Hi Folks.
Not the best week for news coming up, aside from the USA once again getting the Unholy Triumvirate of CPI, PPI and Retail Sales, in that order. There is some moderately important Fed Speak on tap (Lagarde testifies before the EU Parliament and Powell does his twice a year testilying in front of Congress over two consecutive days), but aside from that, there just isn't much else worth getting out of bed over. I'll lay out the spots where I think something might happen, but as weeks go, this one doesn't look all that impressive.
So here is the forecast for Feb. 9-14, 2025.
SUNDAY: 2 Japanese reports (Bank Lending y/y and Current Account) drop at 6:50 p.m. my time. Not enough true volume or interest to make either of these worth trading.
MONDAY: Asian/London Session: Japan leads us off with an Economy Watcher's Sentiment number. This is a survey of people whose jobs put them in a position to watch how people spend their money. It reminds me of when Court TV used to interview "veteran court watchers" during some goofball trial they were following. These were usually old people with no legal background or training who had waaaay too much time on their hands and sat in a courtroom all day for the free entertainment. Their opinions were worth zip. Same with this number, which may be why no one trades it. The remaining entries for both morning and evening area collection of hot garbage, EXCEPT for Lagarde, as mentioned above, who testifies in front of some sub-group of the EU Parliament at 9:00 a.m. my time. It's the EU version of Fed Speak so actually taking trades based on anything she says is all but impossible, but just know she's out there and can do some real damage if given the chance. So be alert while she's yapping away.
USA Session: One lousy report which is also a floater, so no specific time is given. It's that quarterly Cleveland Fed Inflation Expectations number, which we've seen a half dozen times or so and not once has the market reacted with anything except a yawn. So no worries here. It can be safely ignored.
TUESDAY: Asian/London Session: Two British Fed guys speaking (Mann, who is no one important, at 3:45 a.m. and BOE Gov. Bailey, the British version of our Powell, at 7:15 a.m.) Typical Fed rules apply. 8:30 we have Canadian Building Permits, which might strain our general rule that all Canadian numbers are tradeable given the way the Loonie reacts to news, but this might be a bridge too far today. But it's out there if you trade the CAD. Japan closes us out at 6:50 p.m. with an M2 Money Supply y/y number. No big deal.
USA Session: We start with that NFIB Small Business Index number at 6:00 a.m. local time. Remember, if a country releases a number when everyone in that country is still asleep, we can ignore that number. The rest of the day is Fed Speak (Hammack at 8:50, Powell at 10:00 in front of the Senate Banking Committee, Bowman and Williams at 3:30 p.m., one in Iowa and one in NYC, and everyone except Powell can be ignored). Since this is Day One of his twice yearly visit to Congress, today's testimony will move things around some, so be ready. Tomorrow will just be a rehash of today, and is there to give some inflated egos in the House the chance to look like the fools they really are in front of a national audience (assuming anyone still tunes into C-SPAN).
WEDNESDAY: Asian/London Session: A crazy amount of news this session, but little to none of it will amount to much by way of price reacting to the contents of the reports. The overnight session is meaningless: Japan's Preliminary Machine Tool Orders at 1:00 a.m., Italian Industrial Production at 4:00 a.m. and a German 30 year Bond Auction as a floater. None of it is going to make anyone rich. GBP has that Conference Board Leading Index number which no trader anywhere will follow or trade, regardless of whatever number is posted, British Fed speak with Greene at 10:00, German Buba President Nagel speaks at 12:00 noon (no big deal but as usual, if you're trading any EUR charts, be aware), the Canadian Summary of Deliberations concerning their last Rate Cut drops at 1:30 (not a number but once the contents of the report are disclosed it could move the CAD around some), Japan has their PPI y/y at 6:50 with no previous releases doing much to the Yen one way or the other, Australia releases their MI Inflation Expectations, a number most traders don't even know exist, much less trade, the Brits have their RICS House Price Balance number at 7:01 p.m. my time (and midnight their time so once again, if the host country is sound asleep when the number drops, ignore it); and lastly on this busier that usually Wednesday, New Zealand releases their Inflation Expectations q/q number at 9:00 p.m. my time. Last month this number moved the NZD/USD a grand total of 8 pips over the course of the 30 minutes after the number dropped, so don't bother staying up late trading this one either.
USA Session: We start the morning with CPI at 8:30. Not much more I can say about this one I haven't already said many times over, but it has replaced NFP and even Fed Rate Announcements as the biggest number pusher we have on the calendar. And I'm pretty sure the Fed is burning incense and sacrificing live chickens behind the building on Constitution Ave. that this CPI number comes in a little higher than expected, if only to justify their recent decision to pause rate cuts until further notice. The last thing they want is for President Trump to mention at his next press conference that they as a collective group are a bunch of morons who shouldn't be trusted to run a lemonade stand, much less the US economy. So we'll see if all that chanting and chicken blood does them any good. After the CPI we have Powell on his second day of testimony, this time in front of the House Financial Services Committee. Then comes a list of other numbers and Fed Speak (at noon and 5:05 p.m.) that will likely have zero impact on any of the charts. It's all about the CPI today, with a tiny chance Powell says something on Day Two that makes things move around at least for a little bit.
THURSDAY: Asian/London Session: An entire file folder of numbers drops for the GBP at 2:00 a.m. but the only one that matters is the GDP m/m. Two months ago it missed by .2% and moved about 40 pips. Last month it missed by .1% and moved what, 14 pips? Something like that. I don't know if the size of the miss really matters all that much, but it is a GDP number and those are usually worth watching when they drop. Then at 2:30 the Swiss have their CPI m/m number, and they hit the bullseye last month and still saw around 40 pips worth of movement when that last number came out. So both are worth watching and being just 30 minutes apart, should make for an interesting lead-in to today's London Open at 3:00. The rest of the morning and evening numbers either aren't numbers at all or they are floaters, or they are just not worth mentioning. But Nagel from the German Buba is speaking again at noon, so be aware.
USA Session: PPI at 8:30, and if history is any guide, this won't be as exciting as CPI unless the numbers come out completely out of whack with projections. When PPI leads off the Gang of Three, it actually does something with price action. But when it follows CPI it just doesn't generate as much interest in the trading community. Unemployment Claims also drop at 8:30 and that might be what makes price go zoom this morning, so all is not lost. But afterwards, NatGas at 10:30, and the 30 year Bond Auction at 1:01 is all we have going for us. So let's hope PPI and Unemployment can team up and give us some trades worth taking.
FRIDAY: Asian/London Session: The only thing worth even looking at hits at 8:30 this morning when Canada drops the Manufacturing Sales and Wholesale Sales numbers. Typically not barn burners, but they are Canadian numbers and there isn't much else going on overnight, so maybe you'll see at least a small but tradeable amount of action on the CAD pairs.
USA Session: 8:30 brings us Retail Sales and Import Prices, and neither of those have done much for traders for a very long time. 9:15 has Cap Utilization and Industrial Production, normally snoozer numbers, and Business Inventories at 10:00, yet another number you'd think might create a little movement in prices but never fails to disappoint in that regard. Of all of those, the only one I think has even a tiny chance of making things happen is Industrial Production. I saw a report over the weekend that mentioned actual production in the USA has gone up exponentially since President Trump's election, and that should be considered a good thing (or at a bare minimum a tradeable thing). Whether that actually shows up in this number is anyone's guess and if it takes a full month of his presence and leadership to get the number to come around, then next month might really be worth watching for a change. But keep an eye on it today just in case. And we close out the week at 3:00 p.m. with Fed Speak so hopefully you've already packed it in for the week and are sipping on something cold and refreshing while that Fed Clown rocks his audience to sleep.
See you back here next week.
Jeff
