Saturday January 9, 2016 - 12:59:19 GMT
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I Warned You!
John M. Bland, MBA, CTA
Markets Off To A Roaring Start IN 2016
While I had indicated last week that the consensus strong USD bias of many created risks, it was surprising that things came to a head so swiftly. Earlier in the week, traders were worried about instability in the Chinese equity markets and growing concerns about an economic slowdown in the U.S. Friday saw a mixed December U.S. Jobs report. While the headline jobs figure was a much higher than expected +292,000, many soon realized the figures were not what they appeared to be. The data reflected a significant weather effect from record high temperatures due to "El Nino", which were not picked up in the seasonal adjustments to the data. Other metrics, such as Average Hourly Earnings and Hours Worked were not constructive.
I warned you at the start of last week that hopping onto a "crowded trade" can be fraught with risk. I noted that the consensus view was for an easy ECB policy this year and for higher Fed rates. I wrote "I agree with expectations for the general bias of policies for the U.S. in the first half of the new year, but I withhold judgement on how "as expected" policies will impact the forex markets. Dollar bulls were frustrated on many occasions in the second half of the past year." Beware of the "crowded trade", especially now when there are growing doubts about whether Fed policy is on an appropriate track.
The upcoming week sees a moderately active skate of data.
WEEKLY HIGH IMPACT NEWS:
00:00 JP- Holiday
15:00 US- JOLTS Survey
13:00 13-Jan Wednesday
15:30 US- Crude
00:30 AU- Employment
12:00 GB- Bank of England Decision
13:30 US- Retail Sales
15:00 US- prelim University of Michigan Survey
Be sure to refer daily Global-View to see the continuously UPDATED Economic Calendar and the Forex Forum for the complete list of key items (actual data, selected charts, etc.) as they are released.
John M. Bland
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