Hi Folks.
Here is this week's non-Summer Doldrums-influenced Forecast, and I cannot begin to tell you how happy typing those words made me.
SUNDAY: One report to start the week: at 9:30 pm we get the Australian ANZ Job Advertisements m/m, which has routinely been a 5 pip performer for as far back as I can recall. So, as usual, we start the week with a Pass.
MONDAY: Asian/London Session: Canada takes another day off, this time for Labor Day, but for the rest of the A/L members, it's business as usual. And for us, that means a cavalcade of crappy numbers that will do absolutely nothing in terms of price action fuel. And that includes the Japanese Final GDP q/q at 7:50 p.m., which over the last 3 months has posted an eyewatering 9, 17, and 13 pips. Not the worst set of numbers we'll see this week, but still not worth taking any risks.
USA Session: The US is also closed for Labor Day, and this is usually one of those days where everyone really does take the day off, so there won't likely be any surprise volume coming from our shores to ramp up price action.
TUESDAY: Asian/London Session: So tonight we leave behind the massive 20 entry calendar of yesterday and dive headfirst into the miniature offering of 5 entries for today, only to learn that diving headfirst into a shallow pool isn't as much fun as it sounds. The only number even slightly worth exploring is the Japanese Money Supply number at 7:50, and the last 3 results of 4, 4, and 3 tell you all you need to know about what to expect here. Pass on all of it.
USA Session: Two numbers today: the NFIB Small Business Index at 6 a.m. and Consumer Credit at 3:00 p.m. It's hard to imagine two more useless numbers, as Fed Head Warsh might say if we asked him. No need to get out of bed early or stay up late if 3 p.m. my time is late. Pass.
WEDNESDAY: Asian/London Session: Groundhog Day in September. 6 numbers total, all of them dumpster fire material, including the Japanese Preliminary Machine Tool Order number, which has only managed to generate 9, 12, and 10 pips over the last 3 months. Now you may have noticed I've been focusing on the Japanese numbers a bit more the last couple of weeks. There are two reasons for that. One is that the EUR numbers have mostly been reduced down to the component numbers from the member states. If the EUR number is only worth a nickel, there is no way the French or Spanish or Italian component number is worth a dollar. So until things change across the pond, I won't be spending a lot of time on the EUR stuff. The other reason is that recently the Japanese Central Bank chose to intervene in their economy by buying back Yen and selling US Treasuries in an attempt to strengthen the Yen, which had weakened to a 40 year low of 162.00 against the Dollar. So now Japanese numbers may begin to start playing a bit more important role in trader decisions to buy or sell the Yen, meaning we need to start paying a bit more attention to those numbers.
USA Session: Yesterday I mentioned it would be hard to imagine two more useless numbers than the NFIB Index and the Consumer Credit number. But today, we find out it wasn't that hard after all. Once again we get a pair of ADP Weekly Employment Change numbers, one from last week and one for this week. Traders still could not show less interest in these numbers if they actually tried, and the 1:01 p.m. Bond Auction and the 4:30 API Weekly Statistical Bulletin are both somewhere between Level D and Level F impact numbers, so yet again we get a day where we are better off doing anything besides trading these numbers.
THURSDAY: Asian/London Session: The early session starts with a couple of EU Member Country specific numbers which are automatically ignored until further notice. But at 8:15 a.m. my time the Eurozone Interest Rate decision drops, with a presser to follow at 8:45. I've mentioned before that only the US and usually the Great Britain Interest Rate Decisions have any sort of history of moving price around, and the previous 3 results here of 14, 23, and 15 tend to prove that out. The 23 from two decisions back happened when the EU decided to raise rates from 2.15% to 2.40%. It wasn't exactly a secret this move was planned for the June 11th meeting, but it still managed to get the EUR moving a bit once it became a reality. But no such bumps (or cuts) are planned for this morning so it looks like another 14-15 pip day. The rest of both sessions are trash, and that includes the Japanese PPI (4, 2 and 2 pips in the 5 minutes after release).
USA Session: And that leads us to the PPI here in the US at 8:30 a.m. Once again we are getting one of those curveballs they like to toss our way where the PPI jumps the line and posts its number a day before the CPI, which is the typical Day One number. When it's happened in the past, the PPI actually plays a little over its head and generates more pips than you'd expect when it plays second banana to the CPI. The last 3 months results (19, 18, and 24) don't mean as much because those were Day-After-CPI results. But since the two sub-20 numbers only missed by a bit, I'm going to flash the green light on this one and say Trade Away. And enjoy it while it lasts because the rest of the calendar is just filler, although note that NatGas drops at 10:30 and Crude Oil at noon, thanks to the Monday holiday.
FRIDAY: Asian/London Session: 2:00 a.m. brings us the GB GDP and a bunch of filler numbers that won't matter. I've been mentioning for a while that the British numbers have dropped in terms of 20+ pip reliability lately, and I think i even balked at the idea of trading this one last month because of it. So naturally we get a +24 result, after enduring 14 and 15 the previous two months. I'm hopeful this signals a turnaround in the fortunes of the GDP (and CPI and a couple of others) emanating from Great Britain, and frankly, due to the otherwise worthless nature of the A/L section of the calendar this week, I'd say give it a shot. But if price seems to be hanging at +17, don't be a hero. Close the trade and bank the pips. There are a couple of remaining numbers dropping later in the morning, but they won't do anything for price. Tonight, it's all about the GDP.
USA Session: 8:30 brings us the CPI, 24 hours later than usual (and expected). The last 3 numbers were 23, 62 and 30, so no bloom has fallen from this rose. Yet, anyway. CPI is still an automatic yes in terms of trading. We follow up at 10:00 a.m. with those Preliminary UofM numbers, but as I keep noting in this space every month, whatever it was about these Prelim numbers that got traders excited about trading them a year ago, is gone and not likely coming back any time soon. Remember when I mentioned those Japanese results on Monday night weren't the worst numbers we'd see all week? Well, welcome to the worst numbers. 8, 8 and 11 pips are what backers of these PUoM numbers saw over the last 3 months. And I don't think they'll suddenly double or triple up today for no good reason. So take the money and run on the CPI and take a huge Pasadena on these numbers (and yes, that includes the "tentative" Fed Policy Report and the 2 p.m. Federal Budget Balance.
Here's to a week of "normal" trading in spite of lacking much by way of economic number support, and I'll see you back here next week.
Jeff
