Powell as of Friday afternoon when I am writing this up).

SUNDAY: Several events tonight, but as usual, none of them amounting to anything.  The US makes an unusual appearance with Fed Speak leading off at 5:20 p.m. my time. New Zealand fills in the mid section with  the BusinessNZ Services Index number at 6:30 p.m. and a couple of meaningless PPI numbers at 6:45 p.m., and the UK closes out the evening's festivities with the Rightmove Housing Price Index m/m.  The UK is still allegedly mired in a housing crisis of some sort, but traders can't ignore this Rightmove number fast enough to suit themselves. So several numbers, all likely leading to no tradeable activity.  There are also a boatload of Chinese numbers listed for some reason (FF sometimes lists them and most of the time skips them). So no comment on them as I have no idea if they will impact any charts and if so, which ones.

MONDAY: Asian/London Session: Not much to work with tonight.  Japan has a Tertiary Industry Activity m/m number that does generate 20-30 pips on the USDJPY, although oftentimes with other numbers scheduled at the same time, AND when the numbers posts a miss, which it has done the last 3 months. So maybe it's worth a look. The same goes for the EUR CPI number at 5:00 a.m.  It generates 15-30 pips, even though the number does come in exactly on target most of the time. But I'd trade the EURUSD if I thought I had a legit shot at 30 pips. Schlegel from the Swiss National Bank has a talk set for 12:30 this afternoon, speaking about Swiss Monetary Policy at the University of Lucerne, with audience questions expected.  He isn't on the same level as Powell or the Brit (whose name escapes me at the moment) but he could say something that moves the CHF around some.

          USA Session. The Conference Board Leading Index number drops at 10:00 and if history is our guide, no one will take notice.  After that, it's all Fed Speak at 8:30 a.m., 9:45 a.m. and 1:15 p.m. Like the CB number, no one will take notice.    

TUESDAY: Asian/London Session: The Aussies kick off a very busy Asian/London session with their Red Folder Cash (Interest) Rate decision.  The last 3 meetings resulted in stand pat (14 pips), drop a 1/4 point (9 pips) and stand pat (6 pips). If this is Red Folder activity, I dread seeing the Beige and Yellow numbers.  Pass.  Same for the rest of the early morning stuff, until we get to 8:30 and the Canadian CPI numbers.  This generates some major pips on the USDCAD and other CAD pairs, so pay attention, CAD traders. Today is your day. The rest of the day and evening are just filler numbers.  Today belongs to the CAD and the CPI traders.

          USA Session: Okay guys and gals, prepare yourself. Here it comes.  Fed Speak at 1:00 p.m. and that API Oil Bulletin at 4:30. Neither of which are tradeable.

WEDNESDAY: Asian/London Session: I know I've mentioned in the past that the US CPI is really the big tradable CPI number each month, but the red ribbon goes to the UK, which drops its own CPI numbers at 2:00 a.m.  This one has generated some 30-40 pip moves, and occasionally a move bigger than that if the number misses by much, so this is your chance at the big money for today. The rest of the numbers aren't worth watching, although the Aussies have their Flash Manufacturing and Services PMI numbers coming out at 7:00 p.m.  Not worth trading but they can give us a sneak peek at what might lie in store with all the Euro PMI numbers hitting the wires a few hours later.

          USA Session: Crude Oil at 10:30 as usual.  I'm beginning to think all those DC layoffs have started hitting the departments that generate economic numbers.  Three days in a row with nothing but garbage, and not even much of that.

THURSDAY: Asian/London Session: It's that time of the month again, when we group all the Flash Manufacturing and Services PMI numbers from across Europe into one easy to read paragraph: France @ 3:15 a.m.; Germany @ 3:30 a.m.; EU @ 4:00 a.m.; GB @ 4:30 a.m.. Watch for a trend should most or all the numbers come out good or bad. But individually, none of them really seem to do a lot for the EUR on their own.  Aside from the Flash numbers, there is a bunch of EU and GB Fed Speak scattered about, but that does not seem to have the same price impact as the US Fed Speak, and the US stuff rarely moves the needle any more other than from Powell himself; Canada has their version of the PPI at 8:30 a.m. and that one is usually good for 15-20 pips, so worth the watch. None of the evening stuff looks inspiring, so pass on that.

          USA Session: After what seems like a very long vacation from any sort of tradeable numbers, the US gets back on track today with Weekly Unemployment numbers at 8:30, which are standalone this week so probably not worth a whole lot; the Flash numbers at 9:45...both of them, Manufacturing and Services, so this is a day when we might actually see some price action at 9:45 for a change;  Existing Home Sales at 10:00 (no one cares or pays attention) and NatGas at 10:30 a.m.  Fed Speak at 2:00 p.m., but nothing notable.

FRIDAY: Asian/London Session: At 2:00 a.m. we get the German Final GDP number, which has been the source behind moves of 14, 17 and 10 pips over the last 3 months, so probably not worth the effort, and GBP Retail Sales, which stunk up the joint 3 months ago with a stellar 9 pip move from open to close on the 2:00 a.m. candle, but since then has posted 25 and 15 pips, so maybe it's worth a look. Finally at 8:30 a.m. we get the CAD Retail Sales number, which isn't as stellar a number as other CAD reports, but figure 15 +/- pips after the release, maybe more if it carries over into the 9 o'clock hour. Given the lack of options otherwise, probably worth looking at if you're still trading when NY opens.

          USA Session:  New Home Sales at 10:00 a.m.  That's it in terms of numbers (the Fed has some Financial Stability Report due for release but it is listed as "tentative").  So one lousy housing number for the entire day. If anyone is curious, this is a textbook reason why I take Friday's off from trading.

See you back here next week and remember to pay attention to any late Powell entries in the calendar this week, just in case.

Jeff