Weekly Game Plan 6.3.17

ECB, RBA & NFP the highlights of an otherwise calm week.

USD: We are in Fed blackout mode now ahead of the March 15 FOMC decision – with the markets now pricing in a 90% chance of a rate hike. In this light, unless NFP is dismal, the markets will not care all that much. On the other hand, good numbers will seal the deal. Nothing else on the calendar can challenge the bullish USD view.

EUR: Enter the ECB. Given recent data output, upward revisions to growth forecasts are likely and a turn toward a more neutral if not slightly hawkish tone from Draghi is logical. However, we might very well get “uncertainty” mentioned, due to the French & Dutch elections. Obviously no change to policy is expected.

GBP: Not too much to look out for. MPC’s Hogg speaks (Mon), UK Chancellor Hammond will deliver his first spring Budget (Wed), Manuf. PMI is out (Fri).

CAD: Soft wage gains, export weakness, and a bubble in the housing market have kept the BoC cautious. We get updates on these sectors this week: Trade Balance & Ivey PMI(Tue), Housing Starts/Building permits (Wed), Employment (Fri).

Asia: China reports Trade data (Wed) and CPI (Thurs) which can influence global risk appetite (via indices & Jpy pairs) as well as AsiaPac FX (Aussie, Kiwi).

The RBA also meets (Tue) but Retail Sales (Mon) will make things interesting leading into the event. Governor Lowe was relatively hawkish last time, but recent data has been mixed with a downwards tilt. With this new information, the RBA’s tone may be more cautious. Retail Sales will play into this picture.

Nzd only has the GDT Auction on Tuesday, around 3 PM CET.

Going into the week, I remain bullish on Indices & AudNzd. Euro longs are also back in vogue, against everything except USD. Cad remains weak-ish vs. Usd also.

Good Luck!

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