Weekly Game Plan 23 Mar 20

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

The news flow concerning the coronavirus pandemic is fluid, along with policy actions, and as such markets will likely remain prone to large swings in either direction, although a risk-off bias remains. Central banks are trying to ease tensions in the credit markets, while politicians are attempting to aid their economies (which they have closed down in order to contain the virus spread).
What will eventually turn the tide? A vaccine, or some cure for the covid for sure! But until then, and until there is more certainty and confidence on when the crisis will fade and how the global economy will look once it does, the pattern of deep sell offs of risk and vicious technical corrections will continue.

Keep positions small and manage your trades actively during this time.

Themes for the week:

• Credit market stress and USD demand: desperate companies and banks around the world have been stumping up big premia in recent days in their rush to buy greenbacks -- for trade, debt repayments, or just to hold. Central banks are trying to ease the tension, but keep an eye on credit.
• Covid Spread: markets were spooked once again on Friday as lockdowns started to be implemented in the US. The spread and the death toll of the Covid will continue to attract attention.
• PMIs: these timely indicators will reveal current sentiment in Europe and the UK. This is forward-looking data and the markets will pay close attention. We will now see how much bad news the market has discounted vs. data.
• EM stress: the strong dollar, a dire global economic outlook, tumbling oil prices thanks to waning demand and a Russia/Saudi Arabia production spat as well as rising borrowing costs are taking a huge toll on Emerging Markets.

Data in the week ahead:

• EU PMIs (quite important, should be dismal)
• UK PMIs (should also be dismal)
• US PMI (Idem)
• GER IFO (Idem)
• UK CPI (prices could jump as PMIs were showing increases)
• BOE Decision and statement
• US unemployment claims (could skyrocket..)
• US PCE

On the Radar:

While 2-way trading is key in these conditions, I maintain a broad bearish bias on indices for now, and also on Crude. I stil like USD strength vs. Eur and Gbp especially, but there are curious counter-trend moves in Cad vs. Chf and Jpy. Once again, another week full of opportunities. Just remember to keep your position sizes small, and cast a wide net.

Weekly Game Plan 9 Mar 20

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan

Remember that US & Canada are shifting to Daylight Savings, so depending on where you live it will appear as if North America wakes up 1 hour earlier than usual and data is issued 1 hour earlier.

Over the weekend China issued a gloomy trade report which is likely to reinforce fears that economic growth halved in the first quarter to the weakest since 1990. Beyond that, the Covid-19 continues to advance across the globe, with South Korea, Italy, Germany, Greece, Iran and even the US showing more cases. The market will be keeping a close eye on the credit markets, as stress in high-yield credit is the most unwanted side effect of slowing global growth, weak demand and rapidly rising investor fear.
Heightened volatility is the name of the game.

Themes for the Week:

Covid-19: the virus is the main protagonist and will continue to drive markets in the week ahead, as it spreads across the globe.
Credit Market Stress: after the REPO issues, now Credit Default Swaps are soaring (Especially in Europe) as the Covid-19 has added stress to an already stretched market. One instrument to keep on your watchlist is PHIYX (Pimco High Yield Fund) which is linked to the credit market and will potentially anticipate the moves in SP500.

ECB: the ECB meeting this week should generate some nice volatility as markets are not sure what to expect. A 0.10% cut is priced in by markets, but not by analysts who are not convinced the ECB will cut rates. Whenever there's uncertainty, there's room for volatility.
Fiscal Support: just as we noted last week, more governments will be going on spending sprees to support the economy. These measures are inflationary in the longer term, and at best can give some confidence in the short-term.

Data in the week ahead:

• UK GDP m/m
• UK Annual Budget
• US CPI
• ECB Decision

On the Radar:

I remain bearish on Dax/Eurostoxx and Crude. I am cautiously bullish Gold. I'm bearish USD and CAD vs. Jpy and Chf.
Please take care of yourselves and your family. Prevention is the best medicine against the Covid-19 so be vigilant but do not panic. The mortality rate remains around 3% at best. As Dalio said recently "The most important assets that you need to take good care of are you and your family. As with investing, I hope that you will imagine the worst-case scenario and protect yourself against it. "

Weekly Game Plan 1 Mar 20

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan

China manufacturing PMI plunged to 35.7 from 50 in January, the fastest pace monthly contraction on record. While non-manufacturing PMI plunged to 29.6 – the lowest reading on record.  The extremely weak PMIs will shock markets on Monday morning and the fact that China reported the terrible numbers will also be surprising to many.

Be aware of emergency central bank intervention, which could keep volatility elevated. On Friday, stocks rallied to cut more than half the extreme losses in the last hour of trading following hints from Fed Chair Powell that the Fed was "ready to act as appropriate".

Themes for the Week Ahead:

• Inter-Meeting FED Reaction:  FED's Powell issued this brief statement on Friday. This seems like an anticipation of some kind of imminent action on their behalf. The markets do expect the FED to step in and ease policy with emergency rate cuts.
• COV-19 and PMIs: markets are awaiting Chinese and US PMI data this week, in order to gauge the initial impact of the COV-19 on the economy. Over the weekend, China issued the official numbers which were dismal: official manufacturing PMI at 35.7 vs 50.0 in Jan, market was expecting 46; Non-mfg PMI at 29.6 vs 54.1 in Jan, lowest on record.
• Fiscal Spending: China and South Korea area already 2 nations that have started fiscal stimulus (government support to the economy) to counter the COV-19 effects. Pressure is mounting in Germany of all places, to do the same. Fiscal stimulus will definitely be a theme going forward, and should be beneficial to risk-assets including stocks and commodities, as well as inflationary.
• OPEC: more cuts will likely be discussed this week, with Crude tumbling over 30% since the start of the Year.
• Super-Tuesday:  14 US states go to the polls on Super Tuesday - the largest single-day delegate haul in the nomination fight. Investors will be looking to see whether progressive Senator Bernie Sanders consolidates his lead (which would be negativefor risk assets and the USD) or if moderates such as former Vice President Joe Biden or former New York Mayor Michael Bloomberg can make inroads. While investors have been more consumed by the coronavirus developments, election-related headlines have jostled some parts of the market.
• Central Banks: beyond the expected FED emergency cut, this week we will see whether Bank of Canada and RBA are willing to ease policy. BOC is expected to ease, but the RBA would surprize the markets if they were to do so.

Data in the week ahead:

• CNY Caixin PMI (will be influential)
• US ISM PMI (could be better, given rise in Empire State & Philly Fed)
• RBA Decision (markets are expecting no change & dovish commentary...but there is a chance of a surprize rate cut given the Cov-19 impact on markets)
• AU GDP Q/Q (no real bias, will depend on RBA slant)
• BOC Decision (rate cut expected as Crude Oil is down 30% from earlier in the month, lower GDP, COV-19 issue)
• US ISM NMI (will depend on ISM Manuf.)
• OPEC Meeting
• AU Retail Sales
• Cad Employment
• US NFP

On the Radar:

Volatility is expected, so my forecast is based on the continuation of risk-off, along with last week's performance. I remain short on Dax moreso than US equities, I remain biased short on Crude, I remain short on Aud/Nzd/Cad vs. JPY and EUR

Weekly Game Plan 24 Feb 20

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan

Uncertainty on how the virus will impact global growth will continue to dominate investor sentiment in the week ahead.

China reported a sharp fall in new deaths and cases of the coronavirus on Saturday, but world health officials warned it was too early to make predictions about the outbreak as new infections continued to rise in other countries. The numbers surged elsewhere, though, with outbreaks worsening in South Korea, Iran, Italy and Lebanon.

Themes for the week:

• Coronavirus: traders are watching the spread in the virus around the world. Despite the slowdown in cases in China, around the world (Especially in South Korea and Italy) there has been an explosion in cases. The focus will return to the impact on global growth.
• USD: ISM and Markit PMIs have hit the USD. HOwever, the impact may be temporary.
• Emerging Markets: the IMF is busy helping Argentina, Lebanon, Egypt, Ukraine to fight their financial crisis. The more the USD rises, the worse things will get.

Data in the Week ahead:

• NZD Retail Sales
• GER IFO
• US GDP Q/Q
• CAD GDP m/m

On the Radar:

Going into the week I'm cautiously bearish on equities (Dow, Dax, Eustxx), I remain bullish on Gold especially (Silver to a lesser extent); I remain bearish on Aud, Nzd and Jpy but there isn't really anything strong to place them against...so I'll wait to see what happens to the USD (if it turns back up or not) and in the interim use CAD as second best.

Weekly Game Plan 17 Feb 20

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan

Remember that Canada and the US are out on Monday.
With no data or news from the weekend, it should be a quiet start to the week. Focus will then turn back to the coronavirus, and to the data dump this week, especially from the UK and EU given the Euro's recent drop.

Themes for the Week Ahead:

• PBOC Stimulus:  with the Chinese economy slowing down due to the coronavirus, the PBOC will keep stimulus measures very much alive. Expect spending plans from the government as well.
• Recovery of not: as the growth in the coronavirus slows, risk-assets should recover swiftly. Crude Oil has already begun the ascent, and copper should follow. Stocks continue to soar.
• Euro fallout: political chaos in Germany, plus weak data, hedging pressures and falling exports to China have hit the Euro hard. More pain to come this week.

Data in the Week Ahead:

• RBA Minutes
• GER ZEW
• UK Employment Change
• AU Wage Price Index
• UK CPI
• CAD CPI
• FOMC Minutes
• AU Employment
• UK Retail Sales
• EU & UK PMIs
• Cad Retail Sales

On the Radar:

I continue to remain bullish on indices (with a tad of caution since last weeks' performance wasn't  stellar), I'm flipping to bullish on Crude Oil for the first time in weeks; I'm bearish on Euro and Chf vs USD & GBP

Weekly Game Plan 10 Feb 20

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan

Latest batch of economic data, including ISMs and NFP, suggested that US economy is in healthy shape. The US Dollar was the leader last week, and will likely continue to be in the spotlight. The main driver this week will continue to be the coronavirus.  The spread of the virus and the measures taken to contain it will likely be closely monitored by markets, as the short-term impact on global growth might be significant.

Themes for the Week:

• Coronavirus: Recent days have seen an unremitting flow of dire headlines as supply chains from New Zealand to the United States felt the impact of a paralysed China. Toyota and Honda are suspending production in China, Hyundai has halted work in South Korea, airlines are grounding flights and reducing staff, and central banks are easing policy.
• Powell Testimony: the text has already been released. Given Powell and his Fed crew have been consistent in recent messaging that there is no hurry to resume rate cuts (or hikes) and that they see the economy in "a good place" one topic that might generate fireworks in his appearances on Tuesday and Wednesday is "repo".  Other Fed speakers will include San Fran’s Daly and Philly’s Harker (Monday), Daly (again) with St. Louis President Bullard and Minneapolis President Kashkari (Tuesday), Harker again on Thursday, and then Cleveland President Mester on Friday.
• RBNZ, Riksbank decisions, both expected to remain on hold.

Data in the Week Ahead:

• CNY CPI
• UK GDP Q/Q
• RBNZ Decision
• Powell Testimony
• US CPI
• US Retail Sales

On the Radar:

The coronavirus coming in & out of focus is keeping things volatile in risk-assets, but given the favourable macro environment (and the coming stimulus from PBOC), I continue to be bullish on Dow, ASX, China equities and will look at exaggerated fear from the coronavirus as opportunities to buy dips.

The same reasoning goes for copper & crude, which are currently taking on water and are bearish in the short-term, but will likely rebound when concerns fade.

In FX, I like USD strength against almost anything.

Weekly Game Plan 3 Feb 20

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

Fear of China’s coronavirus outbreak was the major theme in the global markets last week. As we speak, the number of confirmed cases is close to 12000. While the majority of the infected in China, the virus has spread to at least 23 countries already. The peak should be around Feb 10th, based on latest estimates. Global equities suffered while safe haven flows pushed bond yields sharply lower. Evidently, AUD,NZD,CAD were the weakest in FX while JPY, CHF and GBP were the strongest last week.


This virus is by no means as lethal as SARS, but it spreads much quicker and the economic impact will be more severe. That is the main preoccupation which is sending markets into risk-off mode. We have a decent week ahead with lots of news, a Central Bank decision and NFP to top it off.

Themes for the Week:

• CoronaVirus: Some 60 million people at the centre of the outbreak are living under virtual lockdown. A shock to China's economy this quarter, which then reverberates through global supply chains, is a foregone conclusion. It's just that no one can yet say how deep. Watch the Shanghai exchange when it opens up Monday...
• NFP: Friday's non-farm payroll data will show how the U.S. economy fared in the first month of the new decade. The report is expected to show a pickup from December, with a Reuters poll forecasting 156,000 were added, from 145,000 the month before.
• RBA Decision: no cut is the baseline scenario, but growth projections should be lowered. The market is expecting a dovish statement.
• Volatility is back: traders should get ready for more volatile markets, which is good for trading but seems to always catch the markets off guard.

Data in the Week Ahead:

• Caixin PMI
• US ISM Manuf & NMI
• RBA Decision
• NZD Employment Change
• ECB Lagarde Speech
• AU Retail Sales
• RBA Lowe speaks
• RBA Minutes
• NZD Inflation Expectations
• CAD Employment
• US NFP

On the Radar:
I still have ASX200, Dow, Dax biased short, Crude biased Short, Gold biased long. In FX, CHF,JPY, GBP strength vs. AUD,NZD,CAD weakness.

Weekly Game Plan 20 Jan 20

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

With the US-China trade deal in the rear-view mirror and the tensions in Iran fading from the market’s radar, risk-assets have been pushed higher on the combination of fiscal stimulus and monetary stimulus. The USD closed the week strong across the board, while GBP attracted selling on BOE easing bets. The focus this week will be on central banks (BOJ, BOC, ECB, Norway CB), key data, the Davos summit and US corporate earnings.

Themes for the Week Ahead:

• Central Banks: Japan on Tuesday, Canada on Wednesday, Norway and the euro zone on Thursday. On Friday, China sets loan prime rates. Unless there are any surprize moves, expect the focus to be on the 2020 forecast.
• Davos: the World Economic Conference will see top policy makers and fund managers meet and ski in Davos. Of course the reflectors will be pointed on Trump and just how disruptive he will be. Comments will be watched.
• PMIs: once again we get influential data from the EU and the UK, which will be closely scrutinized.
• Earnings: Netflix and Disney are but two names reporting earnings this week.

Data in the week ahead:

• Bank of Japan decision
• UK Employment Change
• CAD CPI
• Bank of Canada Decision
• AU Employment Change
• ECB Decision
• NZ CPI
• EU PMIs
• CAD Retail Sales

On the radar:

During such an influential week for the markets, what is in vogue now may not be in vogue by Friday. So with caution, I remain bullish on US equities and USDJPY, bearish on EUR, GBP and AUD vs. USD and CHF.  For the more commodity-inclined, Palladium and Platinum remain in a strong uptrend also.

Weekly Game Plan 6 Jan 20

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

Welcome to 2020 trading. Markets were taken by surprise on Friday when news broke that the top Iranian military commander was killed by in Iraq by US bombs. Markets are now bracing for a possible retaliation by Iran against the US. Equity markets and other risk assets moved lower while oil along with safe-haven assets such as gold, bonds and Yen moved higher. Furthermore, concerns over the US economy were heightened by the worst ISM Manufacturing reading in a decade.
The coming week might prove to be volatile with whipsaw price action, as many participants may choose to sit out this first week of trading and wait until after NFP to start rolling out positions.

Themes for the Week:

• Iran Retaliation: the markets are currently NOT expecting Iran to do anything that would spur a serious military clash with the US. So it would seem that any further tensions could catch traders off-balance.
• US/China Trade War: markets are pricing in a Phase-1 deal by Jan 15th. For now, this is on the back burner.
• Brexit: UK lawmakers reconvene on Jan 7 and will debate the divorce deal PM Johnson has agreed with Brussels. The bill goes to parliament's upper house on Thursday and should allow Johnson to fulfil his pledge to "get Brexit done" by Jan. 31. In the meantime, GBP might start to react to normal macro data releases again.
• NFP-Friday: as usual, the health (or lack thereof) of the US labour market will be in focus and after a worse ISM employment component, traders are bracing for worse data.

Data in the Week Ahead:

• AIG PMI
• ISM Non-Manufacturing
• AU Retail Sales
• Cad Employment Change
• US Non Farm Payrolls

On the Radar:

The thematic trades would be Jpy long vs. Eur and Gbp and Gold longs. However, if tensions cool off there may well be a pickup in risk assets with stocks, Aud & Nzd returning bid. Best be prepared for either contingency.