Hi Folks.
Here is this week's forecast.
SUNDAY: Nothing. IMF is having its 7th consecutive day of meetings (so some sort of nefarious nonsense must be on tap) but nothing tradeable.
MONDAY: Asian/London Session: It's all junk numbers. The only upside is there are only 3 numbers dropping over 24 hours (again, all junk) so taking today off isn't the worst idea you ever heard.
USA Session: Nothing. Not even a whisper of a number. Once again, taking a break until Tuesday could easily be justified in my mind.
TUESDAY: Asian/London Session. Tons of numbers, most of them garbage. But there are a couple with potential. It starts with a mysterious Beige Folder ranking for Spanish CPI y/y at 3:00 a.m. I went back through the charts for the last 3 months of releases and there is absolutely nothing that indicates the market moved the 10-20 pips on average over the next 60 minutes because of this number, which both hit the target and missed substantially over that same 3 months. So another good chance somebody at FF fat-fingered their keyboard when assigning folder color to this one. Pass. The rest of the morning is all junk. In the afternoon, the early Asia numbers are junk. but Australia drops their own CPI numbers at 9:30 p.m. my time. In the past I've mentioned that the whole world seems to pay attention to the USA CPI number each month, but pays little attention to anyone else's, and today is one of those times. The three previous Aussie CPI number drops have generated 10-15 pips over the next 60 minutes after release, and honestly, the 1H candles before and after the number drop seems to be larger than when the number itself hits. So once again, it's a Red Folder event but the price action fails to justify that designation.
USA Session: Much like the A/L session, a bunch of numbers but none with any real meat on their bones. 8:30 brings us Preliminary Wholesale Inventories and Goods Trade Balance. Inventories has never moved the needle in the 20 years I've been watching, and neither has the Goods number, but keep an eye on Goods as time moves on. The number has been in the negative for as long as I have been alive (63 years and counting) but President Trump and his tariffs are aiming to change that. Based on anecdotal evidence alone (meaning what I am hearing from people I know or know of who are closer to this than I am) this number is going to start dropping any time as new trade agreements are being reached and US exports should start going up thereafter. We may never see this number post a "positive" simply because of the size of the USA and the amount of demand there is for goods, but if it keeps inching towards the zero line, that will end up as a good thing for the US economy. 9:00 a.m. are a couple of housing numbers (pass) and at 10:00 we get the Jolts Job Openings number, a semi-legit Red Folder number that performs much better when linked with the ISM Manufacturing PMI. No PMI today, so this one likely won't move things around as much as it could when paired with the ISM number. FF then gives us the Conference Board Consumer Confidence number as a Beige Folder, and if they did that on purpose I have to think they are slacking in the drug testing department over at FF. Because you have to be high as a kite to think the CB CC number is going to do anything aside from take up space. We close out at 4:30 with the API Weekly Statistical Bulletin, after the Oil market is effectively closed. So no big deal.
WEDNESDAY: Asian/London Session: Once again, a lot of numbers and a lot of numbers you can safely ignore, including most of the CPI and GDP numbers, as they historically do not do much in terms of price action on the EURUSD, which is the chart I look at for EU-based numbers. Having said that, if you are looking for one number that at least could move things around a bit I direct your attention to the French CPI number at 2:45 a.m. my time. Of all the various CPI/GDP numbers dropping today, French CPI in the past has thrown out a couple of 20+ pip price moves which cannot be attributed to anything else of note. Pretty much the rest of the numbers are lucky if they get 10 pips of movement, but a 20 pip move is decent on just about any chart and make French CPI worth at least watching to see what happens. As for the Red Foldered German CPI number, it's an all-day affair and is composed of 6 different numbers from 6 German states that drop whenever the state feels like sending it in, so it's completely not tradeable. The best number of the bunch in the morning is the CAD GDP m/m number. This one consistently powers 30-40 pip moves and seems to keep the party going over the next 1-3 hours after the drop. So it is definitely worth trading. The evening numbers can be safely ignored except be aware the Bank of Japan has their Policy Rate decision at some point tonight, likely between 11:00 p.m. and midnight my time, but no specific time set. So if you trade the JPY be aware there could be fireworks at any given point tonight/early tomorrow once the decision hits the wires.
USA Session: A solid morning to trade. We lead off the ADP Non-Farm Payroll number, which really isn't tradeable but gives us some clues for Friday. Then the Advance GDP q/q number at 8:30 a.m., and being the Advance version this is trader's first look at what is expected and it tends to draw in a lot of trade activity as a result. The other 8:30 numbers take a backseat to this one. And speaking of backseats, at 10:00 a.m. we get the Core PCE number, aka the Fed's Favorite Inflation Tool. This is the one that calls the shots as to whether rates go up, down, or remain the same when the Fed meets every 6 weeks (and the next meeting is on May 7, next Wednesday, so this number will be watched like a hawk by traders looking to get an early hint at what to expect from the Fed). The rest of the 10:00 a.m. numbers are meaningless compared to the Core PCE. We close out with Crude Oil at 10:30 as we do each Wednesday when there is no Monday holiday.
THURSDAY: Asian/London Session: Today is May Day, so most, if not all of Europe takes the day off. The Swiss drop some inconsequential number at 2:30 a.m., as do the Australians, but the GBP is really the only game in town at 4:30 a.m. with a bunch of Yellow Folder nonsense. Normally I would say this could have more impact than usual given the lack of news otherwise, but with most of the volume missing from the market it likely won't do much at all. And the Japanese have their surprise presser after their surprise rate announcement, so be aware of that. But overall, not much to look forward to this morning. In the evening there are more Yellow Folder reports which you can safely ignore, but yet again somebody at FF has decided that Aussie Retail Sales at 9:30 p.m. is Beige Folder-worthy, which might inspire people to at least take a look. I took a look at the last 3 months worth of numbers, and aside from the huge miss back in February, which led to a 40 pip high/low in the hour after the drop, the normal response to the number coming out anywhere near expectations is a 10 pip 1H candle. So watch the actual number closely. If it misses by a half a percentage point or more, it might be worth trading. Otherwise, pass.
USA Session: 8:30 leads off with weekly First Time Unemployment Claims, a number that has remained steady over the last few weeks and therefore really hasn't done a whole lot in terms of any surprise price action. Since the Fed has abandoned Unemployment in favor of moving back towards fighting Inflation, this one has lost favor in the eyes of traders as well. It doesn't mean we can't get a surprise number (good or bad) and some surprise price action as a result. But so far in 2025, this one is lulling traders to sleep by its consistency. 9:45 brings us the general Manufacturing PMI, which FF once again awards Beige Folder status, but over the last few months of watching this one I haven't seen anything noteworthy, simply because at 10:00 we get the ISM Manufacturing PMI, which is the one that tends to move prices for a while after release. We get NatGas at 10:30 and that floating Ward's Total Vehicle Sales number that seems to come out in late afternoon, from what I recall when looking for it a few months back.
FRIDAY: Asian/London Session: It's all about the Manufacturing PMI today, with the various numbers dropping as follows: Spain 3:15 a.m.; Swiss 3:30 a.m.; Italy 3:45 a.m.; France 3:50 a.m.; Germany 3:55 a.m.; and the overall Euro number at 4:00 a.m. Alone none of these do a lot but if they all come out really good or really bad a minor trend on the EURUSD could develop, so keep an eye out for that. At 5:00 a.m. the EU releases their CPI Flash Estimates (Core and Overall), along with EU Unemployment. With perfect timing on entries and exits you might get 10 pips on this one, if the historical numbers hold up. But that's a lot of risk for a little reward, so you should probably pass on this one as well (and ignore yet again the FF Beige Folder designation, which they seem to just randomly award to numbers these days just for fun).
USA Session: NFP Day is here at 8:30 a.m. as usual. Trade accordingly. At 10:00 we get Factory Orders, which no one cares about. So trade NFP and call it a day.
See you back here next week.
Jeff
