Hi Folks.
Here is this week's forecast:
SUNDAY: Ignoring the Chinese numbers, which are plentiful tonight, we just have a New Zealand BusinessNZ Services Index number at 5:30 (thanks to the switch to DST) and at 8:01 p.m. we get the GBP Rightmove Housing Price Index m/m. The NZ charts have remained flat the last few times that Index number dropped, and it's after midnight in Great Britain when the Housing number hits the wires, so it can be safely ignored as well.
MONDAY: Asian/London Session: Not much going on in this department today. The German Buba Report at 7:00 a.m., which is a report and not a number so not much we can do with that. Canada has Housing Starts at 8:15 and Foreign Securities Purchases at 8:30 a.m. As much as I like Canadian numbers (most of them, anyway) these two don't have much of a positive history behind them. So don't get too excited for this trade. Tonight at 7:20 p.m. an Aussie Fed guy speaks. The usual rules on Fed Speak apply.
USA Session: At 8:30 a.m. we get the 1-2 punch of Retail Sales and the Empire State Manufacturing Index numbers. That 1-2 punch thing was a joke, if you are curious. Neither number has done much for us in a long time and I am not expecting either to wake up today and start shoving price around. If you are trading either or both numbers, be very careful and don't expect much. At 10:00 a.m. we have Business Inventories and the National Association of Home Builders Housing Market Index. Much like the 8:30 offering today, neither of the 10 a.m. numbers do much either. So in sum, today pretty much sucks, news-wise, as far as the USD is concerned
TUESDAY: Asian/London Session: Once again we lead off with a bunch of trash numbers. Of the 5-6 numbers dropping between midnight and 6 a.m., only the German ZEW Economic Sentiment number at 6 o'clock is given Beige Folder status by FF, which means this number is a little more likely to move price around than all those worthless Yellow Folder numbers. But a quick glance at the charts for the last 3 months shows the ZEW just doesn't move things around more than 10-15 pips in an hour. And frankly, just plain old market noise gives you at least that much to work with on a normal day, especially a couple of hours after London Open. So you can safely ignore the very early stuff. At 8:30, however, the Canadians give us their CPI numbers in all their variant forms. This one is always worth trading and pretty much on all the different CAD charts. All the rest of the numbers in the morning and evening an be safely ignored, but be aware the BOJ releases the Japanese Rate Statement at some point tonight (they always make this one tentative, so we can't really plan the trade out)...if you trade the overnight Asian session just be aware it's out there and could drop at any time. Given no one expects them to move off their current rate of <.50%, as long as the number comes in on target you likely won't see to much crazy price action. But if the numbers comes in off in either direction, things could get crazy fast. So just be ready.
USA Session: Five numbers between 8:30 and 9:15 and none of them worth trading. If you are trading before 8:30, take a look at one or more of the CAD pairs before their CPI number drops at 8:30. You'll get a lot more action there than you will on any US Dollar chart when the US numbers hit the wire.
WEDNESDAY: Asian/London Session: Another sorry set of numbers for the overnight sessions. Japan has their "tentative" press conference based upon their earlier rate decision, but again, no fixed time given, so good luck with that. The rest of the early numbers are trash and can be ignored. In the late afternoon the New Zealand GDP arrives at 5:45 p.m., and the last two numbers were a study in opposites. The last number came out and posted a 30 pip+ drop after the number release, but in all honesty the NZD was dropping steadily for the 2 hours prior to the GDP release. So it's tough to pin the drop on the number. And two months ago there was maybe 10 pips of activity in the hour after the number dropped. So this is a very questionable FF "Red Folder" number. Then Australia follows at 8:30 p.m. with their monthly Employment Change numbers, also Red Folder designated by Forex Factory. And yet again, I am left questioning why this number gets Red Foldered. Two months worth of back numbers show approximately 10 pips of price action in the hour after the number drop. So much like the earlier New Zealand number, these Aussie Red Folder numbers can be safely ignored.
USA Session: Ah. So now I see why price action has been dead in the US for the last three mornings. 2:00 p.m. is the Fed Rate Statement, where they are expected to hold the rate steady at 4.50% (in spite of last week's CPI numbers showing not only slowing inflation, but prices actually dropping on the PPI compared to the previous month). I know, I know, one set of numbers does not a trend make. But one of the most consistent hallmarks of the Fed's existence is they always wait until too late to make the kind of adjustments that either squelch inflation or stave off a recession. So watching them hold for yet another month I am beginning to think a recession is being manufactured before our very eyes. Time will tell, I guess. There is also a presser at 2:30 (which seems to be where most of the real price action takes place, both during and after). And Crude Oil is set for 10:30 a.m. If you trade Crude you knew that already and if you don't trade Crude you simply don't care.
THURSDAY: Asian/London Session: Some pretty big news coming out today during the overnight session, starting with the GBP Claimant Count number at 3:00 a.m. The last 2 months this number has generated about 35 pips worth of movement on the GBPUSD in the hour after release, so it's definitely worth watching. The rest of the 3 a.m. numbers can be ignored. Then at 4:30 a.m. the Swiss release their Interest rate decision, which is expected to be a quarter point cut from .50% down to .25%. In December they cut from 1.00% down to .50% and the Swissy shot up around 70 pips, which is a huge move for that chart (USDCHF). Today they are expecting just a quarter point cut so I doubt we see a repeat, but there should be at least come activity worth trading, and then the presser 30 minutes later could generate another trade or two as well (not based on a specific comment but due to a trend developing or reversing based on said comment or comments). THEN, if that isn't good enough, at 8:00 a.m. the Brits have their own Rate Decision set for release, with the expectation being they will leave their rate at 4.50% for another cycle. If they instead drop their rate (no one is expecting an increase) we could see some real price action on the GBPUSD as a result, and their presser 30 minutes later could be more of the same. Also at 8:30 a.m., the Canadians have a couple of Price Index numbers coming out, and these could move the CAD around a bit more than the last few CAD numbers, which have been seriously on the low end of the impact scale. As for the rest of the calendar today, the remaining numbers (mostly set for the evening session) should have zero impact on price action.
USA Session: Weekly Unemployment Claims is the biggest thing we have going on today in the US. If you've been paying attention, until about a month ago most of these numbers checked in around 200-210 thousand each week. The last few weeks have consistently stayed at or above 220k, with 240k three weeks back. Given the manner and rate the current administration is thinning the herd of federal employees, expect to see this number stay on the high side for a while. The market is already pricing this into the equation, so we would likely need to see a 250-260k number drop before we'll see some serious price action as a result. After the UC number, we have Philly Fed Manufacturing Index (formerly a Red Folder report but it has been so scattershot for so long it has almost zero impact any more) and Current Account (our Import/Export Imbalance number) also a report no one pays a lot of attention to at the moment, in spite of all the tariff talks and threats that are ongoing. 10:00 a.m. brings us New Home Sales and the Conference Board Leading Index number, both of which are meaningless, and NatGas at 10:30. So today it's Unemployment numbers and then basically nothing after that.
FRIDAY: Asian/London Session: The very early numbers are not worth watching. At 8:30 a.m. the CAD has their Retail Sales numbers along with their New Housing Price Index number. It's all about Retail Sales, and the USDCAD over the last 3 months has averaged 20-25 pips during the hour after Retail Sales drops, so it's consistent enough to be worth watching. The EU Consumer Confidence number at 11:00 a.m. is late enough to be at or near the end of the trading day in the EU so you can safely ignore this one.
USA Session: One lonely Fed Clown (Williams) speaks at 9:05 a.m. and that constitutes the entirety of the US based news for the day. Fed Clown Chattering rules apply (and his speech is at the Biennial Macroeconometric Caribbean Conference, in Nassau, Bahamas, and is with audience questions expected, although the only question I would be asking at that snooze-fest would be "is the 2 for 1 Happy Hour started at the beach bar yet?" which is in fact an economic-based question, but likely not one he is capable of answering). So that's it for the day and the week. Enjoy your weekend and I'll see you back here next week.
Jeff
