The Week Ahead

Hi All, Apologies but there will be no No Rest for FX this week. I have a busy week ahead and won't be trading much (if at all) myself. So just sticking with The Week Ahead. It should also be a quiet one with me re emails... preparing myself up for the chaotic subsequent week, is I'm trying to avoid getting Hung Up in any trades which might go stale after a few central bank meetings here and there and then get ready to Get Into the Groove for the Fed on the 15th. 

Big crypto moves this weekend... my long-term view on crypto is not great if I'm honest, but I'm only an amateur in the space so please do challenge me in the comments and I guess it should really be a papa don't preach :) 

The Weekend in One Image: 

Energy prices have surged completely recently in Europe. Day ahead prices above EUR250/hour. 

Central Banks: 

Highlights for The Week Ahead: 

No doubt the RBA will garner a lot of attention on Tuesday - this has been the central bank which has seemed very willing recently to abandon any forward guidance. I.e. When we had the abandonment of the yield curve control target and a seeming more hawkish shift from the board. Then we also have the BOC Wednesday, which has also been party to the occasional mixing up of the rhetoric. 

I will try and get you a primer for both, but at the very least I will get you the BOC - I'm starting to feel USDCAD looks very overvalued, and I very much like the idea of a USDCAD short - especially when we add in my view for probably higher oil prices. 

Economic Data: 

It's looking pretty busy for data. The US and China both publish inflation data this week. Latest CPI report expected to show inflation at 6.7% in November... the highest since 1982!!!! Wow. 

Personally, I expect this is probably about right, but this should be overlooked. Inflation for December should be markedly lower with this slump in oil (and subsequently gas) prices. We also get UK GDP figures, IP, and more. A few other data pieces from Europe but nothing I expect will seriously move the market. 

No Rest for FX 4: Briefly...

EURUSD: Expect little movement this week as investors choose to hold fire before the Central Bank meetings in the subsequent week. 

GBPUSD: Also expecting little movement, generally think this will be a pretty mundane week. 

EURCHF: Well, obviously here I'm bullish :) - Just going to have to keep thinking Like a Prayer with this one. 

USDJPY: Happy to continue to be short here as it does seem USDJPY is correcting. I have flagged this divergence between the US yields and JPY for a while, and see no reason for this to change. 

Equities: I continue to hold my shorts. I feel this may be a mistake for the first day or two of the week, but I think by the end the market will be little changed, perhaps a % or 2 higher. 

Treasuries: Again see no reason for massive changes this week, especially with Fed and ECB the week after. CPI will be the one to watch, but as I've said, this will drop in the next month no doubt with the fall in oil prices. 

That's all for this week, apologies for my brevity, but "why waste time say lot words when few words do trick".

Non-Sequitur: Madonna 

Again, no prizes for guessing this week's artist. It's Madonna. Madonna holds the record as the most successful female artist of all time. Wowza. Many facts I could draw from here, but let's stick with the easy ones... she's sold over 300 million records worldwide, is the highest grossing solo touring artist of all time, and once dated Vanilla Ice.