Hi Folks.
Here is this week's forecast.
SUNDAY: Several entries, none tradeable. German elections and a couple of New Zealand numbers are pre-market open, so no worries there. Japan announces a Bank Holiday (Emperor's Birthday for those of you keeping score at home) and at 9;00 p.m. my time New Zealand releases their Credit Card Spending m/m number, which has never, as far as I can see on the charts, even caused a blip in price action. So another Sunday evening watching old movies and not the charts.
MONDAY: Asian/London Session: A lot of activity from start to finish, but none of it looks designed to give us anything to trade. Forex Factory lists the German ifo Business Climate number as a "beige folder" number, meaning mid-level in terms of impact on the market. But a quick trip through the EUR/USD over the last several ifo releases shows nothing of any significance happening after the number drops. the EU follows at 5:00 a.m. my time with Final CPI y/y (Core and Overall), which, you know, CPI, right? Wrong. The last three months have been dead price action in the hour after release, although November's was better than the next two, but that was based on earlier news in the 4 a.m. hour carrying over to 5 a.m. Most of the rest of the day is report releases rather than numbers, or various (non-US) Fed guys speaking. But at least the Asian/London market has that going for it, because in the
USA Session: Nothing. No numbers. No reports. No Fed clowns. Nothing.
TUESDAY: Asian/London Session: early stuff is meaningless. German Final GDP hasn't moved price around in ages, GBP's CBI Realized Sales is one of those "diffusion" numbers that traders generally ignore, and with this one, the number that comes out routinely misses by 10-20 points, so even the guys who put it out cant make heads or tails out of it. The rest is just non-US Fed chatter until 7:30 p.m., when the Aussies drop their CPI y/y number, along with a meaningless construction number. FF lists this as a red folder report, and, again, it's CPI, right? Wrong again. Traders seem to have an aversion to the AUD CPI number and it rarely moves the needle by more than 5-10 pips after release, and honestly, anything could be behind that small move. So once again, pass.
USA Session: We make up for the lack of news yesterday by filling the calendar with garbage today, starting at 4:15 a.m. as some guy nicknamed Short Straw gets to drag his (or her...first name is Lorie but you never know) ass out of bed to appear at a Bank of England conference. We are asleep, so again, probably nothing to worry about here. A pair of routinely ignored housing numbers at 9:00 a.m., followed by the Conference Board's Consumer Confidence number at 10:00, along with the Richmond Manufacturing Index number. Neither set the world on fire but FF has the CB number listed as red folder. Once again, price action over the last 3 months tells a different story. Both numbers can likely be ignored as well. We close out with two Fed clowns jabbering (11:45 a.m. and 1:00 p.m.).
WEDNESDAY: Asian/London Session: We open the session with the BOJ Core CPI number right at midnight. Amazingly enough, FF lists this as a "yellow folder" meaning low priority, but it's CPI, right? Well, maybe. There tends to be 20-35 pips price action on the USD/JPY in the hour after release, which is not insignificant. Don't expect to see the kind of crazy whipsaw price action we get with the USD CPI, but anytime to can catch that many pips in an hour on a low-stress news-based trade, it's probably worth taking a look at. As for the rest of the session, literally none of it is worth mentioning, morning or evening session. Just a bunch of third tier reports and numbers not designed to do much at all. Oh, and the G20 is meeting in South Africa. I doubt much will come out of that in terms of tradeable talk or events.
USA Session: Not any better than the earlier session. Fed Speak at 8:30 a.m., New Home Sales at 10:00 a.m. (pass); Crude Oil at 10:30 and more Fed chatter at noon. Great news for Oil traders: the weekly number usually gets things moving at least for a while. But the rest of it is meaningless.
THURSDAY: Asian/London Session: Once again a huge number of calendar entries, but not much to get excited about. The Swiss have their quarterly GDP number (which generates almost a whole 12 pips in the hour after release over the last two numbers...yawn) and the Spanish release their Flash CPI number (also a 12 pip monster in the hour after release) both at 3 a.m. my time and both can be ignored in spite of their FF "beige folder" status. The rest of the morning is just junk numbers, and to make matters even more boring, the G20 continues into their second day in South Africa. In the evening, Japan releases their Tokyo CPI number, which focuses solely on prices in Tokyo, so in spite of it's CPI status (which by now you've probably figured out all CPI's are not created equal) there just isn't any price action to be found post-release. Nothing else coming out of either Japan or Australia this evening is worth trading.
USA Session: For news based trades, it all rides on the 8:30 a.m. numbers today. We get both Preliminary GDP q/q and Unemployment claims, along with Durable Goods (which standing alone rarely does much any more) and the Preliminary GDP Price Index number, which is a lesser inflation gauge. GDP will likely rule the day and since all these numbers just mentioned all hit at the same time, I'll just look at GDP, which has generated not just 25-40 pips in the hour after release, but it has a tendency to be the start of a multi-hour long trend that can span 100 pips or more (looking at the EURUSD). Definitely worth looking at. After 8:30, however, the quantity is good but the quality is garbage. Pending Home Sales at 10:00 (pass); NatGas at 10:30, and a bunch of Fed Speak at 9:15, 10:00, 11:45, 1:15 and 3:15.
FRIDAY: Asian/London Session: A huge group of numbers coming out of France and Germany today, the biggest likely being the German Preliminary CPI m/m number. But since it's a floater and we don't have a specific time to expect the release, we can't do anything with it. As for the French CPI and GDP numbers, they don't have any recent history of making a difference. The rest of the numbers are just filler until you get to the 8:30 CAD GDP m/m number. The CAD has been fairly quiet this week (a couple of numbers but not the kind designed to make price go zoom) so this is it for the CAD. Now or never (for this week anyway) so expect some nice action on the CAD pairs.
USD Session: Similar to yesterday, it all rides on the 8:30 numbers, the biggest of which is the Core PCE Price Index, a.k.a. the Fed's Favorite Inflation Gauge. Last month it was at .2. This month they expect .3 which is higher than they like, but with the CPI numbers a few days back coming in so hot, .3 looks like a good bet and don't rule out .4. No matter how it drops, this number will generate some tradeable activity for us right from the start of the morning. But after 8:30, things go downhill dramatically. At 9:45 we get the Chicago PMI, which FF lists as a beige folder, which simply proves the fine folks over at FF are as delusional as ever. Chicago PMI hasn't meant anything to traders since Mrs. O'Leary's cow kicked over the lantern and started the Great Chicago Fire. So after 8:30 maybe you can call it a day in terms of worrying about scheduled news events.
See you back here next week,
Jeff
