US CPI, Housing Starts, Building Permits & Initial Jobless Claims - mixed reading forms a top

Today on Thursday January 19th at 8:30 EST (13:30 GMT) the Consumer Price Inflation figures were released from the USA. This also came out with a bunch of other data such as Housing Starts, Building Permits and the weekly Jobless data, the Initial Jobless Claims and Continuing Claims. So there was alot of data to go through was it was quite difficult to get a clear trade based on the numbers. The CPI was flat, the Housing Numbers were weaker but the Initial Jobless Claims made a new low, breaking December 2011 low which had just broken the late February 2011 low. Last week this number did rebound to 399k, a higher number being bad in this case, but then this week it came back down. This 'much better than xx months/ x years' type headline seemed to steal the limelight, everyone knows that Housing is bad anyhow, but if employment is better then the economy has a better chance of recovery. The morning had been pretty risk-on with good earnings reports from Morgan Stanley and Bank of American, both those stocks jumped over 6%. Here is the data:

US CPI Ex Food & Energy m/m
Estimates- Median: +0.1% Average: +0.1% Range: -0.1% to +0.2%
Actual: +0.1% Prior: +0.2% No Revision

US Headline CPI m/m
Estimates- Median: +0.1% Average: +0.1% Range: -0.1% to +0.3%
Actual: 0.0% Prior: 0.0% No Revision

US Core CPI y/y
Estimates- Median: +2.2% Average: +2.2% Range: +2.0% to +2.3%
Actual: +2.2% Prior: +2.2% No Revision

US Headline CPI y/y
Estimates- Median: +3.0% Average: +3.0% Range: +2.9% to +3.2%
Actual: +3.0% Prior: +3.4% No Revision

US Housing Starts
Estimates- Median: 680k Average: +682k Range: +625k to +723k
Actual: +657k Prior: +685k No Revision

US Housing Starts MOM%
Estimates- Median: -0.7% Average: -0.5% Range: -8.8% to +5.6%
Actual: -4.1% Prior: +9.3% Revised: +9.1%

US Building Permits
Estimates- Median: +679k Average: +680k Range: +640k to +728k
Actual: +679k Prior: +681k Revised: +680k

US Building Permits MOM%
Estimates- Median: -0.2% Average: 0.0% Range: -5.9% to +7.1%
Actual: -0.1% Prior: +5.7% Revised: +5.6%

US Initial Jobless Claims
Estimates- Median: +384k Average: +383k Range: +363k to +405k
Actual: +352k Prior: +399k Revised: +402k

US Continuing Claims
Estimates- Median: +3590k Average: +3577k Range: +3500k to +3630k
Actual: +3432k Prior: +3628k Revised: +3647k

So 1st chart is the EMini S&P 500 future 1 minute chart which basically show a whipsaw as the market digested the positive and negative aspects of the data:

Next is the USDJPY 1 minute chart which after a little whiggle did catch a bid, this one is the safest forex pair to trade on USA news but it doesn't always move that many pips:

finally is a 30 second chart of the CADJPY, this one usually follows the stock indices quite well and when good US data gives a boost to risk appetite this one can rally. However inflation is difficult these days. In the past high CPI meant that the Fed would more likely to raise interest rates which would strengthen a currency, however sometimes the stock market would not like higher rates. In the current economic situation however, high CPI means the Fed is less likely to do more Quantitative Easing and the market will rally if there is more QE but the US dollar will weaken.

US Retail Sales - Much Better Price Action to Lower Deviation

At 8:30 EST (13:30 GMT) the Retail Sales figures for the USA were released along with the Weekly jobless numbers the Initial Jobless Claims and Continuing Claims numbers. The numbers were weaker accross the board. This figure has not been responding very well recently and we have been only watching larger deviations, so although this month the deviations were larger than the past few months, they were still below the +-/0.7 we watch. However there was a good price response the this -0.5 deviation, especially the EMini S&P 500 Futures contract, which really is the best trading instrument to trade on this number. However the move was helped by the Weekly Initial Jobless figure which came back down to break the late February 2011 lows, reaching 364k on December 22nd 2011 - the lowest number for the year. A lower Jobless Figures is good. The weekly number had been hovering around 400k for some weeks leading into the end of the year when it finally broke in December, a bullish sign, but today it is back near 400k again....Was this reduction in the jobless merely temporary Christmas employment...we could have a bad print for February's NFP...keep your eyes open


Here the figures:

US Retail Sales Less Autos
Estimates: Median +0.3% Average +0.3% Range -0.2% to +0.8%
Actual: -0.2% Prior: +0.2% Revised: +0.3%
US Advance Retail Sales
Estimates: Median +0.3% Average +0.3% Range -0.2% to +0.9%
Actual: +0.1% Prior: +0.2% Revised: +0.4%
US Retail Sales Ex Auto & Gas
EStimates: Median +0.4% Average +0.3% Range 0.0% to +0.5%
Actual: 0% Average +0.2% NO Revision
US Initial Jobless Claims w/w
Estimates: Median +375k Average +378k Range 352k to 405k
Actual: 399k Prior 372k Revised 375k
US Continuing Claims w/w
Estimates: Median 3595k Average +3590k Range 3545k to 3630k
Actual: 3628k Prior: 3595k Revised: 3609k

Here is the 1 minute chart of the EMini S&P 500 Future which had a nice move, this really is the best instrument to trade on US news these days.

Next is the CADJPY 10 second chart which usually has a good correlation to the Stock indices:

Finally the USDJPY 30 second chart for completion, initially there was some whipsaw price action but it did eventually head down:

US ADP Employment Change - much higher deviation leads to nice spike

A very big upward deviation on the ADP Employment Change from the USA released today at 13:15 GMT (8:15 EST). This sets up the big data for Friday, the Non-Farm Payroll to come out higher. There was nice rallies on the EMini S&P 500 and the Yen Crosses as a little bid came back into risky assets after the battering they had taken during the European morning as the European Banking sector got hit on fears about Italy's Unicredit and Deutsche Bank.

This was followed 15 minutes later by the weekly Initial Jobless Claims from the USA. This figure did make a new low for 2011 on December 15th of 366k, which broke the low from late February and shows that unemployment is slowing in the USA. There is also a weekly Continuing Claims number released at the same time slot at half past. Today's Initial Jobless Claims figure did not break the December 15th 366k low but it did stay below the important 400k level.

Here are the figures:

US ADP Employment MoM
Estimates: Median +178k Average +177k Range +125k to +230k (150-200 most)
Actual: +325k Prior: +206k Revised: +204k

US Initial Jobless Claims WoW
Estimates: Median +375k Average +377k Range +365k to +390k
Actual: +372k Prior: +381k Revised: +387k

US Continuing Claims WoW
Estimates: Median +3570k Average +3567k Range +3500k to +3650k
Actual: +3595k Prior: +3601k Revised: +3617k

First chart is the 1 minute chart of the EMini S&P 500 future, a good 6 point (24 tick) move:

Next a 30 second chart of the USDJPY, although not so many pips a solid move, notice the move accelerates further after the Initial jobless claims release 15 minutes later:

Finally a 10 second chart of the CADJPY which had a nice spike in reaction to the large positive deviation seen on the US Monthly ADP figure release, and mirroring the move seen in the EMini S&P:

US GDP Final for Q3 2011 - lower GDP but Initial Jobless Claims lower which is good

Today at 8:30 EST 13:30 GMT the GDP figures for the USA came out. This is the final reading for the 3rd quarter of 2011 and thus are a bit dated. These came along with the weekly jobless figures which last week broke the critical 400k bull/bear line and printed 366k coming back down to the April lows, which is where things were before fears of a double dip grew during the summer of 2011. There was also personal consumption and pce core, the fed's perfered inflation indicator.

It is rare for there to be such a range of estimates for a final release of GDP but after the Advanced of 2nd reading of Q3 back in November where the figure came out at 2.0% below the 2.5% expected, the range of analysts estimates grew quite wide...wider in fact than last month's estimates which had a 0.9 range this month had a 1.3 range.

The IJC did come in slightly lower this week than last week, not alot but it is positive that it maintained the lower reading from last week into this one. The GDP was -0.2 deviation below the median estimate of all analysts surveyed by bloomberg and the risky assets did sell off. Here the figures:



US GDP QoQ Annualized - Final Q3 2011
Estimates: Median +2.0%, Average +2.0%, Range +1.5% to +2.8% (majority +1.8% to +2.2%)
Actual: +1.8% Prior: +2.0% No Revision


US Personal Consumption
Estimates: Median +2.3% Average +2.2% Range +1.5% to +2.4% (majority +2.2% to +2.4%)
Actual: +1.7% Prior: +2.3% No Revision

US GDP Price Index
Estimates: Median +2.5% Average +2.5% Range +2.0% to +2.5% (majority +2.5)
Actual: +2.6% Prior: +2.5% No Revision

US Core PCE q/q
Estimates: Median +2.0% Average: +2.0% Range +2.0% to +2.0%
Actual: +2.1% Prior: +2.0% No Revision

US Initial Jobless Claims w/w
Estimates: Median +380k Average: +378k Range +355k to +400k
Actual: +364k Prior: +366k Revised: +368k

US Continuing Claims w/w
EStimates: Median +3600k Average +3602k Range +3560k to +3650k
Actual: +3546k Prior: +3603k Revised: +3625k

Now for some charts...what was interesting is looking at last months reaction to the -0.5 deviation lower from +2.5 expected to the +2.0 of the actual release. Normally there would have been a good move lower on the Japanese Yen crosses but instead we saw broad US Dollar strength on risk aversion. I know it might not make sense that the US Dollar would strengthen on bad data from the USA but when markets get bad data they respond by dumping riskier high yeild assets and buying safe US bonds...it is the largest safest market in the world, but they don't yeild so much. First chart is the Australian Dollar versus US Dollar AUDUSD 10 second chart:

next is the CADJPY, which has a high correlation to stock indices...last month the US GDP was released with Canadian Retail Sales at the same time, which was higher while GDP was lower, so it was not a good pair to trade last month, this month it was good:

Nice to look at the DAX chart, this is the index for the German stock market, but it moves nicely on US news as well. This is the 1 minute chart:

should include the Emini S&P 500 to be complete..1 minute chart:

and finally the USDJPY is included because this was the safest pair to trade on US news, this is because you cannot always be sure that risk-on will mean selling US Dollars and risk-off will be buying US Dollars...sometimes risk-on is selling the Japanese yen and risk-off is buying the yen. if there is good US data it should mean that the US currency should strengthen but because of the risk-on/off dynamic it is not always the case. Because the yen is alot like the US dollar in the case it is sometimes good to trade this pair as you go negative the US dollar on bad data and you go positive the japanese yen on risk aversion. The market right now is more slanted towards buying US dollars on bad news and risk aversion or risk-off than buying japanese yen, this is not always the case as many bad GDP releases in the past this pair has sold off. Here is the chart today which shows this didn't work today...