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Yen slips to 3-month low after Japanese electionThe Japanese yen is lower on Monday. In the European session, USD/JPY is trading at 152.63, up 0.22% at the time of writing. The yen weakened as far as 153.88 but has pared most of the losses. The new trading week has barely begun but the markets are busy digesting the drama out of Tokyo. The snap parliamentary election over the weekend was a disaster for new Prime Minister Shigeru Ishiba, as his Liberal Democratic Party (LPD) coalition won just 215 seats, short of the 233 majority. Ishiba has been in power for only a month and the snap election backfired as the LDP lost its parliamentary majority for the first time since 2009. It’s unclear if Ishiba will be able to cobble together a majority and the political uncertainly could push the yen, which is trading at 3-month lows, even lower. The election bombshell comes just ahead of the Bank of Japan’s on Oct. 31. The BoJ is expected to maintain policy settings and will release updated growth and inflation forecasts. The BoJ has intervened in the past when the yen showed a sharp and quick decline and there is speculation that the central bank might intervene if the yen falls to 155 or 160 per dollar. The US wrapped up the week with mixed results. Durable Goods Orders declined 0.8% in September, unchanged from a revised -0.8% reading in August and above the market estimate of -1%. The UoM Consumer Sentiment index improved slightly to 70.5 in October, above 70.1 in September, beating the market estimate of 69.0. USD/JPY continues to push through resistance lines. The next resistance line is 153.94 152.03 and 151.68 are providing support
by OANDA
Tokyo Core CPI complicates BoJ’s rate plansThe Japanese yen is showing limited movement on Friday. In the European session, USD/JPY is trading at 151.94, up 0.09%. Tokyo Core CPI, a leading indicator of inflation trends in Japan, fell to 1.8% y/y in October, down from 2% in September and just above the market estimate of 1.7%. This marked a second straight deceleration and was the lowest level since April. A key service inflation indicator also slowed in October, dropping from 2.7% to 2.6%, a four-month low. The decline in inflation is a disappointment for the Bank of Japan, which wants to see inflation remain sustainable around its 2% target before its raises interest rates on the path towards normalization. The BoJ meets next week and is expected to maintain rates. The central bank will release growth and inflation forecasts which could provide insights into future monetary policy. The cautious BoJ is unlikely to raise rates until early next unless inflation reverses its current downtrend and pushes higher. The US wraps up the week with core durable goods orders and UoM consumer sentiment. The manufacturing sector has contracted for four straight months and core durable goods orders are expected to fall 1% in September, after no change in August. The UoM consumer sentiment index is expected to fall to 68.9 in October, compared to 70.1 a month earlier. Consumers are unhappy about high inflation and there is uncertainty over the US election, with an extremely tight race between Donald Trump and Kamala Harris. USD/JPY is testing resistance at 1.5207. The next resistance line is 152.58 151.30 and 150.79 are providing support
by OANDA
Macro Monday 23 ~ US Factory Orders (released today 15:00 GMT)Macro Monday 23 US Factory Orders - ECONOMICS:USFO - Released Today U.S. Factory Orders (USFO) are reported by the U.S. Census Bureau at the start of each month. The next release for the month of October is today Monday 4th Dec 2023 at 15:00 GMT. The USFO Report provides information on the total dollar value of new orders, shipments, and unfilled orders for durable and non-durable goods. You might recall Macro Monday 18 where we looked at the at the Durable Goods Report (ticker: FRED:DGORDER ) which only provides data on new orders received on durable goods in isolation (goods lasting longer than 3 years) whilst the USFO Report is more comprehensive and includes durable goods, non-durables (items used once or not lasting a long time like light bulbs, detergent and clothing etc.), and also includes sub trends within durables and non-durables. Let’s have a quick look at the differences between the USFO report and Durable Goods Report below; U.S Factory Orders Versus Durable Goods The USFO Report is more comprehensive than the Durable Goods Report, the USFO Report examines trends within industries. For example, the Durable Goods Report may account for a broad category, such as computer equipment, whereas the USFO Report will detail figures for computer hardware, semiconductors, and monitors. This lack of detail in the Durable Goods Report is attributed to the speed at which it is released. Time Difference of the Releases: The Durable Goods Report for October was released almost two weeks ago on the 22ndNov 2023 whilst the USFO more comprehensive report (featured today) will be released today Monday 4th December 2023. It important to know this so you can get an early indication off the Durable Goods report as to how the later USFO Report may lean. The USFO Charts Whilst the figures within the USFO are reported in the billions of dollars, the chart shared today shows the percentage change month over month. Readings above 0% are more favorable and below 0% are less favorable. Essentially the increase or decrease shows the overall change in percentage terms orders from month to month. Chart 1 – US Factory Orders (USFO) ▫️ The grey line on this chart shows how the volatile the percentage month to month readings can be for the USFO. For this reason we have assigned a 12 month moving average which smooths out the data making it easier to assess the longer term trend (thin Dark Blue line). - On Chart 1 at present you can see that the 12 month MA recently came down to the just below the 0% level and has since started to turn upwards which is positive. - From July 2023 to present we have moved from -2% to +2.8% (a positive move indeed) Chart 2 – USFO 12 Month Moving Average (with S&P500 for reference) ▫️ In this chart we have isolated the US Factory Orders 12 month moving average and filled the area with the color dark blue from the 0% level to whatever reading was above it or below it. In other words, the USFO 12 month moving average is the exact same as in Chart 1 but illustrated differently, we just widened it vertically to make it easier to appreciate visually and we filled the area between the 0% line and whatever its reading was on the 12 month MA. I have included the S&P500 in purple as a rough reference of what the market was doing when we fell below the 0% level on the 12 month moving average (red zones on the chart). USFO Chart 2 informs us of the following: - The most obvious finding when you look at the chart is that the S&P500 can go down sideways or upwards even with the USFO 12 Month MA below zero, therefore it is not a good standalone indicator of a general market decline. For this reason I have not utilized it as a pre-recession indicator. - We can observe that sudden declines from high readings down to below 0% on the USFO 12 month MA can precede S&P500 market decline (see lower reddish arrows on the Chart 2). This appears to have happened before most market declines or as the market declines occur, its just that its happened also when the markets continued upwards, so it is a warning indicator but its not an absolute stand alone indicator. I think we can agree that if the USFO reading is going suddenly down and below 0% it is not a good thing for the market in general but price can be contrary and we need to keep in mind that the market can “climb walls of worry” for a long time. - If we look at the red shaded areas, we can see that during these specific periods when the USFO 12 month MA was below 0%, in three out of four of the red areas on the chart you could argue that the market was range bound and moved relatively sideways, meaning real returns during these periods would have been less than ideal (Real returns are what is earned on an investment after accounting for taxes and inflation). Inflation and taxes could have more easily corroded your returns during these periods as the entry price into the red zone was not all that different to the exit price. In reference to the real returns comment above, Lyn Alden a highly respected economist has been touting for months that she suspects a rangebound market, similar to the brief range bound markets in the first three red zones in Chart 2 (left to right). Worth keeping in mind that we recently dipped below the 0% level and should this occur again and we sustain a sub 0% level, it may indicate that real returns might be negative going forward (subject to below 0% reading). This is not a prediction and there are no guarantees. We are just looking at the data and trying to lean on the right side of probability. Three out of Four times in the recent past real returns were not great when the USFO 12 month MA fell below 0%. Durable Goods Report We mentioned the Durable Goods Report above which was released almost two weeks earlier than the U.S. Factory Orders (on 22ndNov 2023). Durable Goods is more specific and focuses on the obvious, durable goods (goods that last 3 years or longer) whilst the USFO Report is more comprehensive and in addition includes non-durables (items used once or not lasting a long time like light bulbs, detergent and clothing), and it also includes sub trends within durables and non-durables. Using New Orders for Durable Goods to Anticipate Market Direction ▫️ We previously shared how the Durable Goods chart can be used to help anticipate price movements on the S&P500, in addition to providing an advance insight into the USFO report release which is released two weeks later. ▫️ The 30 month moving average for Durable Goods can act as a threshold level for buy and sell signals for the S&P500 whilst also providing advance warnings of recession and/or capitulation events. This has been clearly illustrated in the chart. The main findings in the chart are as follows: 1. When Durable Goods Orders(blue) fall below the 30 month moving average(brown) this is sell signal 2. When Durable Goods Orders(blue) break above the 30 month moving average(brown) this is a buy signal 3. Declining durable goods and/or a fall below the 30 month moving average has offered advanced warning of recession and/or capitulation. The chart demonstrates that using the 30 month moving average for Durable Goods New Orders can very useful in determining market trend. At present we are above the 30 month moving average and the moving average appears to be trending upwards however the release on the 22ndNov 2023 came in lower dropping from $294 billion down to $279 billion. This provides insight into the USFO, with durables on the decline, will we see non-durables on the decline too and a lower USFO today Monday 4th Dec 2023? We can continue to monitor the Durable Goods chart and watch for a cross of the 30 month moving average as an additional confirmation of a change to a bearish trend for the S&P500 when or if it happens. For now this is just another chart to help us identify bearish/bullish trend changes by using the economic data from Manufacturers New Orders for Durable Goods. Similarly the USFO Report (inclusive of non-durables) which is released today should be interesting, I wonder could we see a drop down below the 0% level or a decline from the 2.8% MoM level in line with the Durable Goods decline already observed on the 22nd Nov 2023. We will find out later today. SUMMARY In summary, when the USFO 12 Month Moving Average drops and remains below 0% there is an increased probability of a rangebound market with an increased likelihood of negative real returns. Separately, the Durable Goods Chart 30 month moving average has been apt at indicating buy and sell triggers for the S&P500. At present we are falling down towards the 30 moving average but we have not crossed it yet so no trigger event here. We wait for todays USFO report release and the next Durable Goods Report later in December as we do not have any trigger events on either, just cautionary data to keep an eye on. I hope you found this useful in understanding and making use of both these important metrics which capture consumer spending habits and sentiment. PUKA
ECONOMICS:USFO
by PukaCharts
11/19/23 DXY Weekly Outlook#DXY #WeeklyOutlook Next week is Thanksgiving holiday so, historically that week can be a hit or miss and especially given the fact that we don't have a lot of news this week so I would tread lightly. We don't have any red folder news until Wednesday and that is going to be an early release of #UnemploymentClaims , #DurableGoods, and #ConsumerSentiment. On Tuesday we do have #ExistingHomeSales which will ll be something that's an economic gauge more so than something we may want to trade off of, but we can see what happens on Tuesday. After Wednesday, there's not really much going into Thursday and Friday because Thursday is a holiday, although we do close out the week with #PMI. Probability for dollar this week looks like we will definitely take out the PWL last week that I was sitting at 103.815. We are sitting inside a D+FVG but we have the yearly opening price #YOP just about 0.31% below us and that may be what we’re drawn to at least to tap it. We could see some LTF moves to the up side but the daily and weekly charts are pretty heavily favored to the downside meaning that: XXX/USD bullish USD/XXX bearish D chart
TVC:DXYShort
by Cory4rex
11/19/23 SPX Weekly Outlook#SPX #WeeklyOutlook: Next week is Thanksgiving holiday so, historically that week can be a hit or miss and especially given the fact that we don't have a lot of news this week so I would tread lightly. We don't have any red folder news until Wednesday and that is going to be an early release of #UnemploymentClaims , #DurableGoods, and #ConsumerSentiment. On Tuesday we do have #ExistingHomeSales which will ll be something that's an economic gauge more so than something we may want to trade off of, but we can see what happens on Tuesday. After Wednesday, there's not really much going into Thursday and Friday because Thursday is a holiday, although we do close out the week with #PMI. We set the PWL inside of a 4H+FVG and never came back near it. We expanded and created +FVGs on the Daily, 4H, and 1H that held price near the WHs once the #cpi news release on last Tuesday. If we stay in inverse correlation to the dollar I would assume the PWHs are still our targets on the HTF. Nothing is really standing in the way of of us pushing higher into them and if we see any LTF moves to the downside I’d take them with the logic that we are trading into bullish points of interest POIs . #BullishCase: We see price stalling and react to a LTF POI and bounce to take the PWHs out. I would look for any recent bullish order blocks or fair value gaps and look for price to react there. #BearishCase: We are pushing up hard over the past 3 weeks and all the down moves, even the ones that seem to be setting us up for lower price have been bought back up. LTF moves at fresh bearish POIs from the 4H or 1H are the only sell setups I’ll probably look for and doing so with the #BullishCase in mind. We closed out Friday to the downside and we have two PDLs and into the FVGs, and these would be my short terms downside targets. 1H chart 4H chart D Chart
BLACKBULL:SPX500Long
by Cory4rex
11/19/23 NAS Weekly Outlook#NAS #WeeklyOutlook Next week is Thanksgiving holiday so, historically that week can be a hit or miss and especially given the fact that we don't have a lot of news this week so I would tread lightly. We don't have any red folder news until Wednesday and that is going to be an early release of #UnemploymentClaims , #DurableGoods, and #ConsumerSentiment. On Tuesday we do have #ExistingHomeSales which will ll be something that's an economic gauge more so than something we may want to trade off of, but we can see what happens on Tuesday. After Wednesday, there's not really much going into Thursday and Friday because Thursday is a holiday, although we do close out the week with #PMI. We set the PWL inside of a 4H+FVG and never came back near it. We expanded and created +FVGs on the Daily, 4H, and 1H that held price near the WHs once the #cpi news release on last Tuesday. If we stay in inverse correlation to the dollar I would assume the PWHs are still our targets on the HTF. Nothing is really standing in the way of of us pushing higher into them and if we see any LTF moves to the downside I’d take them with the logic that we are trading into bullish points of interest POIs . #BullishCase: We see price stalling and react to a LTF POI and bounce to take the PWHs out. I would look for any recent bullish order blocks or fair value gaps and look for price to react there. We have a W-FVG that is my main target for us on NAS #BearishCase: We are pushing up hard over the past 3 weeks and all the down moves, even the ones that seem to be setting us up for lower price have been bought back up. LTF moves at fresh bearish POIs from the 4H or 1H are the only sell setups I’ll probably look for and doing so with the #BullishCase in mind. We closed out Friday to the downside and we have two PDLs and into the FVGs, and these would be my short terms downside targets. 1H chart 4h chart D chart:
FOREXCOM:NAS100Long
by Cory4rex
11/19/23 US30 Weekly Outlook#US30 #WeeklyOutlook Next week is Thanksgiving holiday so, historically that week can be a hit or miss and especially given the fact that we don't have a lot of news this week so I would tread lightly. We don't have any red folder news until Wednesday and that is going to be an early release of #UnemploymentClaims , #DurableGoods, and #ConsumerSentiment. On Tuesday we do have #ExistingHomeSales which will ll be something that's an economic gauge more so than something we may want to trade off of, but we can see what happens on Tuesday. After Wednesday, there's not really much going into Thursday and Friday because Thursday is a holiday, although we do close out the week with #PMI. We set the PWL inside of a D+OB and never came back near it. We expanded and created +FVGs on the Daily, 4H, and 1H that held price near the WHs once the #cpi news release on last Tuesday. If we stay in inverse correlation to the dollar I would assume the PWHs are still our targets on the HTF. We set an equal high EQHs with the PWH from 8/28/23. Nothing is really standing in the way of of us pushing higher into them and if we see any LTF moves to the downside I’d take them with the logic that we are trading into bullish points of interest POIs . We are inside of a W-OB (not drawn) and D-OB but the is holding and setting up to push higher. #BullishCase: We see price stalling and react to a LTF POI and bounce to take the PWHs out. I would look for any recent bullish order blocks or fair value gaps and look for price to react there. We have EQHs that is my main target for us on US30 #BearishCase: We are pushing up hard over the past 3 weeks and all the down moves, even the ones that seem to be setting us up for lower price have been bought back up. LTF moves at fresh bearish POIs from the 4H or 1H are the only sell setups I’ll probably look for and doing so with the #BullishCase in mind. We closed out Friday to the downside and we have two PDLs, SSL, and into the FVGs, and these would be my short terms downside targets. 1H chart 4h chart D chart:
FOREXCOM:US30Long
by Cory4rex
Macro Monday 18~Durable Goods SignalsMacro Monday 18 Using New Orders for Durable Goods to Anticipate Market Direction This week we are using the Manufacturers New Orders for Durable Goods Survey data (“Durable Goods”) to help anticipate price movements on the S&P500. The 30 month moving average for Durable Goods can act as a threshold level for buy and sell signals for the S&P500 whilst also providing advance warnings of recession and/or capitulation events. This has been clearly illustrated in the chart. Durable Goods Explained Durable goods orders is a broad-based monthly survey conducted by the U.S. Census Bureau that measures current industrial activity which proves to be is useful as an economic indicator for investors. Durable goods orders reflect new orders placed with domestic manufacturers for delivery of long-lasting manufactured goods (durable goods) in the near term or future. A high durable goods number indicates an economy on the upswing while a low number indicates a downward trajectory. Durable goods orders tell investors what to expect from the manufacturing sector, a major component of the economy, and provide more insight into the supply chain than most indicators. This can be especially useful in helping investors understand the earnings in industries such as machinery, technology manufacturing, and transportation. What’s Included in Durable Goods? Durable goods are expensive items that last three years or more. As a result, companies purchase them infrequently. Examples include machinery and equipment, such as computer equipment, industrial machinery, and raw steel, as well as more expensive items, such as steam shovels, tanks, and airplanes—commercial planes make up a significant component of durable goods for the U.S. economy. Many analysts will look at durable goods orders, excluding the defense and transportation sectors as large once off orders can often skew the figures. Durable goods orders data can often be volatile and revisions are not uncommon, so investors and analysts typically use several months of averages instead of relying too heavily on the data of a single month. In our chart we have found the 30 month moving average to be particularly apt as a threshold level The Chart In the chart we have the Durable Orders metric in blue and the S&P500 in baby blue. The 30 month moving average on Durable Goods (Dark Brown Line) is used as a threshold level for buy and sell signals. When the blue line for new orders of Durable Goods definitively passes the 30 month moving average (Dark Brown Line) this provides the buy or sell signal based on whether it moves above or below the average. Main Findings 1. When Durable Goods Orders(blue) fall below the 30 month moving average(brown) this is sell signal 2. When Durable Goods Orders(blue) break above the 30 month moving average(brown) this is a buy signal 3. Declining durable goods and/or a fall below the 30 month moving average has offered advanced warning of recession and/or capitulation. Sell Signal Record (Blue line crossing below Dark Brown Line) ▫️ In Oct 2000 five months before the Dot.Com Crash which commenced in Mar 2001, the Durable Goods Moving Average provided a sell signal offering an five month advanced warning of recession. ▫️ In Dec 2007 the Great Financial Crisis (“GFC”) commenced and whilst New Orders for Durable Goods had not passed below the moving average before the recession it did pass the moving average mid recession signalling an advance warning of the major capitulation event of the GFC crash. Once again Durable Goods was of great utility in avoiding unnecessary losses. ▫️ A sell signal triggered in Oct 2014 and whilst there was no crash, the S&P500 price oscillated sideways for >24 months post signal and only increased in value by 9%. During this 24 month period capital would have been better allocated somewhere offering a better than 9% return. ▫️ In Feb 2019 one year before the COVID-19 Crash the Durable Goods Moving Average provided an advanced sell/recession signal, and whilst the S&P500 did rally c.13.5% after the signal over the subsequent 12 months, the S&P500 ultimately fell 23% thereafter in a matter of months taking back all those gains and more. Buy Signal Record (Blue line crossing above Dark Brown Line) ▫️ As you can see from the chart the buy signals provide a great confirmation of trend, that price on the S&P500 will likely continue in an upwards trajectory. ▫️ For the four buy signals confirmed we had 50 months of upwards price pressure on the S&P500 on the first two occasions and on the latter two 18 months and 15 months of upwards price action. ▫️ Taking the four aforementioned buy signals, an the average return was 60.5% f(max return possible from a buy signal the market high). ▫️ The performance from a buy signal to sell signal was an average of 43% across the four instances. The chart demonstrates that using the 30 month moving average for Durable Goods New Orders can very useful in determining market trend. At present we are well above the 30 month moving average and appear to be trending upwards. We can continue to monitor this chart and watch for a cross of the 30 month moving average as an additional confirmation of a change to a bearish trend for the S&P500 when it happens. For now this is just another chart to help us identify bearish/bullish trend changes by using the economic data from Manufacturers New Orders for Durable Goods. As always folks, stay nimble PUKA
FRED:DGORDER
by PukaCharts
NZ dollar slides below 62, retail sales nextThe New Zealand dollar continues to show volatility this week. In the North American session, NZD/USD is trading at 0.6182, down 0.48%, erasing all of Tuesday's gains. Later today, New Zealand releases retail sales for the second quarter. The markets are expecting a strong rebound of 1.7%, after the Q1 reading of -0.5%. The release is expected to reflect pent-up consumer demand after Covid restrictions were lifted in April. A stronger-than-expected release could give the New Zealand dollar a lift. The RBNZ will be carefully monitoring the retail sales release, as a strong reading would indicate that the economy remains strong and can continue to absorb higher interest rates. The RBNZ has been aggressive, raising rates by 50 basis points at four straight meetings. The central bank is expected to add another 50bp hike at the October meeting, which would bring the cash rate to 3.50%. Inflation has hit 7.3%, but the RBNZ is confident that it will peak soon and expects inflation to fall to 3.8% by the end of 2023. The central bank is cautiously positive about the economic outlook, predicting that the economic slowdown will not turn into a full-blown recession. Over in the US, durable goods orders for July were a mix. The headlines reading slipped to 0.0%, down sharply from 2.2% in June and missing the estimate of 0.6%. Core durable goods was unchanged at 0.3%. The weak data did not weigh on the US dollar, unlike the case after a weak US New Home Sales release on Tuesday, which sent the US dollar broadly lower. Investors are now shifting attention to Thursday's US Preliminary GDP for Q2. In July, the initial GDP estimate came in at -0.9%, settting off a storm of debate as to whether the US economy was in a recession after back-to-back quarters of negative growth. The debate had political overtones as well, with the White House, trying to avoid being tainted with the "R" word, went to great pains to point out that there are other definitions of a recession. The second GDP estimate is likely to come in at -0.8% or -0.9%; any other number would be a surprise and would likely result in some volatility for the US dollar. NZD/USD faces resistance at 0.6227 and 0.6366 There is support at 0.6126 and 0.6075
by OANDA
Swiss franc claws up to 90 line on US GDPThe Swiss franc is up for a second straight day. In North American trade, USD/CHF is trading at 0.9000, up 0.24% on the day. The Swiss franc has made strong inroads in recent weeks against a US dollar which continues to struggle. The dollar posted sharp gains in the first quarter, but has reversed directions. Since April 1, USD/CHF is down 4.8% and has surrendered most of the gains accrued in Q1. The Swiss central bank (SNB) does not want to see the Swiss franc continue to appreciate, since a higher-valued Swiss franc makes Swiss exports more expensive. The SNB also prefers to see limited movement from the Swissie, so that price movement remains muted.  The SNB has been actively purchasing US dollars in order to prevent the exchange rate from continuing to rise. However, with the US dollar showing prolonged weakness and the Federal Reserve insisting that it will not tighten policy anytime soon, the SNB may have a tough time trying to prevent the Swissie from appreciating further. The US released a data dump earlier in the day. The results were mixed and the dollar edged lower, as the Swiss franc has clawed back up the symbolic 90-level. US second-estimate GDP came in at 6.4%, confirming the initial read but shy of the forecast of 6.5%. Headline durable goods slowed to 1.0%, down from 1.6%. Core Durable goods surprised with a decline of 1.3%, down from +0.5% and much worse than the consensus of +0.8%. On the employment front, US jobless claims dropped to 406 thousand, down from 444 thousand. In Switzerland, the trade balance fell to CHF3.82 billion, down from CHF5.7 billion and shy of the forecast of CHF4.2 billion. USD/CHF faces resistance at 0.9033 and 0.9087. On the downside, there is weak support at 0.8939. Below, there is support at 0.8899
by OANDA
Impact of cold winter retreat, US durable goods new orders rebouThe year-on-year increase of US durable goods reached 25.02% (previously 3.2%), with an absolute value of $256.3 billion (previously $254 billion). Year-on-year increase of nondefense new orders for capital goods reached 11.59%, to $75.9 billion in March. MM Analysis As the impact of cold winter retreat, nondefense new orders for capital goods reached $75.9 billion in March. The gap between the annual growth rate of new orders and the uncompleted orders continued to expand, indicating a large amount of backlog orders, it is still in the stage of restocking. It is expected that in Q3, under a new round of 1.9 trillion fiscal spending, there would be a strong support (February savings rate: 13.6%). Driving companies to continue to invest in restocking inventory and continue the manufacturing restocking cycle as the March manufacturing PMI and retail sales data also set new highs at the same time.
CME_MINI:ES1!
by MacroMicro_Global