The Week Ahead – Yen and Cable

Previous week: 27 March 2017 – 31 March 2017

US Crude Oil Inventories—29th March 2017 10:30pm

Crude oil inventories rose another +867k barrels last week. Baker Hughes rig count rose by another 10 from 652 to 662. Will oil find resistance and head back down next week?

Canadian GDP m/m—March 31 2017 8:30pm

Canadian GDP came in at +0.6% on expectation of +0.3%. Previous month was +0.3%.

Coming week: 27 March 2017 – 31 March 2017

AUD Cash Rate—12:30pm 4 April 2017

Expectations are that the Reserve Bank of Australia will keep interest rates unchanged at+1.50%.

US crude oil inventories—10:30pm 5 April 2017

Will shale continue its production or will it show signs of stalling?

FOMC Meeting Minutes—6 April 2017 2am

The minutes for the March’s meeting should give us hints on the reason behind hiking Fed funds rate by a quarter point and whether more hikes are to be expected this year.

US non-farm employment change—7 April 2017 8.30pm

It is again the first Friday of the month which means US labour report day. 235k jobs were created in February and now 176k jobs is expected to be created in the month of March. Unemployment rate is expected to remain unchanged at 4.7%.

 

Trade Ideas

USD/JPY long?

USD/JPY is coming into a weekly support area at around 110. The next BOJ meeting is not until the 27th and 28th of April 2017. With hawkish stance by the Fed and BOJ holding pat for many meetings now, there is a divergence in monetary policy. The Fed wants to hike rates. The BOJ want to induce inflation (especially wage growth) and is still very far from their 2% inflation target. Watching for a potential opportunity to go long USD/JPY at 110 does seem favorable. Other factors have to be considered too. One being President Trump’s willingness to lower the trade deficit with Japan, the country the US has the second largest deficit with. Another being the potential incompetency of President Trump to enact change. This is evident in his (and Speaker Ryan’s) inability to pass the GOP’s healthcare bill which was supposed to replace Obamacare.

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GBP/JPY

Since mid December, GBP/JPY has been trading in a very narrow range and forming a descending triangle. Based solely on technical analysis, buying at 138 and targeting 148 would give good reward risk ratio. First point—the BOJ has not been able to create inflation, and is very far away from their 2% inflation target. Second point—UK’s macroeconomic data since the Brexit vote has not been all that bad. In fact they were pretty good.

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What I learned losing a million dollars

There are many books out there that teach people how to make money in the markets. However, there are almost no books out there that talks about losses. I had recently finished reading (20 more pages left to read) this book and it was worth every dollar spent and every minute spent reading.

 

 

 

 

 

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