Hi Folks.
Here is this week's forecast.
SUNDAY: Before I get started with tonight's numbers I want to make a quick point that applies to all the "international" numbers (meaning non-USA). Whenever I say a number is not likely to move price much or at all, I've checked one of the main charts for whatever currency is involved and have gone back through 2 or 3 of those reports to see how price reacted previously. The charts I look at are typically the USD linked charts (Euro = EUR/USD, GB = GBP/USD) as these are the most heavily traded charts most of the time and thus the ones most likely to show some price action after a number drops. But the fact is most of the time the "international" news really doesn't inspire a lot of trading, outside of GDP and CPI type numbers, along with any local Fed rate meetings. So don't be surprised when I summarize an entire day's worth of foreign numbers with a single "Don't bother" sentence. I'm not being flippant. There just isn't anything out there I saw that makes me think the number or numbers in question are worth trading.
Like tonight.
Three numbers out of Japan and a Housing Index number for GB (yes, at midnight GB time so you can guess how important they consider this particular number from a trading standpoint). The Japanese numbers are important, but not from a trading standpoint and the charts back that up. So you can safely pass on the early numbers this week.
MONDAY: Asian/London Session: We start with German PPI at 2:00 a.m. and Swiss PPI at 2:30a.m. Being PPI numbers you'd think these would be somewhat worth watching, but last month the Swiss number moved a grand total of 14 pips during the hour after the release and the German number moved 13. And this was pretty much the norm. So we can safely ignore these two, at least based on previous data. The World Economic Forum meets in Davos all day (Switzerland time), probably trying to come up with a marketing plan to make eating bugs sound more palatable, and the Eurogroup meets as well. Davos isn't the source of anything worth trading (just mock-worthy) but the Eurogroup is the group that manages the finances and economic policies for the entire EU, so some minister could speak with the press during a session break and say something newsworthy, but we have no way to trade it or even plan for it. Canadians release their BOC Business Outlook Survey at 10:30 but again, it's a report and not a number so trading it only works if you get an early copy and are good at guessing what it all will mean for the CAD pairs. In the afternoon my time New Zealand releases a BusinessNZ Services Index number, but it's another entry in a long list of numbers traders ignore, even in New Zealand, apparently.
USA Session: Today is Martin Luther King's birthday (at least it's the day it's being celebrated with a day off as a National Holiday) and also Inauguration Day for President Trump's return to the White House. So everything US based is closed until tomorrow.
TUESDAY: Asian/London Session: Today we lead off with an actual trading possibility, the GBP Claimant Count number that measures first time unemployment claims. Last month they expected a number in the 28k range but it clocked in at 300. Not 300k, 300. And those who bought the GBPUSD had a shot at 40 pips over the next 30 minutes or so. Pretty nice move and never in doubt. Will history repeat itself this month with an expectation of around 10K? Tune in and find out (there are two other employment related numbers also dropping at 2:00 a.m. but the Claimant Count is the only number that really matters). The rest of the overnight/morning is a bunch of stuff, including more WEF, Eurogroup and ECOFIN meetings, but the same rule applies to these as usual. No number = not tradeable. But at 8:30 a.m. my time the CAD releases multiple CPI numbers (Core, Median, Trimmed, Common, etc.) Like most CAD numbers this one is likely to move prices on the CAD pairs around, and probably quite a bit if the Overall and/or the Core numbers end up missing in either direction. So CAD traders beware and be ready. Later in the day New Zealand has a floating GDT Price Index number but no set time = not tradeable. They also have their own CPI number q/q. The previous number dropped in Oct., was projected to be .7, came in at .6, which was 2 ticks above the previous release at .4, and there was about 40 pips of downward movement on the 1H candle for the NZD/USD. So, for those of you living in the region (or here in the USA that like to trade the evening Open), keep an eye on this number. We close out at 6:30 p.m. my time with the Melbourne Institute Leading Index number for Australia, and like all the Leading Index numbers released for all the various currencies, it's a non-event. No one watches, no one cares.
USA Session: Two days in a row with no news for the USA. That does not happen very often.
WEDNESDAY: Asian/London Session: If you want to hit the snooze alarm and sleep in until tomorrow, this is the day to do it. At 2:00 a.m. the GBP has Public Sector Net Borrowing, which I have never seen do much of anything at all. WEF is still meeting, the German Buba releases some sort of monthly report and the GBP drops their BOE Quarterly Bulletin. No times given for any of the three, so just make a note they are out there but don't plan to trade them. At 8:30 a.m. Canada releases a couple of PPI-style numbers, but after yesterday's CPI number fiesta, assuming you saw a lot of price action, this one might be muted in comparison. But overall, Canadian numbers tend to move prices around when they drop so give them some attention, but maybe don't expect quite as much as yesterday. At 10:15 a.m. Lagarde from the ECB is speaking, New Zealand releases their monthly Visitor Arrivals number (4:45 p.m.) and Japan drops their Trade Balance number (6:50 p.m.) None of those are typically worth your time.
USA Session: At 10:00 a.m., the Conference Board Leading Index number arrives. And it has never, ever, caused prices to move even a tick. So this is the functional equivalent of 3 straight days with no news.
THURSDAY: Asian/London Session: A lot of "stuff" today but not much that has any meat on its bones. WEF meets for yet another day, probably testing out deep fried cockroach recipes or something. GBP has an Industrial Order Expectations number at 6:30 a.m. which you can safely ignore. CAD drops their Retail Sales numbers at 8:30, and while I am admittedly a fan of Canadian numbers, this one, like its US counterpart, does not make as big a wave when it drops as the CPI/PPI numbers from earlier this week. So while it's worth watching, it may not do a whole lot for you, depending on how close the actual is to the forecast. At 10:00 there is a European Consumer Confidence number released, but it is close to quitting time in the EU for the big traders so this one won't matter much. Then things get a little crazy later this evening. Australia has their Flash Manufacturing and Service PMI numbers hit at 5:00 p.m. my time, but these don't seem to do much for the local currency. At 6:30 Japan has a National Core CPI number, which usually comes in right on target, and given later scheduled Japanese news, likely won't cause much of a stir. GBP has their GfK Consumer Confidence number at 7:01 (which is midnight:01 in GB so no need to worry about this one doing any damage); Japan has a Flash Manufacturing PMI number at 7:30 (again, given what's coming up likely makes this one a non-event) and New Zealand has Credit Card Spending y/y at 9:00 p.m. This one isn't worth watching either. THEN, we have the Japanese floating BOJ Interest Rate decision, along with some related Interest Rate numbers, and then a Press Conference likely around midnight to 1:00 a.m. my time (again, this one is a floater just like the decision release). You can't trade it, but traders will be focused on what happens with the BOJ and the Yen and will likely ignore the other Japan economic news in favor of what happens with their Interest Rate. Most observers think Japan will raise their rate from .25 to .50%, although there is some late chatter that they want to wait until they've had a chance to confer with the new US officials from Trump's team before making the call, which would push the decision back until March. Since we can't really trade it given no fixed time for release, all you can do is be aware it's out there if you are trading the Yen tonight.
USA Session: 8:30 a.m. Weekly Unemployment Claims (the last one before our own Fed meets next week to discuss a possible Rate Cut), and because of the Monday holiday, we have Nat Gas at 10:30 and Crude Oil at 11:00. Unless you trade either or both fuels, the Unemployment number is your only hope for news-based price action, but lately even significant misses by this number have resulted in a muted response from traders. So today may be just like the previous three and run solely on technicals.
FRIDAY: Asian/London Session: WEF meets AGAIN (what could they possibly have to talk about at this point aside from how great it is to be a billionaire?), Lagarde speaks again (at 5:00 a.m. and amazingly enough, at a WEF event); GBP releases their CBI Realized Sales number, which is one of those goofy Index numbers we can safely ignore; and Canada has their New Home Price Index number, which isn't exactly a barn burner of a number, but it's Canada so dismiss at your own peril. Lastly we have a boatload of Flash Manufacturing and Services PMI numbers coming out: 3:15 for France, 3:30 for Germany, 4:00 a.m. for the EU overall number, and 4:30 a.m. for the GBP number. Any one of these could cause the EUR/USD to move some if they miss wildly (or the GBP/USD in the case of the GBP numbers) but watch your favorite chart and see if a trend starts to develop (assuming all the numbers are either all good or all bad). You could bank more pips off a developing trend than you would of any individual reaction to a single set of numbers.
USA Session: We also have the Flash Manufacturing and PMI numbers dropping together at 9:45 a.m. It's strictly anecdotal and based on what I think I remember seeing over the last few months, but when we get both numbers at the same time we seem to get a stronger market reaction than when we get one number at 9:45 and the other at 10:00. So this could be a good set of numbers to trade today. After that's finished, we get Existing Home Sales and the Revised University of Michigan Consumer Sentiment and Inflation Expectations numbers. None of those three have any sort of history of making price move post-drop, so your trading day should probably end right after the Flash numbers make their appearance.
See you back here next week.
Jeff
