Hi Folks.
Here is this week's forecast, which also marks the start of a sort of countdown to Holiday Trading conditions, due to hit like a wet pillow in about 3 weeks (just before the American Thanksgiving Holiday) and carrying over until just after the New Year. Nothing to worry about right now; just take advantage of all the "normal" trading we're seeing because it will likely disappear for a few weeks, right about the time a lot of us start shopping for the holiday turkey (not me though...I make BLAT's for my meal (bacon, lettuce, avocado and tomato sandwiches).
Anyway, on with the show.
SUNDAY: FF thought it was important to remind us, so I'll mention it as well. Last night the US and Canada moved their clocks back an hour and are now on Standard Time with the rest of the world. So if you were using some kind of reminder to adjust your trading by an hour to accommodate the one hour difference between US and the Rest of The World, rest easy. It's all back to normal for a few more months. The rest of the calendar is just filler numbers that won't do a thing to move price around. So Pass on the lot of them.
MONDAY: Asian/London Session: Nearly all of the morning session is the list of Final Manufacturing PMI numbers by country, which we know from constantly dealing with them that they rarely generate more than 20 pips over a 2-3 hour period, making them simply not worth trading. The remaining non-Manufacturing PMI numbers aren't worth the paper they're no longer printed on and can be safely ignored as well. The evening session isn't all that either, except for the Australian Interest Rate Decision at 10:30 p.m. The last 3 pip counts were 11, 22, and 22 pips, the 22's being the two most recent results. I've said it before and I'm sure I'll say it again: 2 out of 3 ain't bad. Nobody's getting rich off these numbers, but it's still a +20 result and that's all we really ask for around here. Take a shot.
USA Session: That generic Final Manufacturing PMI number at 9:45 is the one no one trades, instead waiting for 10:00 a.m. and the ISM Manufacturing PMI, which, unfortunately, not enough of you trade to make price move enough to be worth trading any longer. Once a solid Red Folder and particularly feisty when paired with the JOLTS Job Openings or some other Red Folder number, lately this one is doing good if it touches 15 pips (the last 3 numbers were 13, 9, and 12 pips). That puts this one right smack dab in the middle of our Pay No Mind list until further notice. The other two numbers dropping at 10:00 are even worse, so Pass on the lot. There is that "tentative" Loan Officer Survey which has been polluting the calendar for as far back as I can remember. It's always been "tentative" and I don't think I've ever seen any actual numbers come out from it. So Pass
TUESDAY: Asian/London Session: We open up with the Swiss CPI m/m, and while now a Beige Folder on FF, it's still not the US or GB CPI, and while the last three numbers mostly confirm that (25, 6, and 13 pips) the one outlier in that group (25 pips) happened when their CPI posted a -.1% for the first time in 10 months. It's not a normal event for the Swiss and traders co-signed that statement. So watch the actual number and if it comes out negative again this morning, maybe look for the trade. It's the only way I would even consider it. After the Swiss CPI we get trash for the entire session until we get to 4:45 p.m. and the New Zealand Employment Change numbers. The last 3 were 20, 2, and 1 pip. Normally an automatic Pass, I felt it was worth it to look at that 20, given that the next two numbers combined equaled 3. As it turns out, back in February when that number dropped the expectation was a .3% uptick in employment, but the actual number came in at .5%, while overall unemployment and labor costs came in higher than expected. This was behind the 20 pip drop in the NZD/USD. The punchline is, the August numbers did almost the exact same thing and only generated 1 pip in the 15 minutes after release. So the moral of the story is, don't trade the New Zealand Employment Change number. The risk is much too high, considering the potential reward that awaits (1 pip).
USA Session: Kind of a late start to the US session at 10:00 a.m. with the JOLTS Job Openings number, along with Factory Orders (which I can promise you, no one cares or will be trading that one). JOLTS used to be a Red Folder and part of the rocket fuel that created +20 runs when paired with the ISM Manufacturing number. Those days are long gone and this one is reduced to results like 12, 14, and 8 pips. Pasadena. The rest of the session is that RCM/TIPP Economic Optimism report listed as "tentative", so an automatic Pass. The Omdia Total Vehicle Sales number is listed as "All Day" which is just another way to say "tentative" so Pass here as well. The API Oil Report at 4:30 closes us out for new, but today is election Day in the US and later in the evening as the polls close, we could see some results-related price action, particularly on Gold and possibly Oil, so if you are planning to trade either of those keep an eye on the results as they come in because they can and sometimes do influence how traders think and trade.
WEDNESDAY: Asian/London Session: The morning session is almost entirely those Final Service PMI numbers out of the various EU-member countries. Just like the Manufacturing version, these are hard pressed to generate 20 pips over 2-3 hours after the releases begin, so Pass. And definitely Pass on the Eurozone CPI number. This one is a solid 12-14 pip performer and has been for a few years now. I doubt that will change at all today. Canadian Trade Balance at 8:30 a.m. is a 10 pip mover at best, and the evening numbers are dumpster fire fuel.
USA Session: At 8:15 we get the ADP Monthly Non Farm Employment Change number, which differs from the weekly number ADP releases in that traders only ignore this one once a month, and not weekly like they ignore the other one. The US Trade Balance number also drops at 8:30 alongside its Canadian counterpart, and since they drop at the same time each month, a quick look at the USDCAD shows results of 11, 16, and 14 pips. Not the worst numbers we've seen this week (remember New Zealand's version of the NFP ginned up a whole 1 pip last time it dropped) it's still far enough below 20 pips I would Pass in favor of better trades elsewhere. We close out with the generic Service PMI at 9:45, ISM Services PMI at 10:00 (Beige Folder Report with Yellow Folder results) and Crude Oil at 10:30.
THURSDAY: Asian/London Session: Another day where FF decided to blow out the calendar with a bunch of EU-member state numbers no one follows and no one definitely trades, and that takes us up to 7:00 a.m. when Great Britain releases their Interest Rate Decision. Prediction markets have the chance of a rate hike from 3.75% to 4.00% set at 87%, which is a pretty strong vote in favor of a hike. Either way (hike or stand pat) based on the 28, 28, and 55 pip results from the last 3 decisions, all standing pat at 3.75%, we are going to see prices with a case of the zoomies about a nanosecond after this one gets released. So be ready, GBP traders. Bailey does the obligatory press conference at 7:30, with Schlegel from the Swiss national Bank chattering at 7:40 a.m., followed by our old friend Nagel from the German Buba at 12:45 and Lagarde from the EU Central bank at 1:00 p.m. The evening numbers (both of them) can be safely ignored.
USA Session: I think I made the "Weakly" joke about the 8:30 a.m. Unemployment numbers last week, so I'll refrain here. But they are a joke and don't generate anywhere near enough pips to justify the risk of trading them. The 9:00 "Preliminary" Non Farm Productivity and Labor Costs don't have any real history f moving prices around, so Pass here as well. Fed Speak at 8:50 and 9:10, followed by NatGas at 10:30 brings us to the end of another lackluster trading day from a news perspective.
FRIDAY: Asian/London Session: Once again a session filled with garbage numbers, except, of course, for the Canadian NFP at 8:30 (which coincides with the US NFP this month...more on that below). Trade it. The Ivey PMI, also out of Canada, drops at 10:00 a.m. and won't generate anywhere near what the joint NFP will give you. So trade the NFP and call it a day.
USA Session: 8:30 a.m. Non-Farm Payroll. Last three numbers generated 53, 41, and 31 pips on he EUR/USD. On the USD/CAD we saw 60, 80, and 65 (the 65 was on Oct. 9th, a week after the US NFP dropped, so even as a standalone it's a good chart to trade). No law says you have to pick one. Trade both if you're up to it. After the NFP we bring things down. All the way down, with the Preliminary UofM Consumer Sentiment and Inflation Expectations numbers. At some point I'll probably quit turning this into a walk down memory lane, but not today. A year or so back these preliminary numbers caught the eyes of traders and started knocking out some decent trades. But lately? 8, 8, and 7 pips over the last 3 months. An easy Pass. We end the week with Consumer Credit at 3:00 p.m. No one cares about this one. Hopefully you've shut things down for the day by now.
And that's all there is for yet another week as we go charging headfirst into the Holidays. I'll see you back here next Sunday for a look at next week's calendar.
Jeff
