This week starts where last week ended: North Korea. Reports don’t suggest tensions between US and NoKorea have heightened but there doesn’t seem to be any dissipation of tension either. The markets will likely remain watchful ahead of the US/South Korea military exercises from Aug 21 through Aug 31. Keep in mind that any diplomatic solution is bound to fail, since Trump said long ago he would be “honoured” to sit down with Nintendo Kim. But NoKorea cannot expect to land even one single missile upon US ground – so Kim’s move has apparently been to recruit millions of civilians into the army. We still haven’t seen the end of this.
If geopolitical news doesn’t catch the market’s attention, perhaps central bank minutes will, as we have RBA Minutes (Tue), Fed Minutes (Wed),ECB Minutes (Thur). If all else fails, revert to the usual market movers for action (see below).
USD: beyond FED Minutes (Wed), this week we have Retail Sales, NY Fed Manufacturing (Tue), Housing data (Wed), Philly Fed and Ind. prod (Thur), UoM (Fri).
EUR: beyond the ECB minutes (Thur) we will get Industrial Production (Mon), German GDP (Tue),EU GDP (Wed), EU CPI & Trade Balance (Thur).
GBP: influential week with CPI, PPI and RPI (Tue), Employment data (Wed), Retail Sales (Thur).
CAD: we only have CPI due this week which might surprize to the upside given the recent increase in the prices component of the IVEY PMI.
AsiaPac: We start off with Japanese Q2 GDP . Key China data includes Ind. Prod., Retail Sales and Urban Investment (Mon), House Prices (Fri). In Australia the main event is unemployment data (Thur). In New Zealand we get Q2 retail sales volumes, GDT auction and Q2 PPI.
Going into the week I’m cautious. If geopolitical events take center stage, then shorting Dow and buying Jpy vs. Aud & Nzd might be the better play. In the absence of heightened risk aversion, moves will be directed by the usual pre-scheduled market movers which will make short-range plays more viable.
by | Aug 13, 2017 – 6.28 pm
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