US Chicago PMI

Today on Tuesday 31st of January 2012 at 9:45 EST (15:45 GMT ) the Chicago PMI figures were released from the USA. This economic indicator has rebounded nicely from may but today it did come out lower and actually did cause a bit of risk off. This was unexpected because in many cases the market has not reacted predictably on this news releases, even when there are significant deviations.

Here are the figures:

US Chicago PMI
Estimates: Median: 63.0 Average: 62.6 Range: 59.0 to 67.0
Actual: 60.2 Prior: 62.2 No Revision


It appears as the market waits for NFP it is content to run to the extremes intraday as the market had rallied from the New york session the previous day, thru asia and europe just to sell off again when NY opened again. Here is the 1 minute chart of the EMini S&P 500 future. There is a blue line marked at 9:42 est which is where this data is released to special subscribers before the general release 3 minutes later:

This is a 10 minute chart which shows the EMini S&P 500 future rally from the day before into this news:

Next is the 30 second chart of the USDJPY. This pair usually does not move many pips but it did go in the direction of the deviations:

Now the CADJPY 30 second chart, which had a better move and follows the main stock indices like the S&P 500 very well:

However remember that there was Canadian GDP at 8:30 est about 75 minutes before this news, so the Canadian Dollar was still be affected by that. Here is a 1 minute chart of the CADJPY Forex pair which shows the whole move on the pair thru the Canadian GDP and the US Chicago PMI. Luckily the weaker Canadian GDP agreed with the lower US Chicago PMI figures both in terms of the Canadian Dollar and the risk-off price flow:

Canadian GDP - Lower than expected with decent move given some time

Today, 31st January 2012, at 8:30 EST (13:30 GMT) the GDP figuresw were released from Canada. They did come out lower at -0.3% on the MoM which is a moderate deviation. There is not really much history of a 0.3 deviation. In the past deviations of 0.1 or 0.2 have not worked well, but deviations of 0.4 have been tradable, so this was in between and the price response on the USDCAD forex pair was moderate for the short term spike, but given some time it did run on for more pips.

Here is the data:


Canadian GDP MoM
Estimates- Median: +0.2% Average: +0.2% Range: -0.2% to +0.3%
Actual: -0.1% Prior: 0.0% No Revision

Canadian GDP YoY
Estimates- Median: +2.3% Average: +2.3% Range: +2.2% to +2.5%
Actual: +2.0% Prior: +2.7% No Revision

Canadian Industrial Product Price MoM
Estimates- Median: -0.1% Average: 0.0% Range: -0.5% to +0.5%
Actual: -0.7% Prior: +0.2% Revised: +0.3%

Canadian Raw Materials Price Index MoM
Estimates- Median: 0.0% Average: +0.2% Range: -1.0% to +2.3%
Actual: -2.4% Prior: +3.8% No Revision

Here is the 30 second chart of the USDCAD forex pair, notice the 20 pip spike, then chopped around for half and hour before pulling back a bit then shooting higher:

Here is the 5 minute chart of usdcad which shows how given time the pair did move quite well for about 70 pips:

Also included in a CADJPY 1 minute chart which shows the pair thru the rest of the session which also had US Chicago PMI later which added to its move down:

German Unemployment - Leaked Perhaps but good follow thru

This morning at 3:55 EST (8:55 GMT) the Unemployment data from Germany was released. It was a better print and with last night's agreement of Eurozone members at their latest meeting and also reports of a increased take-up by european banks of the next LTRO, the markets have been risk on.

Here is the data:

Germany Unemployment Change
Estimates- Median: -10k Average: -9k Range: -30k to +10k
Actual: -34k Prior: -22k Revised: -25k
Germany Unemployment Rates (s.a)
Estimates- Median: 6.8% Average: 6.8% Range: 6.6% to 6.9%
Actual: 6.7% Prior: 6.8% No Revision

The German DAX stock index had been selling off during the beginning of the european session, while the commodity currencies were rallying and the EURUSD and GBPUSD where holding near their swing highs for the overnight asian session.

Here is a 1 minute chart of the DAX, notice how it started rallying 3 minutes before the actual release:

Next is the 10 second chart of the EURUSD, the pair took out its swing highs from the Asian Session just below the 1.3200 round figure handle, making a swing low heading into 8:55 gmt:

Also the 5 minute chart of the EURUSD to show a bit more perspective of the overnight move leading into the European session:

US GDP Advanced for Q4 2011 - High Expectations slight disappointment but good moves

This friday January 27th 2012 at 8:30 EST (13:30 GMT) the Advanced or 1st reading of GDP for Q4 2011 was released from the USA. The expectations for this were quite high, considering that the Final Reading for Q3 was +1.8%, to jump to +3.0% is nearly doubling growth. As the expectation was quite high some probably considered that a small miss of the expectation would not cause a major sell off, but in the end it did provide a decent move down, although later on in the session things rebounded and there was a rally into the close for the week. Alot of these was do to good headlines about a deal on the deal with PSI about a haircut on Greek Debt, that an agreement was close.

Anyway here is the data:

US GDP QoQ (Annualized) Advanced Q4 2011
Estimates- Median: +3.0% Average: +3.0% Range: +2.4% to +4.5%
Actual: +2.8% Prior: +1.8% No Revision
US GDP Price Index
Estimates- Median: +1.9% Average: +1.7% Range: +0.6% to +2.6%
Actual: +0.4% Prior: +2.6% No Revision
US Core PCE QoQ
Estimates- Median: +0.9% Average: +1.1% Range: +0.8% to +2.4%
Actual: +1.1% Prior: +2.1% No Revision
US Personal Consumption
Estimates- Median: +2.4% Average: +2.4% Range: +1.2% to +3.6%
Actual: +2.0% Prior: +1.7% No Revision

Here are some charts then, first is the Emini S&P 500 Future 1 minute chart:

Also another option for stock index futures is the DAX, or the FTSE, any major index will move with the EMini and DOW on US news. I like the DAX:

In Forex the CADJPY follows the Stock Indices quite well. Any Commodity Currency (AUD,NZD,CAD...or even ZAR or NOK probably will have to review those charts) versus the Japanese Yen will generally follow the stock indices, sometimes Canadian News comes out at the same time as US News so you have to watch out for that. This is the 10 second chart of the CADJPY:

Last month the USDJPY did not follow the lower print and actually moved up (only a small amount of pips). This time it did follow everything down, but normally this pair is avoided since it really doesn't move that much most of the time. Here is the 30 second chart of the USDJPY forex pair:

Actually it was risk-off across the board the USD dollar rallied as well with AUDUSD, NZDUSD, GBPUSD and EURUSD selling off. Although the JPY did appreciate more than the USD on this risk-off move as can be seen by the USDJPY chart above. Here are 2 more charts of AUDUSD and NZDUSD, this time 5 minute chart and you can see more price action. Later on in the US Session as mentioned the deal on PSI haircuts looked close also 90 minutes after GDP the University of Michigan Consumer Sentiment figures were released at 10:00 EST (15:00 GMT). This data has rebounded nicely since some bad prints during August 2011. Now the figure is coming back up to 2 year highs. Here is that data:

US U. of Michigan Confidence
Estimates- Median: 74.0 Average: 74.3 Range: 72.5 to 76.0
Actual: 75.0 Prior: 74.0 No Revision

Finally these 2 charts are GMT+2 and also the Green line at the top is the R1 pivot, which AUDUSD tagged perfectly and sold off from, while NZDUSD overshot a bit. The Red Arrow is the release of GDP while the Blue Arrow is the release of U. of Michigan Confidence. The NZDUSD found support right on the Yellow horizontal line which is the Daily Central pivot:

EIA Natural Gas Storage - Lower Print sees only brief uptick

This Thrusday January 26th at 10:30 EST (15:30 GMT) the Natural Gas Storage Change figures were released from the EIA. There was a lower print, which would have normally caused a big spike up in the Natural Gas futures. However Natural Gas is being driven by other factors at the moment and is not really following this data. A much warmer winter means Natural Gas storage is much higher than previous years, as well as the fact that due to phracking techniques there is now much more available in the USA.

On January 23rd Chesapeake announced they would be scaling back their Natural Gas operations as the price of Natural Gas has been trending lower and is nearly testing 10 year lows made around September 2001. This caused Natural Gas to rally and it could be a major turning point for this commodity. Despite Natural Gas selling off on a lower number, all in all the price has been moving up since the 23rd Chesapeake announcement, and should soon retest the recent highs.

Here is the data:

EIA Natural Gas Storage Change
Estimates- Median: -175 Average: -173 Range: -194 to -140
Actual: -192 Prior: -87 No Revision

Here is the 1 minute chart of the NQ Natural Gas Futures, this chart does not have a decimal place since it is from a spreadbettor broker:

Next is the 2 minute chart of Chesapeake which does seem to follow Natural Gas better than other energy stocks:

New Zealand Interest Rates - Unchanged again

Tonight at 15:00 EST (20:00 GMT) the interest rates from New Zealand were released. The Royal Bank of New Zealand (the RBNZ for short) has been on hold since March 2011, when they cut 0.5% to 2.5% in response to the earthquake to help things recover. The RBNZ had said they would hike this rate back up as the rebuilding progressed. Since then however the global economy has weakened and New Zealand funding costs have gone up in response the debt crisis in the Eurozone.

There was no hike but RBNZ's Governor Bollard indicated that the domestic economic growth had been mild and inflation was contained and stated the obvious situations overseas. There had been some expectations the RBNZ would hike in mid-2012, this had been pushed out from March 2012 during the December statement, but the NZDUSD still rallied because it still seemed like this was on the horizon. If anything today's statement seems like this hike might be put off even more, if not turning into a possible cut at some point. OF course it depends how situations develop, but Isreal, Thailand & the Philippines have cut recently. Hungary did not hike when they were expected to. Australia is expected to cut in February.

Despite all this the NZDUSD did rally 60 pips, but this was due to the fact that Ben Bernanke was still speaking at his press conference, and all the markets were rallying to what appeared to be some hint of QE3 for March.

Here is a 10 second chart on the NZDUSD forex pair:

and here is a 1 minute chart showing the extension of this run-up after the news:

Fed Interest Rate Statement, FOMC Meeting Minutes & Feds Press Conference = Risk On Rally Extension

Today January 25th at 12:30 EST (17:30 GMT) the Fed released their interest rates which were left unchanged as predicted. They also released a Statement, which basically push the forecasted date of their 'exceptionally low fed funds rate' from mid-2013 last time to the end of 2014 with this statement, see the statement differences side-by-side here. This was a bullish statement which lead the markets to rally. As can be seen in the statement little else changed other than slight reordering of the phrases, other than this key statement.

The markets took off, all risky assets rallied, only space to focus on a few. First the 10 second chart of the EURUSD:

and a 30 second chart which shows the rally extending up to 1.3100 until 14:00 when the FOMC Meeting Minutes were released:

Here is the 3 minute chart of the EMini S&P 500 :

So 1.5 hours after this initial statement the FOMC Meeting Minutes were released, of course there was alot they discussed. What stood out at the time was that 3 members were discussing hiking rates this year as well as the Fed adopting a specific inflation target. There were also revisions to their forecasts for GDP, PCE Inflation and Employment. The EURUSD took a 50 pip dive from the 1.3100 round figure based on this news.

Here is a 10 second chart of the EURUSD based on this response to the FOMC Meeting Minutes:

Then 15 minutes later the Fed's Press Conference started where Ben Beranke answered questions of journalists. Many things were said and it went on for some time, see more here, here, here & here, New Zealand Interest Rates and statements were released at 15:00 while this Press Conference was still going on, so it was a bit of an overload. Basically the Fed sounded more upbeat, that they will continue their monetary policies even if things improve and giving some hint of QE3 for possibly March. Basically the Fed has their foot on the pedal. The dip seen from the 14:00 FOMC minutes reversed and even higher highs were made accross all the markets.

There is a 5 minute chart of the EURUSD which shows more of the move thru all these events:

Interesting to point out Gold here as it breaks out a major trendline on the Daily Chart:

Yesterday Gold had come right up to this trendline and started bouncing off it. Here is a 30 minute chart showing this:

This is the 5 minute chart of Gold from the start of the 12:30 Statement. The time on the chart is GMT+2:

DOE Crude Oil, Distillates & Gasoline Inventories - Conflicts across the complex follow API numbers last night

Today January 25th at 10:30 EST (15:30 GMT) the Inventory figures from the U.S. Department of Energy were released. These follow from last night API figures were a big build on Crude came along with draws on Distillates and Gasoline. While there was little reaction to API last night, as it comes out quite late in the day, today's DOE figures did have a nice reaction. Crude Oil is the best to follow but Heating Oil and RBob Gasoline also will move on these figures. Heating Oil is best matched to Distillates and Gasoline to Gasoline of course. However the complex will move in sympathy to deviations accross the complex. Here the figures:

DOE U.S. Crude Oil Inventories
Estimates- Median: +1450k Average: +654k Range: -2100k to +3700k
Actual: +3558k Prior: -3438k No Revision

DOE U.S. Distillate Inventory
Estimates- Median: -125k Average: -142k Range: -2500k to +2000k
Actual: -2456k Prior: +438k No Revision

DOE U.S. Gasoline Inventories
Estimates- Median: +2000k Average: +1583k Range: -1000k to +2500k
Actual: -390k Prior: +3717k No Revision

DOE U.S. Refinery Utilization
Estimates- Median: -0.6% Average: -0.4% Range: -1.25% to +1.00%
Actual: -1.50% Prior: -1.90% No Revision

DOE U.S. Cushing OK Crude Inventory
Actual: +374k Prior: -832k No Revision

DOE Crude Oil Implied Demand
Actual: 14067 Prior: 14482 No Revision

DOE Distillate Implied Demand
Actual: 4881.9 Prior: 4631.4 No Revision

DOE Gasoline Implied Demand
Actual: 8724.0 Prior: 8622.4 No Revision

Here is the 1 minute chart of the Crude Oil Future. Despite the draw it rallied:

of course part of this was the fact that Crude had sold off heading into the news, here is the 5 minute chart of Crude heading into the release:

Also included a 2 minute chart of Chesapeake and a 1 minute chart of Exxon:

US Pending Home Sales - Sell the Rumor Buy the News

A half an hour after the New York Cash Stock Equity Open at 10:00 EST (15:00 GMT) the Pending Home Sales figures were released. There were some negative headlines out of Europe about Greece and Portugal later in the European mid-day which gave the risk-on sentiment a pullback. The Emini S&P 500 sold off as the 9:30 open passed and headed down in the half hour leading into the News.

This really isn't the best economic news release to trade as everyone knows that housing is generally bad anyhow. In the past we have watched the USDJPY on US news but really the EMini S&P 500, the DOW or really any of the major Stock Indices generally follow US news quite well. The USDJPY does work but usually doesn't move many pips, perhaps 10. Here the figures:

US Pending Homes Sales MoM
Estimates- Median: -1.0% Average: -0.8% Range: -8.1% to +7.0%
Actual: -3.5% Prior: +7.3% No Revision
US Pending Homes Sales YoY
Actual: +4.4% Prior: +6.9% No Revision
US Home Price Index MoM
Estimates- Median: 0.0% Average: 0.0% Range: -0.5% to +0.5%
Actual: +1.0% Prior: -0.2% Revised: -0.7%

This is not large enough deviation trade, normally something closer to +/-5.0 or more, so this was a small -2.5 deviation and as the EMini had sold off into the news there was a good chance of a bounce back on a 'less worse than it could have been' type of rebound. Here is the 1 minute chart of the EMini S&P 500 from a spreadbet broker:

If you are stuck to just trading Forex, then the CADJPY is a good pair to trade because it has a good correlation to the main stock indices, which are driven by risk-on/risk-off price flow dynamic. Here is the 1 minute chart of the CADJPY forex pair:

UK GDP and MPC Meeting Minutes Vote Count - Lower deviation on GDP but no votes for raising APF leads to GBPUSD rally after sell-the-rumor move into the release.

This morning at 9:30 GMT (4:30 EST) the Preliminary GDP figures for Q4 2011 were released out of the UK. This came along-side the vote count of the MPC's January meeting, which complicated things a bit. There had been much talk of lower GDP figures for Q4 from various think tanks and the Chancellor of the Exchequer himself George Osborne. The GBPUSD forex pair had been near its highs for the week around 1.5615 as the European Session began, so no hint of selling this rumor of a lower print on GDP until about 15 minutes after the 8am London open, finally cable started to move down. Sometimes rumor lead moves can start the day before, but in this case it was just an hour or so before. Cable sold off 70 pips into the release and when the GDP did come out lower there was a slight further tick down for a lower low.

However the MPC Meeting Minutes Vote Count for the January Interest Rate Decision was released at the same time. Many are expecting the BOE to raise the APF (Asset Purchase Facility - the BOE'f name for QE or Quantitative Easing) even more as soon as February. However when the vote count came in unanimously at 9-0 against raising APF, this was bullish, even the arch-Dove Posen did not vote for it, although he has been talking about it. Raising APF is usually bearish for the GBPUSD because basically the bank is printing money, thus creating a larger supply of it and more supply means that its value is lower. However longer term raising APF can be bullish as it will stimulate the economy. When the BOE raised the APF on October 6th by 75 Billion, GBPUSD sold off quite hard to 1.5270, but then turned around and rallied non-stop thru-out October to 1.6165 on October 27th....anyway here are the Figures:

UK GDP (QoQ)
EStimates- Median: -0.1% Average: -0.1% Range: -0.7% to +0.2%
Actual: -0.2% Prior: +0.6% No Revision
UK GBP (YoY)
EStimates- Median: +0.8% Average: +0.8% Range: +0.2% to +1.1%
Actual: +0.8% Prior: +0.5% No Revision

Bank of England MPC Vote Count :
Unanimous to hold Rates Steady 0.5%
Unanimous to hold APF STeady at 275B


Here is the 5 second chart of the GBPUSD, you can see how initially price action was whippy and indecisive:

Here is the 1 minute chart of GBPUSD which shows the pair resolving higher after this intial wiggle (whippy on 5 second is a wiggle on the 1 minute), back to the 1.5600 round figure:

This 5 minute chart of GBPUSD shows the sell-off on the pair leading into the news starting from 8:15 GMT. This came off the 38% fibonacci retracement of the October 6th low of 1.5270 to the October 27th high of 1.6165 @ 1.5613:

This Daily Chart shows the fibonacci better:

Australian CPI - Conflict causes whipsaw which resolves higher

This Tuesday evening of January 24th at 19:30 EST (or 00:30 GMT on January 25th) the CPI figures were released from the Australian Bureau of Statistics. This is released quarterly like it is for New Zealand and unlike the USA or UK where it comes out monthly. Probably because it is only quarterly it seems to move the price of the Australian Dollar quite a bit. This data did become a bit tricky starting in 2008 when it split up into 3 sets of data with the Headline, Trimmed Mean and Weighted Mean. So 6 figures plus there revisions makes alot of numbers to look at. The past few releases all these have lined up more or less. In october the Headline was flat as expected, but the positive deviations on Trimmed & Weighted Mean lead to a rally in AUDUSD forex pair. This time we saw a -0.2 on the Headline and positive deviations on Trimmed Mean.

Here are the figures:

Australia Consumer Prices QoQ
Estimates- Median: +0.2% Average: +0.2% Range: -0.2% to +0.5%
Actual: 0.0% Prior: +0.6% No Revision

Australia Consumer Prices YoY
Estimates- Median: +3.3% Average: +3.2% Range: +2.8% to +3.6%
Actual: +3.1% Prior: +3.5% No Revision

Australia RBA Timmed Mean QoQ
Estimates- Median: +0.5% Average: +0.5% Range: +0.2% to +0.7%
Actual: +0.6% Prior: +0.3% Revised: +0.4%

Australia RBA Timmed Mean YoY
Estimates- Median: +2.4% Average: +2.4% Range: +2.1% to +2.6%
Actual: +2.6% Prior: +2.3% Revised: +2.4%

Australia RBA Weighted Mean QoQ
Estimates- Median: +0.5% Average: +0.5% Range: +0.2% to +0.7%
Actual: +0.5% Prior: +0.3% Revised: +0.4%

Australia RBA Weighted Mean YoY
Estimates- Median: +2.4% Average: +2.4% Range: +2.1% to +2.6%
Actual: +2.6% Prior: +2.6% Revised: +2.7%

The AUDUSD forex pair initially spiked down on the lower deviation on the Headline figure but then whipped around back higher on the better Trimmed Mean, there were also downward revisions. This seems to indicate that Trimmed mean is more important. Here is the a 5 second chart of the move on AUDUSD:

Basically the market probably expected a lower CPI figure to give the RBA move room to cut rates in February as most analyst now expect, this mixed CPI figure brings some doubt now to the likelyhood of that outcome. Here is a 30 second chart to show the way the AUDUSD forex pair resolved higher:

Finally the 5 minute chart of the AUDUSD forex pair shows how it came up to test the R1 pivot thru the asian session, bounced off, retested and slightly broke the former highs during the European Session before moving down on bad headlines about Greece & Portugal later in the European morning:

API Crude Oil Inventories - quite a build but little reaction

This evening at 16:30 EST (21:30 GMT) on January 24th the weekly Inventories report for Crude Oil, Distillate and Gasoline was released from the American Petroleum Institute or API. There was quite a build on Crude but Draws on Distillate and Gasoline. Normally a build especially this large is quite bearish, there was a small pop down but nothing much.

Here are the figures:


API U.S. Crude Oil Inventories
Actual: +7331k Prior: -4809k No Revision

API Cushing Crude OK Inventory
Actual: +386k Prior: -819k No Revision

API U.S. Distillate Inventory
Actual: -2464k Prior: -900k No Revision

API U.S. Gasoline Inventories
Actual: -573k Prior: +4309k No Revision

Here is the 1 minute chart of the Active Crude Oil Future, it did pop down 20 ticks,
but retraced back to pre-release soon there after:

Canadian Retail Sales - Slightly better but also slight revision down

Today January 24th 2012 the Retail Sales figures were released from Canada. Both the main Headline figure and the Core Less Autos figure came out with +0.1 deviations above the median estimate, however there were also revisions to last month's figure of -0.1. The USDCAD forex pair had been trending up into the news. The news hit and the pair wiggled a bit but then made a slightly higher high, coming up into the R1 Daily Pivot (based on London Midnight Close)...this is one of those instances where you can actually fade the move after news. This was because there was a move up before the news likely driven by expectations of a weak number, but also because there was a general pullback in risk-appetite thru the european mid-day and early new york session, which saw the US Dollar gain. When the numbers came out mostly flat and USDCAD moved into the technical resistance zone it was a good probability trade to fade the news move.

Here are the figures:

Canada Retail Sales MoM
Estimates- Median: +0.2% Average: +0.1% Range: -0.3% to +0.8%
Actual: +0.3% Prior: +1.0% Revised: +0.9%

Canada Retail Sales Less Autos MoM
Estimates- Median: +0.2% Average: +0.2% Range: -0.1% to +1.0%
Actual: +0.3% Prior: +0.7% Revised: +0.6%

Here is the first chart which shows the 30 second chart of the USDCAD, showing the little wiggle and then slightly new higher high into the 1.0140 zone of resistance.

Next is the 5 minute chart which shows the fade trade called live in the room a few minutes after the news was released and R1 was hit:

Israel Cuts Rates - The shekel weakens against the Greenback -> Hint of RBA's cut on February 6th?

On January 23rd at 10:30 EST (15:30 GMT) the Bank of Israel cut their interest rates by 25 basis points. The USDILS forex currency pair spiked higher, but not that much after the spread, however it did continue to move up - with Israeli Shekel weakness - thru the day, making a more substantial move. Basically out of 23 analysts surveyed 13 expected the Central Bank to hold rates steady at 2.75% however 10 analysts expected a 0.25% or 25 bps cut to 2.5%. So really whatever happened the Shekel would have moved.

First here is the 1 minute USDILS chart which show the spike:

and here is the 3 minute chart of USDILS which shows more of the continuation of the move after the initial spike:

However the US Dollar has been weakening against most pairs since basically the better Chinese Figures on January 17th, or the Spainish and Italian Bond auctions on January 12th however Friday January 13th was the S&P downgrade of France which was a risk-off day...as always a bit of whipping around near a reversal point. Anyhow not to get sidetracked, the point is that the EURILS was a better pair to play as the Euro gets a bit of retracement finally from weeks/months of selling pressure...no more sellers left perhaps? So here is the 1 minute chart of the EURILS:

and here is the 5 minute chart of EURILS which shows more of the follow thru:

Also finally the 5 minute chart again, this time rewinded to the start of the week, so the trend heading into the news can be noticed:

Another chart to share here is a comparison of Interest Rate moves by the Bank of Israel and the Royal Bank of Australia. RBA rate decision is on February 6th and most analysts expect a cut.