Hi Folks.
A quick note before we get started. An hour ago I sent an email out about a coaching program I'm starting that has 10 open slots. 5 are already sold. If you are interested, or maybe this is the first you are hearing about it, get over to https://simplicators.com/coachingoffer as soon as you can, because at this rate all 10 slots will be filled sometime this evening.
Here is this week's forecast.
SUNDAY: Jerome Powell, leader of the US Federal Reserve Bank, gives the commencement speech at Princeton University starting at 2:40 p.m. today, a full 2 hours and 20 minutes before the market opens. And that's all there is. So I could (and should) have shortcut this entry by saying "Nothing happens today."
MONDAY: Asian/London Session: Nothing much worth mentioning here. GB Banks are closed for a Spring Bank Holiday, whatever that is. Nagel from the German Buba speaks at 9:30 and Lagarde from the ECB speaks at 10:30, so not much anyone can do with those. The Brits have a BRC Shop Price Index number dropping at 7:01 p.m. my time (midnight UK time) so no need to get excited about that one (the rule is that any number that comes out while the country behind the number is asleep can be safely ignored). Finally, Japan has a Services Producer Price Index number releasing at 7:50 p.m., and this one actually posts up some fairly decent sized candles before and after the number drops (like 19, 21 and 31 pips over the last 3 months). As I've mentioned before, if I can have a reasonable shot at 20+ pips off a number, I think it's worth taking. That would be the case here.
USA Session: Closed for Memorial Day.
TUESDAY: Asian/London Session: We start with the Bank of Japan Core CPI y/y number, which has generated 20, 20 and 40 pips over the last 3 months, so this one is definitely worth a look. Of the remaining morning session numbers and events, maybe the French CPI number at 2:45 a.m. Normally this one struggles to post double digit pip moves in the hour after release but last month the number came in a tick higher than expected and the EURUSD moved almost 40 pips in the hour after release. So watch the number and if it comes out higher than expected, it might be worth the risk. There is some various Euro based Fed Speak at 4:00 a.m., 12:00 noon, 12:20 p.m. and 10:10 p.m. In the evening session the Australian CPI is on tap for 9:30 p.m., but this one has failed to post even as much as 10 pips after the release. So don't bother. Finally, New Zealand is on tap to cut their interest rate by another quarter point from 3.50% to 3.25%. The last three times they made a decision they cut by either a quarter or a half point and failed to see as much as 20 pips movement in the hour after the decision. An Interest Rate Decision should generate more than your average PMI number but it doesn't in this case. So take the risk if you want but personally I'd pass.
USA Session: Quantity trumps quality today as we have a lot of calendar entries but none of them are blowing wind up my skirt. We start with Fed Speak at 4:00 a.m., which I thought was a misprint, but it's Kashkari speaking at an event in Tokyo. Durable Goods drops at 8:30 and traders will be waiting to ambush the market if the number comes out 7 full percentage points higher than anticipated, like it did last month. I doubt we'll see anything of the sort as the propeller heads rarely make the same sort of mistake two months in a row. A couple of Housing numbers at 9:00 a.m. (pass) and the Conference Board Consumer Confidence number at 10:00 (also a pass), and Williams from the Fed closes us out at 8:00 p.m. with some more Fed Speak at that same event in Tokyo as Kashkari, just a day later.
WEDNESDAY: Asian/London Session: Nothing but hot garbage both morning and evening today. If you find something worth trading, don't expect any help coming from the news today.
USA Session: Kashkari is back at 4:00 a.m. two days in a row, this time speaking at a different event in Tokyo. Fed Speak = Pass. Richmond Manufacturing Index at 10:00 (this one will be big again at some point in the coming months, but not this month) and the Fed Meeting Minutes at 2:00 p.m. Worth reading but tough to trade. Finally that weekly API Oil Report at 4:30 after everything has closed down for the day.
THURSDAY: Asian/London Session: We start at 1:00 a.m. with Japanese Consumer Confidence. This has not historically been a real barn burner in terms of price activity...however, over the last 3 months Japanese Consumer Confidence has been plummeting and as a result this number has come out at a time when the 1H candle posts a 45-60 pip move. So definitely take a look at this one on the USDJPY and pay close attention to the number...if it comes out worse than expected you could be in a position to notch some very nice gains. That's really it aside from Canada's Current Account number at 8:30 a.m. 3 numbers back the USDCAD pip gain barely cracked 10 pips, and the last number posted 80 over the 30 minutes after release. But the other US numbers that came out last time were likely behind that big move. So maybe, but don't count on it. And FYI, Swiss, French and German banks are all closed for Ascension, so volume will be down some today. Bailey from the Brit Fed speaks at 3:00 p.m., but with the UK closed for business by then the impact will be minimal. The rest of the evening is mostly junk, including the mass of JPY reports starting at 7:30 p.m. It's possible the sheer number of numbers might move the JPY around some, but your better bet will be the 1:00 a.m. Consumer Confidence number from earlier in the session.
USA Session: 8:30 a.m. brings us the Preliminary GDP number, along with Weekly Unemployment, the Preliminary GDP Price Index (a lesser Inflation gauge) and Barkin from the Fed speaking at a Fireside Chat. It all looks impressive in writing, but the GDP number is just an adjusted number (maybe) from the Advance GDP number that came out a few days back, so no surprises are expected here. Unless Unemployment posts a crazy deviation from expectations, that one likely won't do much. The Inflation gauge will likely show inflation is still low and dropping, and even if it comes out a bit worse than expected it still isn't looked upon as a big deal compared to about a half dozen other numbers the Fed watches. And Barkin? Fed Speak. What can you do. But a couple of red folder numbers to start at 8:30 so the market may feel compelled to move things around a bit simply because of the status of the numbers, if not the content. But things drop off dramatically after that. Pending Home Sales at 10:00 (no one cares); NatGas at 10:30 (only of interest to NatGas traders), Crude Oil at 11:00 because of the Monday holiday (and only of interest to Crude traders) and more Fed Speak at 10:40 a.m., 2:00 p.m., and 4:00 p.m.
FRIDAY: Asian/London Session: For all the calendar entries today, not much worth watching. A variety of CPI numbers come out in Europe (Germany, Spain, Italy). FF Red Folders the German version, but it comes out piecemeal as each of the 6 different reporting states releases their own number whenever it suits them. The other two (Spain and Italy) haven't moved price around off their previous releases, so no reason to think today will be any different. Canada, however, releases their GDP m/m number, and that one has posted some smaller number 2-3 months back but last month posted a 25 pip move off a number that missed to the downside by .2%. So watch the number and be ready to trade any misses.
USA Session: 8:30 brings us a bunch of filler numbers (Goods Trade Balance, Personal Income/Spending, Preliminary Wholesale Inventories) and one big one: Core PCE Price Index m/m. Core PCE is the #1 Inflation Number the Fed uses to guide their decision-making in terms of rate hikes/reductions. 3 months ago the number came in on target and barely registered a 10 pip move on the EURUSD. 2 months back it missed to the upside by a tick and posted a 27 pip gain and last month missed to the downside, coming in a 0.0% (meaning no inflation measured in the previous 30 days) and also posted a 25 pip move. So this one seems to be very specific in terms of how the number comes out when it comes to expected moves. If they hit the bullseye you may not see any price action. But if it misses to either side, you could be looking at 25 easy pips. So pay attention. After these numbers, we get the Chicago PMI at 9:45 a.m., which usually passes by unnoticed by the market, and the UofM Revised Consumer Sentiment and Inflation Expectations numbers. Both of these numbers are a joke. They call up 800 people and ask them what they think the inflation number will be in a year, and how they feel about the current economy. Prices are dropping nationwide and have been for a couple of months now but the Consumer Sentiment number keeps getting worse, and that whole "look into your crystal ball and tell me what you see" works great at carnivals, but for making trading decisions, not so much. A couple of Fed clowns speak later in the day/evening, and that brings us to the close of another week.
See you back here next week.
Jeff
