Hi Folks.
Here is this week's forecast.
SUNDAY: No entries for tonight, which makes sense because it's Sunday the 24th here in Florida but it's Monday, May 25th in Japan, New Zealand and Australia, so all three countries are essentially closed for Memorial Day, as is the entire Western World...
MONDAY: Asian/London Session: Except Canada, apparently. Seriously, Canada? You know, you had guys who fought and died in these wars as well. Ok, rant over. At 8:30 a.m., Canada releases its Corporate Profits q/q number, essentially into an empty room as no one of any significance (meaning Account Balance) will be trading this morning. Neither should you. Ignore this one. Then at Midnight:01 local time, Great Britain releases their BRC Shop Price Index y/y. Since technically it's dropping 1 minute into Tuesday, GB gets a free pass for screwing up my plans for this holiday entry, which were to write "it's a holiday" and move on to Tuesday. The GB entry drops while GB is in bed so we can all safely ignore this one as well.
USA Session: It's a Holiday. Move on.
TUESDAY: Asian/London Session: The week finally starts at 1 a.m. my time when Japan drops their CPI y/y. This has long been a sub-20 performer but I went ahead and looked back 3 months anyway, and the numbers starting 3 months ago are 23, 12, and 16. The 23 is enticing but looking back further it's also obviously an outlier as most of the numbers end up in the low teens. So once again only the US and GB CPIs are worth watching. Pass on the rest, including this one. So after this non-event, things go downhill quickly. GBP CBI Realized Sales at 6:00 a.m. has a long history of doing nothing. Pass. At 8:30 we get Canadian Fed Speak (maybe he'll explain why they dropped that Corporate Profits number on Memorial Day). Pass. Japan pops back up at 7:50 with a PPI number that usually lands in the low teens and Ueda from the Bank of Japan speaks at 8:00 p.m. Then we get to a pair of Red Folder numbers, Australian CPI at 9:30 and New Zealand's Interest Rate decision at 11:00 p.m. The Aussie CPI has posted 7, 26, and 12 pips in the hour after release over the last 3 months, and while that 26 is respectable, it's also an outlier number as this one typically lands in single and low double digits. Pass. And it doesn't get any better with the New Zealand Interest Rate Decision, which has failed to impress with 11, 9, and 9 pips in the hour after release over the last 3 decisions. So a lot of impressive sounding numbers make an appearance over 24 hours and not a single one is worth trading.
USA Session: A pair of Housing numbers at 9:00 a.m. (the Housing Price Index and the S&P/CS Composite-20 Housing Price Index y/y) neither of which has any significant impact of price action (meaning Pass) and the Conference Board's Consumer Confidence number, which FF has elevated to a Beige Folder level, but the last three results of 17, 29 (paired with a Red Folder JOLTS Job Openings) and 12 make me wonder if they're on bath salts over at FF. This one has routinely failed to impress as a standalone number, which it is today. So Pass.
WEDNESDAY: Asian/London Session: An odd 4:00 a.m. start with 4 different calendar events from 4 separate jurisdictions, something we really don't see happen that often. But what we do see happen a lot at 4:00 a.m. is that none of them are designed to push price around. Australia Fed Speak, Swiss USB Economic Expectations, the Eurozone's Financial Stability Review and US Fed Speak (yes, at 4:00 a.m...Logan is in Japan at some conference). Maybe the sheer weight of the garbage might move one of the currencies around a bit, but this seems like much ado about nothing to me. Pass. And that's all there is for the morning half of the session. At 9:00 p.m. Australian does a trash dump of useless numbers, so don't get excited by the sheer volume of numbers. They're all zero impact, so Pass. New Zealand's 10:00 p.m. Budget Release isn't even a number in the tradeable sense of the word, and the GB/USA Fed Speak at 10:25 (Lombardelli and Goolsbee, which sounds like a 1970's TV Detective Agency) are both set to speak at that same Japanese conference Logan spoke at about 18 hours earlier. Pass.
USA Session: I already mentioned Logan speaking at that Japanese conference at 4:00 a.m., followed by Goolsbee at 10:25 p.m.. The real events start at 8:15 a.m. with that ADP Weekly Employment Change number the market loves to ignore each week (so it's a Pass for us as well). 10:00 a.m. brings us the Richmond Manufacturing Index, which also fails to impress traders on a regular (monthly) basis. Pass. At 4 p.m. the API drops their Weekly Oil Bulletin, which as a report means we can't do anything with it, and more Fed Speak rounds us out for the day at 3:55 p.m. and 8:00 p.m.
THURSDAY: Asian/London Session: The early session is nothing but reports (not numbers) and Fed Speak, until Canada releases their Current Account number at 8:30 a.m. But since all this one has managed in the 30 minutes after release over the last 3 months is 12, 6, and 16 pips, it too is a solid Pass. The Canadian Financial System review at 10:00, followed by the press conference at 11:00, offers a bit of hope (the press conference at 11, not the Review at 10). You never know when someone will say something they shouldn't at one of these and cause all sorts of CAD-related chaos. So maybe pay attention at 11 and see if something develops that's worth trading. Absolutely nothing in the evening half of the session looks like it will make any kind of tradeable noise on the charts, so skip this one entirely.
USA Session: We finally get rewarded for sitting through 3 days of nothingburgers in terms of news. We get both the Core PCE Price Index (the Fed's alleged favorite Financial/Inflation Measurement tool, or at least it was before Warsh got the Fed Head job...we'll see what kind of clues we get going forward if this one stays on the Nice list or gets demoted to Naughty) AND the Preliminary GDP q/q along with the GDP Price Index (another Inflation tool). There are also a bunch of other numbers dropping at 8:30. Just focus on PCE and GDP. That will either make prices go zoom, or absolutely nothing will happen and you can safely move on to the 10:00 a.m. New Home Sales number, which has been an automatic Pass for as far back as I can recall. NatGas at 10:30, Crude Oil at 12:00 (thanks to the Monday holiday) and Fed Speak at 8:55 and 10:15 round out our day.
FRIDAY: Asian/London Session: Japan drops a pair of numbers at 1:00 a.m. but they traditionally have zero impact, so Pass. Then we get an absolute parade of EU Member Country numbers that all sound impressive but fail to move the EUR even 10 pips when they drop, and usually a lot less. So pass on the lot of them that start dropping at 2:00 a.m. and don't stop until we get to Canada's GDP m/m at 8:30 a.m. There was a time not that long ago when you saw CAD and a Red Folder and it was an automatic trade. Not so much any more. This one is a good example of that. The last 3 numbers posted were 26, 10, and 10. Maybe today the CAD bounces back with a solid 20+ response to some good (or bad) news. It's worth watching, but don't get your hopes up too much. The trend on almost all the CAD numbers has been down lately.
USA Session: 5 entries for today's calendar and not a single one is really worth mentioning, but I'll mention them anyway. 8:30 brings us Goods Trade Balance and Preliminary Wholesale Inventories. Nobody trades either of those so Pass. Fed Speak at 9:10 and 9:15 (Pass and Pass) followed by Chicago PMI at 9:45 (also an automatic Pass). I told you they weren't worth mentioning.
And that's it for the week. See you back here next week when we enter the early stages of the Summer Doldrums, and news, or a lack thereof, usually plays a big part in that. So see you then.
Jeff
