Weekly Game Plan – 31.1.2015

Themes for the Week & potential opportunities
– Chinese PMI (Mon) and US ISM (Wed) could ruin the recent rise in risk assets. The recovery is under way, thanks to BoJ and Crude, but can it last? I favour cautious longs on Dow/S&P for now, keeping a close eye on Crude as a driver.  AudJpy and CadJpy remain favoured FX plays on the risk on/off theme.
– BoE February Inflation Report expected  to be dovish and revise inflation and growth forecasts. However, the market appears to have digested a fair amount of negative news so there’s risk of a short squeeze. Gbp is still rather weak going into the week.
– US NFP will be the market’s main focus (Fri), but FOMC is most likely not going to fret over slower job  growth. Furthermore, speeches by Fed’s George (Tue) and especially Fischer (Mon) will offer further guidance in anticipation of Friday’s number.
– RBA will meet and it will be difficult for Stevens to remain steady and confident in the current environment. No cut is expected, but dovish rhetoric should be the base scenario.
– German Unemployment & Cad Unemployment are secondary but still worth watching. Especially Cad Unemployment (Fri) which along with NFP is important for the UsdCad short trade. I still favour UsdCad shorts.

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