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Weekly Fundamentals : 12 Sept 2015
THE WEEK AHEAD FUNDAMENTALLY – KEY DATA TO WATCH OUT FOR
Last week saw little in the way of any sizeable moves for the products we follow as market participants await this Thursday’s FED decision on rates.
The market is still wholly undecided what the FED will end up doing which makes it interesting.
It is our view that this long awaited, much talked about, miniscule 0.25% hike has no bearing on the direction of the markets except in the very short term when volatility will be extreme. We will witness price gaps both on the up and the down resulting in all stops being taken out.
Our advice therefore is caution for those with tight stops.
USD: A full and very busy week for the USD.
On Tuesday we have Core Retail Sales which is all sales minus automobiles and is expected at 0.1% a drop from last month’s 0.4%. We also have Retail Sales which includes automobiles which is expected to come in at 0.4% down from the previous month’s 0.6%.
On Wednesday we have both CPI and Core CPI which excludes food and energy. The former is anticipated at -0.1% down from 0.1% and the latter unchanged at 0.1%.
Thursday is a massive day.
We start with Building Permits at 1.15Mn which is followed by the usual Unemployment Claims figure estimated at 276,000. We then have the Philly FED Manufacturing Index expected at 6.1 down from the previous month’s 8.3.
The come the big ones starting with FOMC Economic Projections which outlines the FED’s views on inflation and growth for the next two years. We then have the FOMC Statement followed by the long awaited FED Funds Rate decision which is expected to show an increase from 0.25% to 0.50%.COT data shows that large commercials slightly increased their net short position in the US$ Index from 57,439 to 59,722. We therefore maintain our position of SLIGHTLY BEARISH.
EURO: Only one item of note for the EURO this week which is the German ZEW Economic Sentiment number on Tuesday expected at 18.3 which is a significant fall from the previous figure of 25.
COT data for the Euro shows that large commercials slightly increased their net long position from 88,343 to 108,445. We therefore maintain our position of SLIGHTLY BULLISH.
GBP: Tuesday sees the release of CPI expected to come in at 0.0%, a fall of 0.1% from the previous reading.
On Wednesday we have Average Earnings Index which measures the change in the price businesses and the government pay for labour, including bonuses expected at 2.5% a slight increase from 2.4%.
We also have Claimant Count Change which measures the change in the number of people claiming unemployment related benefits during the previous month. This is expected to show a fall of 5,100.COT data for GDP shows that large commercials nearly doubled their net long position from 16,672 to 30,908. We therefore amend our stance from SLIGHTLY BULLISH to BULLISH.
YEN: On Monday we have the BOJ Monetary Policy Statement.
On Tuesday we have the BOJ Press Conference.
Wednesday sees the release of the Trade balance number estimated at -0.35T.
On Thursday the BOJ governor speaks and we have the Monetary Policy Meeting Minutes.COT data shows that large commercials continued to reduce their net long position from 28,503 to 21,102. This is the third week in a row that they continue to reduce their net long position so we maintain our BEARISH
stance.
AUD: On Monday we have the RBA Monetary Policy Meeting Minutes.
On Thursday the RBA Governor speaks.COT data shows that large commercials very slightly increased their net long position from 82,795 to 84,684. We therefore continue to remain BULLISH.
CNY: Tuesday sees the release of the Trade Balance number thought to be a positive 48.6Bn up from last month’s 43.0Bn.
On Wednesday we have CPI which is expected to rise from 1.6% to 1.9%.
There is no COT data for the CNY.
OTHER COT DATA OF NOTE:
GOLD: We have been bearish for the last two weeks and justifiably so. This week we see that large commercials decreased their net short position slightly from 69,088 to 55,979. We therefore change our stance from BEARISH to SLIGHTLY BULLISH.
SILVER: We have been bearish for two weeks now and like gold we have been justified. Unlike gold however we have to remain bearish as this week we see that large commercials have slightly increased their net short position from 22,566 to 25,560. We therefore remain SLIGHTLY BEARISH in the very short term.
THOUGHTS FOR NEXT WEEK
This week is all about the FED and the Fed Fund Rate. Will they or will they not? That is the question.
The market is ever so slightly skewed toward the view that they will raise rates.
One thing is for certain stops will be taken out, traders will lose money, the dust will settle and normality will resume.
Please have a read of our latest MACRO piece which can be found here and outlines our latest thoughts on this impending rate hike.
For those who want to join the lucky ones receiving real time, accurate and 100% honest trade signals please visit and subscribe here.Stay nimble. Good luck trading.
CHECK OUR INTERACTIVE ECONOMIC CALENDAR FOR FULL LIST OF UPCOMING DATA RELEASES
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