Week ahead – Fundamentals 07 Nov 15

Posted On 07 Nov 2015
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Last week was all about the employment data on Friday
The figure was far higher than the anticipated 179,000 at 271,000 and the unemployment rate was also stronger at 5.0% as opposed to the forecasted 5.1%.
Risk and commodities fell hard as did bonds. The only beneficiary being the US$.
Market participants are now convinced the FED will hike in December. Fundamentally we are indifferent. The 0.25% hike if it does occur is the most anticipated hike ever, the first in nearly 120 months and fully priced in. Therefore long term traders may wish to slowly begin accumulating the least loved asset classes.
This week’s data is Europe focused with statements from both the BOE and the ECB.
USD: There is nothing of note for the USD until Thursday when we have the customary Unemployment Claims number expected at xxx from last month’s 276,000.
Friday is important. We start with Core Retail sales which excludes automobiles and is expected to grow at 0.4% from the previous month’s decline of 0.3%. Retail Sales is also expected to grow from the previous 0.1% to 0.3%.
PPI is anticipated at 0.1% from a decline of 0.5%.
lastly we have Consumer Sentiment estimated to grow from 90.0 to 91.2.
COT data shows that large commercials slightly increased their net short position in the US$ Index from 42,663 to 47,062. We therefore remain NEUTRAL.
EURO: A light week for the Euro but importantly we do have the ECB President speaking on Wednesday.
On Friday we have the German GDP number expected to fall from 0.4% to 0.3%.COT data for the Euro shows that large commercials substantially increased their net long position from 134,450 to 168,944. We therefore remain BULLISH.
GBP: Wednesday sees the release of the Average Earnings Index which is thought to grow from 3.0% to 3.2%.
This is followed by the Claimant Count Change estimated to grow by 16,000 far lower than last month’s growth of 46,000.
Most importantly we have the BOE governor speaking.
Very little large commercial activity in COT. Large commercials very slightly reduced their net long of 7,695 to 7,730. We therefore remain BEARISH.YEN: Only two newsworthy items for the Yen this week.
On Monday we have the Current Account figure thought to fall from 1.59T to 1.50T.
On Wednesday we have Core Machinery Orders expected to show a substantial rise form a fall of 5.7% to a rise of 3.4%.
COT data shows that large commercials increased their net long position from 55,204 to 65,127. We therefore remain SLIGHTLY BULLISH.AUD: Monday sees the release of the NAB Business Confidence number which is expected to be xxx from last month’s 5.
On Wednesday we have the Employment Change figure which is forecast to rise by 15,200 from last month’s negative 5,100.
We also have the Unemployment rate thought to be unchanged from last month’s 6.2%.
COT data shows that large commercials increased their net long position from 49,145 to 59,495. We therefore alter our position from NEUTRAL to SLIGHTLY BULLISH.

CNY: two items for the CNY.

On Monday we have CPI expected to show a small decline from 1.6% to 1.5%.
On Wednesday we have Industrial Production which is thought to show a small rise from 5.7% to 5.8%.There is no COT data for the CNY.
S&P500: Last week large commercials continue to increase their net long position with a rise from 187,506 to 226,894. This is at a 52 week rolling high. We therefore continue to be BULLISH.GOLD: Large commercials reduced their net short position from 165,848 to 124,988. This is the first time in six weeks that large commercials reduce their net short position which is slightly positive but is not large enough for us to alter our view. We therefore remain BEARISH.

SILVER: Last week saw large commercials very slightly decreased their net short position from 69,373 to 67,141. We remain BEARISH.THOUGHTS FOR NEXT WEEK

Last week’s US employment data has everyone now concerned about a December FED rate hike. This will drive sentiment next week.
The question is how much is already priced into asset values.
COT data would suggest that risk as measured by the S&P has further upside potential and that commodities whilst weak may be coming close to their lows and therefore for traders with a view longer than a day it may soon become a buying opportunity.
For timely, accurate trade signals follow our STTS service.For those who want to join the lucky ones receiving real time, accurate and 100% honest and transparent trade signals visit and subscribe here.Stay nimble. Good luck trading.


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