Hi Folks.
Welcome to yet another week of Government Shutdown Trading. I've pretty much given up trying to guess when the necessary pulling of heads out of asses will occur and our elected officials will begin to at least fake giving a damn about the public they were elected to serve.
So maybe the "Tentatives" will materialize and maybe they won't. We should know for certain sometime after 5 p.m. this coming Friday.
So here's what's left of the forecast.
SUNDAY: Two events and we can't trade either one. Aussie Fed Speak at 6:30 p.m. my time and at 6:50 p.m., Japan releases the Minutes from their last Interest Rate meeting. On to Monday.
MONDAY: Asian/London Session: The real news starts off right at midnight when Japan releases their Leading Indicators number. Like all LI numbers, this one is composed of 11 numbers already released earlier, so there are no real surprises and the fact this one generates less than 10 pips in movement in the half hour after release tells you all you need to know. Pass. British Fed Speak at 4:10, followed by Eurozone's Sentix Investor Confidence number, which traders seem to ignore each month as well. Pass. In the evening session (6:30 p.m.) Australia drops the Westpac Consumer Confidence number and like the vast majority of these numbers (Investor Confidence, Inflation Expectations, etc.,) it has zero impact on price action. At 6:50 p.m. Japan releases the duo of Bank Lending and Current Account (these two norally drop the same date and time each month but occasionally get split between different days). It doesn't matter. There is an occasional flirtation with 20 pips but it never seems to get over the finish line, either in combination or standing alone. So it's a pretty safe Pass, but if you do decide to take a run at it, don't be a hero and hang in for 20. If you see 15, prepare to eject from the trade. 7:01 p.mm. is the British BRC Retail Sales Monitor number. It drops just after midnight and we don't trade numbers that drop when the vast majority of the target country is asleep, so Pass. 7:30 p.m. brings us Australia's NAB Business Confidence number (another entry in the class of numbers traditionally ignored by traders) so Pass; 9:00 p.m. rewards our patience for sticking around for so long with the New Zealand Inflation Expectations q/q numbers. I've already insulted this class of number tonight twice, so since FF awards this particular version a Beige Folder status, let's look at the last 3 numbers it's posted: 6 pips, 4 pips, and 5 pips. This is why I roast these numbers and while I should not have to write this, I will: PASS! And finally we close out the day at 10:35 p.m. with the Japanese 30 year Bond Auction, which typically generates 5-10 pips of movement. Last month it shot the moon and posted 19 pips, but this was at the very end of a 3 hour run-up in the price of the USDJPY. So other influences were likely afoot. Pass.
USA Session: One entry listed as "Tentative": the Cleveland Fed Inflation Expectations number. It normally drops between 9:35 and 9:45 a.m., and the Fed is allegedly still showing up for work, so this one has a shot at dropping. But even if it makes it's semi-scheduled appearance, it typically only moves 10 pips or less. So Pass on this one as well.
TUESDAY: Asian/London Session: Honestly, today doesn't look much better than yesterday aside from the British NFP, which I'll get to in a moment. We start with Japan's Economy Watcher's Sentiment at 12 midnight (Warning: there are a lot of these numbers on calendar this week) which is a trading non-event. Pass. Then at 2:00 a.m. the Brits release their Claimant Count Change (think NFP). This one has traditionally been an automatic trade as it normally gives away well over 20 pips. 2 months back it seized up and only managed single digits, but bounced back with 50+ last month. So definitely worth a look. 3:30 a.m. brings us British Fed Speak, and 5:00 a.m. we get the Eurozone (and Germany) ZEW Economic Sentiment numbers. Whether Germany specific or Eurozone wide, this one routinely fails to impress. Pass. 9:30 a.m. and we get the Conference Board Leading Index number, also a huge time and space waster. Pass. At 5:15 p.m. we get Australian Fed Speak, at 6:50 p.m. Japanese M2 Money Stock y/y and at 10:25 p.m. US Fed Speak (Barr scores a free trip to Singapore, thus the late hour for his speech). That Japanese M2 Money Stock number is something of an enigma. 3 months ago price barely registered a blip in the half hour after release. Two months ago it flirted with 20, pulling up short around +17. And last month? 28 pip move after release. Reviewing the other items set to drop at the same time or nearby, I could not find anything else that justified the bigger moves. So if you're around, keep an eye on this one. It might be worth it. And FYI, both France and Canada close their banks today for Armistice and Remembrance Days.
USA Session: The US also closes their banks and all other forms of trading for Veterans Day. But we do have the NFIB Small Business Index set for 6:00 a.m. It's a private number so it likely will manifest itself at 6 a.m., but with all the trading outlets closed (it is set for a 6 a.m. drop) and the Veteran's Day holiday, makes this one a double non-event.
WEDNESDAY: Asian/London Session: A complete dumpster fire of numbers from beginning to end. Not a single number has any history of really moving prices around, including the Australian Employment Change (again, think NFP) which is hard pressed to generate 10 pips on a good day. The only thing you need to remember is we have Brit Fed Speak at 7:05 a.m. in case you're trading the GBP around that time.
USA Session: Same as the other session. It's all trash numbers. Fed Speak at 9:20, 10:00, 10:20, 11:30, and 12:30. A 10 year Bond Auction at 1:01 p.m. and that Oil report at 4:30 p.m. A lot of noise and little to no chance it will amount to anything.
THURSDAY: Asian/London Session: 2:00 a.m. brings the British GDP m/m and all the related numbers that drop at the same time each month. None of those matter. GDP rules the session, and lately it's been not ruling as intensely as it used to. This was always a reliable 20-30 pip mover but the last 3 months have been 15-16 pip moves. While I would usually say Pass on this one for the trend in pips moving the wrong way, we have so little to work with this week this one might outkick it's coverage and get back to 20+ once again. So maybe be on the alert when this one drops. But after the GDP drops, so does the quality of numbers in this session. Swiss PPI is set for release at 2:30 a.m. but rarely cracks 10 pips, much less 20. The balance of the numbers in both sessions are absolutely insignificant and only the Brit Fed Speak at 7:00 a.m. and Swiss Fed Speak at 12:30 p.m. need to be noted.
USA Session: The CPI numbers are "tentatively" set for today, along with Unemployment Claims. They showed up in spite of being a product of an empty government office right now because the Fed was set to make another interest rate decision the following week and someone decided maybe it would be a good thing to drag the important players back into work for the day to make the CPI happen. The next Fed thing is still a ways down the road so this one may or may not show up today. Unemployment will almost definitely be a no-show barring the end of the shutdown. Crude Oil is set for 12 noon today (because of the Tuesday holiday) and there is a 10 year bond auction traders will ignore like always, and the Federal Budget Balance is set for 2 p.m. Since there is no Federal Budget at the moment (thus the Shutdown) traders may pay attention to this one for the sake of comic relief, but I can't see anyone actually trading it. Finally, be aware we have Fed Speak on calendar at 12:15 and 12:20 p.m.
FRIDAY: Asian/London Session: Another worthless session today. Feel free to ignore the French Final CPI and Italian Trade Balance (set for 2:45 and 4:00 a.m. respectively). At 5:00 a.m. we get the Eurozone's version of the NFP, along with GDP q/q and Trade balance. A rather diverse group of numbers, but at least the Employment and GDP numbers pair up on the same day regularly, so if these don't fire up traders, that Trade Balance number isn't going to do the job. And over the last 3 number drops, employment and GDP managed 6, 10 and 18 pips. I glanced back a couple of extra months to see if the small or the larger numbers were the norm and it was definitely the smaller numbers. And I cannot find anything else happening when the August number dropped that justified that manic run towards 20 pips. So I think I will put this one in the Pass column where it has belonged most of the time. Canada releases their Manufacturing Sales and Wholesales Sales numbers at 8:30 but they are part of that second group of Canadian Numbers that underperform when compared to numbers in the first group (that routinely knock out 20-30 pip moves). So Pass.
USA Session: PPI and Retail Sales (normally 8:30 a.m. numbers) are both listed as Tentative and since they did not come out last month I feel pretty confident they won't come out today either barring a resolution to the shutdown and some rapid calculating on the parts of the people who generate these numbers. So do not be surprised if they disappear from the calendar by the time Friday gets here. Same for the Business Inventories number, also set as Tentative and normally a 10:00 a.m. number. So what's left? NatGas at 10:30 a.m. and Fed Speak at 9:20, 10:05 and 2:30. A pretty sorry Friday for numbers trading, but that's our new reality until things change in D.C.
And that's it for another week. I will say I have begun dreading the end of the shutdown because I think the powers that be will want to jam all the delayed numbers into the calendar in one week and get them out of the way. That will likely make for a War and Peace-sized Forecast. And if I wanted to write War and Peace, I would write War and Peace, not the delayed number version I fear is headed down the pike right at me. But in the immortal words of Hyman Roth, "This (cough cough) is the life (cough cough) we have chosen."
See you back here next week.
Jeff
