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Attachments: High Impact Events Trading... Gold & Copper
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High Impact Events Trading... Gold & Copper

Hello Sir,, What is your view on today's US PMI reports...
Quoting Rudrax
Hello Sir,, What is your view on today's US PMI reports...
Hi Rudrax. I hadn't seen this until now. I take it you were talking about ISM Non-Manufacturing PMI. I usually don't preview that data because it really doesn't impact it enough on a consistent basis. It is important, just not in terms of a very tradeable calendar event.
We must learn who is gold, and who is gold plated
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US Employment Data - January Preview

  1. Non-Farm Employment Change
  2. Unemployment Rate
  3. Average Hourly Earnings m/m

Forecasts

NFP

Most forecasts are falling within a range of about 142K to 190K. A very important consideration is the most recent forecasts, which are for the most part all toward the upper end of that range. That's a good sign that we could see a better than expected NFP number.


Unemployment rate

The rate is widely expected to come in at 3.5%, unchanged from the previous month.


Avg Hourly Earnings

While most forecasts are calling for 0.3%, there's a significant camp of economists predicting 0.2% reading. Both would be an improvement from the prior month, which was 0.1%.


Recent impact (gold, eur/usd, and usd/jpy)

Last month, the data didn't have as much impact as we've seen lately, while the Fed was providing a lot of certainty around interest rates. Since changing their chance to neutral, data in general will have slightly less impact. Here's how gold and the US dollar reacted last month.

Attached Image (click to enlarge)
Click to Enlarge Name: nfp.png Size: 24 KB


Outlook

As always, heavy volatility is expected. The market is pricing in a rate cut by the September FOMC meeting. Even though the Fed is sticking with its nuetral stance on rates, there's some risk in weaker than expected data triggering the pricing in of an earlier rate cut. Here's the outlook for rate probabilities for September per the CME's FedWatch tool:

Attached Image


As shown in last month's impact, there could ample opportunity to get into a trade after a trend emerges. Trading prior to the releases or on any knee-jerk reaction is too risky. NFP and hourly earnings are the ones to focus on. The unemployment rate shouldn't have too much impact at all, unless it beats estimates. Also, don't forget this release is very susceptible to revisions which can sometimes cause a whipsaw.


Caution is always advised. Good luck out there!

Attached Image



We must learn who is gold, and who is gold plated
Live All Time Return: 10.2%
Hiii Sir,,,
What is your view on today,s US event?
Quoting Rudrax
Hiii Sir,,, What is your view on today,s US event?
Hi Rudrax. Which event?

We have CPI and Retail Sales coming up in the next couple of days but I'd probably stay away from CPI. Ever since the Fed transitioned to rate neutral, inflation (among other data) has had lesser impact. Retail Sales, because of its history of significant deviations from forecasts, could provide more market volatility than CPI this week. It's also a lot riskier too.
We must learn who is gold, and who is gold plated
Live All Time Return: 10.2%
  • Post #406
  • Quote
  • Edited at 12:12am Feb 13, 2020 12:00am | Edited at 12:12am
Unemployment Claims is scheduled for tomorrow morning... Just for fun, I ran the Unemployment Claims timeseries through a few forecasting functions in R. Here were the results:

forecast_holt

Forecast Lo 80 Hi 80 Lo 95 Hi 95

206953.6 188037.8 225869.4 178024.4 235882.8


forecast_holt_damp

Forecast Lo 80 Hi 80 Lo 95 Hi 95

207547.1 188637.7 226456.4 178627.7 236466.4


forecast_ses

Forecast Lo 80 Hi 80 Lo 95 Hi 95

207548.1 188666.5 226429.8 178671.1 236425.1


forecast_naive

Forecast Lo 80 Hi 80 Lo 95 Hi 95

202000 182470.5 221529.5 172132.2 231867.8



I wouldn't recommend trading on any of these. They're just based on the historical trend so they're not particularly sophisticated. Still, I'll be interested to see which one comes closest.
Self-sufficiency is the greatest of all wealth. - Epicurus
Quoting EF5
Unemployment Claims is scheduled for tomorrow morning... Just for fun, I ran the Unemployment Claims timeseries through a few forecasting functions in R. Here were the results: forecast_holt Forecast Lo 80 Hi 80 Lo 95 Hi 95 206953.6 188037.8 225869.4 178024.4 235882.8 forecast_holt_damp Forecast Lo 80 Hi 80 Lo 95 Hi 95 207547.1 188637.7 226456.4 178627.7 236466.4 forecast_ses Forecast Lo 80 Hi 80 Lo 95 Hi 95 207548.1 188666.5 226429.8 178671.1 236425.1 forecast_naive Forecast Lo 80 Hi 80 Lo 95 Hi 95 202000 182470.5 221529.5 172132.2 231867.8 I wouldn't...
The actual came in at 205k so the holt model came the closest. This has been interesting, I think I'll make some more forecasts. Who knows, maybe I'll be able to make something useful from this.
Self-sufficiency is the greatest of all wealth. - Epicurus
Quoting EventsTrader
US Employment Data - January Preview Non-Farm Employment Change Unemployment Rate Average Hourly Earnings m/m Forecasts NFP Most forecasts are falling within a range of about 142K to 190K. A very important consideration is the most recent forecasts, which are for the most part all toward the upper end of that range. That's a good sign that we could see a better than expected NFP number....
When I started checking sensitivity of NFP data in 2017-18, average hourly earning turned out to be the winner. It make sense which is directly will impact the spending power. Do you have same observation?
Quoting tush1822
{quote} When I started checking sensitivity of NFP data in 2017-18, average hourly earning turned out to be the winner. It make sense which is directly will impact the spending power. Do you have same observation?
Wage inflation data has had higher impact from all the major economies, since 2017 or perhaps even earlier. I agree 100% tush1822.
We must learn who is gold, and who is gold plated
Live All Time Return: 10.2%
  • Post #410
  • Quote
  • Edited at 5:55pm Feb 19, 2020 5:40pm | Edited at 5:55pm
Ok, unemployment claims are up again tomorrow. Last week the Holt model was the best, here's what it's forecasting this week:

Forecast Lo 80 Hi 80 Lo 95 Hi 95

206476.2 184821 228131.5 173357.4 239595


I've also been playing around with ets() which automatically selects the best model for a data series. Ets generated the following forecast for this week:

Forecast Lo 80 Hi 80 Lo 95 Hi 95

206880.9 194156.1 219605.7 187420 226341.7


So both are calling for the 206-207k range, slightly below the Metals Mine forecast at 210k.
Self-sufficiency is the greatest of all wealth. - Epicurus
The G7 finance ministers and central bankers are holding a conference call tomorrow to discuss the coronavirus. It's going to be a big market mover. While there's no sign that central banks are planning any coordinated intervention, they will likely send signals that easing is coming.

Currently, the markets are pricing in a 100% chance the Fed lowers rates by 50 basis points at the next meeting in March.
Attached Image (click to enlarge)
Click to Enlarge Name: SNAG-0003 3-2-2020 3.59.49 PM.png Size: 38 KB
We must learn who is gold, and who is gold plated
Live All Time Return: 10.2%
WOW. Fed cuts rate at an unscheduled meeting by 50 basis points! First time they've taken that kind of aggressive action since the financial crisis. I'm wondering what the CME FedWatch tool is going to change to.
We must learn who is gold, and who is gold plated
Live All Time Return: 10.2%
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