Hi Folks.
Here is this week's forecast.
SUNDAY: A pair of New Zealand numbers dropping at 6:30 and 6:45 this evening my time. Neither are worth mentioning and neither will generate more than 4-5 pips. An easy Pass.
MONDAY: Asian/London Session: I mentioned a week or two back I was going to pay closer attention to some of the JPY numbers due to Japan's attempt to dig themselves out of this malaise that's lasted about 4 decades now. I mean, better than late never, right? But tonight's entry, Revised Industrial Production that leads us off at 12:30 a.m., has given us a generous 8, 4, and 3 pips over the last 3 months. A classic "I shouldn't have to say it but I will anyway...Pass" situation. Nothing else aside from Canada's CPI number at 8:30 a.m. The previous three results of 14, 13, and 9 (9 being the latest number) show a report heading the wrong direction, as are most of Canada's numbers these days. It's too bad. Many a mundane day was once rescued by a crazy 30 pip response to a mid-level CAD number. But no more, it seems. Pass. And that is pretty much it for the day (aside from a ton of Chinese numbers I ignore because I don't have any Chinese pairs to use for reference sake).
USA Session: Two weeks ago I made a lame joke about getting no numbers to trade two weeks in a row. I had been referring to that week's calendar, which had no US entries, and the next week, which was Labor Day. Little did I know we would follow up Labor Day with yet another Monday with no numbers. So make that 3 in a row.
TUESDAY: Asian/London Session: Tertiary Industry Activity out of Japan at 12:30 is yet one more Japanese number I've long ignored but feel compelled to look at once again. 8, 4, and 8 pips the last three months convinces me I need to keep a separate list of these numbers that don't seem to have much interest in getting any better. It will save me time and make this Forecast that much shorter. We get the Claimant Count change out of Great Britain at 2 a.m. and this one has done well in the past but has been tailing off slightly over the last 6 months or so. The last 3 numbers were 18, 21, and 18, so it's just under my line for an automatic trade. But given the near-total lack of decent numbers to trade this week during the A/L session it might be worth a shot. But don't be shy about getting out at 10 or 15 if price just looks uncooperative. The rest of the session is mostly composed of those EU-member specific numbers out of Italy and France that don't move price around at all, and the late Japanese number (Core Machinery Orders at 7:50 p.m.) has a 6, 3, and 6 pip track record over the summer, so it too goes on the Naughty List until further notice. Pass.
USA Session: We actually have some numbers to look at today, but all three (ADP Employment Change at 8:15, Empire State Manufacturing Index at 8:30 and that API Weekly Oil Report at 4:30 p.m.) are just time wasters and money burners. Pass on the lot of them.
WEDNESDAY: Asian/London Session: 2:00 a.m. brings us the last of the Big 3 GBP numbers worth looking at this week, the CPI m/m (the other two being the Claimant Count and GDP). While the other two have been showing less than exciting results, here we get 17, 21, and 28 pips over the last 3 months. Meatloaf sang it and I believe it: two out of three ain't bad. So be ready for this one, because the quality of the rest of the numbers in this session falls off pretty quickly. In fact, the only number worth mentioning due to its Red Folder status is the New Zealand GDP q/q number dropping at 6:45 p.m. The last 3 numbers generated 10, 10, and 2 pips, with 2 being the latest result. I understand that GDP numbers are important, which is why FF keeps Red Folder-ing all of them. But we don't have to trade them and that's exactly my plan for this one. Pass.
USA Session: A decent cross-section of crappy numbers on tap for today. Retail Sales at 8:30 continues to cling desperately to its Beige Folder status, in spite of 3 months of 15, 18, and 10 pip results. A Yellow Folder designation cannot be too far away for this one. Pass. Garbage after that (except Crude Oil at 10:30) until 2 p.m. when we get the latest Fed Interest Rate Decision. FF fails to give us any early hints at a consensus expectation, but a quick check online tells me that last week's CPI coming in a bit hotter than expected has raised the chances of a rate HIKE to about 90%. That usually means we will see a rate hike. But if we do not (and a rate cut is 100% off the table but a stand pat has a small but devoted group voting that way) then be ready to see a whole bunch of 100 pip/point price swings. Even the first rate hike since 2023 will likely shove prices around in both directions for a good long while after the decision is released. So just be ready to grab what you can when you can with this one. And don't be surprised if you're still firing in trades at 3:45 p.m. This will likely take a while for the market to calm down no matter what the decision.
THURSDAY: Asian/London Session: The only things worth mentioning are the Great Britain Interest rate decision at 7 a.m. my time and the Japanese Interest Rate decision at "Tentative" (per the usual). Japan first: nothing we can do with a 'tentative", even on something with as much potential as an Interest Rate decision. But it is what it is. So just be aware that somewhere between 11 p.m. and midnight my time the rate will likely drop, if you happen to be trading the JPY. Just know these sorts of numbers have the capacity to curb-stomp otherwise perfectly good trades you might be in. As for the Brits, their current rate is 3.75% and they are expected to stand pat for at least this latest meeting. They cut their rate to 3.75% last December and haven't budged since, but each rate (non)decision was good for 20+ pips, the last 3 results being 28, 28, and 22. So this one is definitely worth trading, and if the BOE Governors look at Australia already at 4.35% and the US bumps to 4.00% as expected, they may feel compelled to keep up with the Joneses and raise their rate as well. At that point we are likely looking at a 50-75 pip move instead of something in the 20's. So it will be worth sticking around for this one I think. And as noted above, the rest of the session numbers are dumpster fire fuel. Pass on those.
USA Session: A session of fillers and garbage. Get here early and trade the GBP Interest Rate Decision and forget about the lackluster US numbers today.
FRIDAY: Asian/London Session: Japan has a Press Conference scheduled for "tentative" (shocker, I know) after their own Interest Rate Decision late last night. Like the number itself, we can't really trade it but it could destroy some open JPY trades, so be aware. The GBP Retail Sales number drops at 2:00 a.m. and this is yet another number that was an automatic Yes a year ago or so, but has since fallen on hard times. 12, 17, and 15 pips are the last 3 results. Not the worst we've seen, but neither do they inspire. I find myself saying this a lot lately. The pending news for Friday makes an excellent case for yet another 3-day weekend.
USA Session: As do the US numbers, which are space fillers at their absolute best. So don't waste time nor money trading this dreck. Head for the beach if the weather is still nice where you are.
And that's all there is for this week. See you back here next Sunday for another exciting edition. Or at least a set of good reasons to take a few more days off.
Jeff
