Themes for the week and potential opportunities
Risk appetite into the week might be negatively influenced by disappointing Chinese data ( http://www.reuters.com/article/us-china-economy-activity-idUSKCN0Y506N ) issues over the weekend. Dax would be my preferred vehicle for trading (short) into this theme.
US: It’s a busy data week in the US. FOMC will be the highlight but a June hike is not in the cards. However, if the FOMC shows the committee less divided than the market expects, we could also get a USD pounce. Fedspeak will also be influential this week. Datawise, we have Empire State (Mon) expected to fall, NAHB homebuilder’s index (expected to rise) but it’s really the CPI (Tue) that will be watched closely and is expected to rise. Tuesday also bring housing starts and permits (+4.7% and +8.7% expected, respectively). Philly fed (Thur) also expected higher. So on balance, this week, the market is poised for positive US data output.
EU : Light calendar with account of the April ECB meeting (minutes, basically) out on Thursday.
JPN: advance Q1 GDP (Wed) is the focus and the market is poised for a bearish outcome. This would add pressure to MoF/BoJ.
UK: busy week ahead with CPI (Tue) expected slightly lower. More important is Employment data (Wed) expected to see a 5k increase in the claimant count, the ILO unemployment rate unchanged at 5.1%, and average weekly earnings growth slowing to 1.6% from 1.8% in 3m y/y terms. Retail sales (Thur) are expected rise. So on balance, a slightly negative expectation for Gbp.
Comm-Dolls: The minutes of the RBA (Tue) are unlikely to tell us anything we did not either hear at the time or read in the Monetary Policy Statement. Q1’s wage cost index (Wed) is expected to drop slightly, but employment data is expected to show a more modest rise of 4.2k after a 26.1k last time, though the unemployment rate is expected to go back up to 5.8% from 5.7%.
Loonie traders only have Retail Sales (Fri) to look forward to. Crude oil will decide the Cad’s fate the rest of the week.
NZD traders only have Tuesday’s GDT dairy auction to watch.
So going into the week I’ll be looking to play the bearish Gbp and bearish Aud themes, vs. USD strength and also Jpy strength (if we get some risk-off form China data).
The post Weekly Game Plan – 15.5.16 appeared first on www.forextell.com.