Traders Market Weekly: Bear Jitters as Risk Factors Deepen

May 22- 28, 2022

FEAR NOT Brave Investors

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The Week That Was – What Lies Ahead?

Contents

Click on the links below to navigate to the relevant section.

• Part A: Stock markets
• Part B: Bonds
• Fed and Banks
• Part C: Commodities
• Energy – Oil and Gas
• Gold and Silver
• Part D: Foreign Exchange
• Geopolitics and Economics
• Economy Week ahead

Editorial

Friday saw another sharp reversal off a key S&P support levels but not enough to alter the fact the weekly decline in the S&P 500 was the seventh in a row, which is the longest streak since 2001, (longest streaks were 8 weeks in 2001 and 1970.). Equity markets rose before the US session after PBOC provided a stimulus trigger by cutting five-year loan prime rate 15 basis points to 4.45%. However, this quickly turned sour with realization the move highlighted the weakness of the Chinese economy which China has been trying to pop with $5.3 Trillion so far.

The US is a consumer led economy and this week we saw the release of major retailers’ earnings which proved to be a disaster.

• Target Misses Earnings Metrics as Margins Collapse on Soaring Expenses
• Home Depot Delivers Record Sales and Raises Guidance and Margins
• Walmart Earnings Hit by Inflation, Lowers Forward Guidance

The macro framework continues to evolve with Russia getting ready to annex parts of southeast Ukraine, according to New York Times. Oil prices have this, and the fact National average gasoline prices hit record-high $4.59/gallon German PPI up record-high 33.5% year-over-year in April to contend with. In commodity markets the biggest event is the Australian election Saturday where the Labor party is expected to oust the governing LNP. The big questions for markets are the relationship with China and mining and energy policies with the change in leadership.

Key Spreads

• 10 year minus 2 year: +0.20%, down -0.15 w/w (-0.12 – 1.59)
• 10 year minus 3 month: +1.75%, down -0.20% w/w (-0.99 – 2.04)
• 2 year minus Fed funds: +1.78%, down -0.08% w/w
• 30-Year conventional mortgage rate 5.35%, down -0.03% w/w (1-yr range 2.75-5.64)

For the week ahead we get earnings from the Nvidia and Zoom. The week starts with elections in Australia over the weekend with the ALP expected to win and the independents holding a new balance from the traditional parties. We’ll also get rate decisions from New Zealand and Turkey, as well as minutes from the last Fed meeting. The Fed’s Raphael Bostic will speak about the economic outlook on Monday and Esther George will give a speech on Wednesday. Both supports raising rates by 50-basis points.

President Biden’s is on a five-day Asia trip that will include a press conference with South Korean President Yoon Suk Yeol, a meeting with Japanese Prime Minister Fumio Kishida, and the Quad summit in Japan.

When Risk Explodes:

The fed funds futures market, according to the CME’s FedWatch Tool, has placed a 78.6% probability to a 75-basis point rate hike at the June FOMC meeting versus 82.9% yesterday.

High-yield Credit default swaps Surge

• High-yield Credit default swap (CDS) prices surged 39 this week to 523 bps, trading intraday Friday above 530 bps for the first time since June 2020.
• After beginning the year at 2.78, high yield spreads to Treasuries have widened over 100 bps in three weeks to an 18-month high 4.82 percentage points.
• The iShares High Yield Corporate Bond ETF (HYG) has declined 2.3% this month (down 10.8% y-t-d), underperforming both the iShares Investment Grade ETF (LQD) (positive 0.1%) and the iShares Treasury Bond ETF (TLT) (negative 0.6%).

Oil prices have continued to push higher since US continues to drain it’s SPR which have not alleviated product shortages and the headline risk around the EU phasing out Russian oil by year end. The EIA reported distillates stocks are at 14yr low as demand for jet fuel and diesel take off. Padd 1 diesel inventories are at 25-year lows.

The rubber is meeting the road as the trifecta of rising interest rates, the Russian invasion of Ukraine and surging costs continues to weigh on the markets, this has been no surprise to us here and shouldn’t have been to the market and PTB. You can only play with fire for so long before you get scorched!

This down move has been like a slow train coming. We saw most of the major banks getting cracked after reports three weeks ago, including Goldman Sachs Morgan Stanley and four of the largest U.S. lenders Wells Fargo, Citigroup and PNC reporting double-digit drops in first quarter profit. From an 11% decline at Morgan Stanley to a 46% drop at Citigroup.

Oops: A fun fact is April was historically the best month for stocks from a seasonality perspective, can the ongoing market volatility and headwinds fall into place again?

Inflation Matters

Food prices are surging, with that expect to see even higher grocery store and energy bills as elevated commodity prices send the fallout from Ukraine’s humanitarian crisis rippling across the world in the coming weeks.

“Federal Reserve Bank of Kansas City President Esther George said the ‘rough week in the equity markets’ was not surprising, partially reflecting the central bank’s policy tightening, and doesn’t alter her support for half-point interest-rate hikes to cool inflation. ‘I think what we are looking for is the transmission of our policy through markets’ understanding that tightening should be expected,’ … ‘It is one of the avenues through which tighter financial conditions will emerge… Right now, inflation is too high, and we will need to make a series of rate adjustments to bring that down… We do see financial conditions beginning to tighten so I think that’s something we’ll have to watch carefully. It’s hard to know how much will be needed.’”

May 19 – Bloomberg (Steve Matthews)

With all the redirection of blame at the Fed about inflation one has to understand it is a global phenomenon outside the Fed’s Control. With the war drums louder than ever the supply chain issues are out of control. The Federal Reserve is not in control of global energy and commodities prices.

Everything points to powerful inflationary dynamics and a Federal Reserve so far “behind the curve.”

The Fed has kicked off its first real tightening campaign since 1994, with securities markets already at the brink of illiquidity and dislocation. Markets could soon be screaming for assurances of the Fed’s “buyer of last resort” liquidity backstop, while the Fed is prepared to begin withdrawing liquidity by selling Treasuries and MBS. .

 Here is a dose of reality. or was it all just money laundering?

“The nonfungible token of Jack Dorsey’s first tweet, which sold for $2.9 million last year to Sina Estavi, failed to garner much in the way of interest when it was recently put up for resale, Coindesk reports. The auction for the NFT closed with only seven offers ranging from just 0.0019 Ether to 0.09 ETH, or about $6 to about $280. A far cry from the $48 million sought by the owner.”

April 13 – Bloomberg (Patrick McHale)

Another important aspect is the Fed doesn’t Control corporate pricing or wage decisions. Let us be clear geopolitical, climate change developments and what an out of depth, politically motivated administration are outside the Fed’s sphere of influence. There has been over $5.1 Trillion new “money” in 126 weeks, it’s a reasonable conclusion the Fed has lost control of Inflation.

Volatility

Rate markets are sending an exhaustive message to the Fed that it should commence aggressive tightening measures. On the flip side is a sputtering overly extended equities bubbles they must handle with kid’s gloves.

Monetary inflation is running wild. In 2021 Federal Reserve Credit expanded $1.391 TN or 19% to a record $8.742 TN. The Fed’s balance sheet inflated a mindboggling $5.015 TN, or 135%, in the 120 weeks since QE was restarted in September 2019. Federal Reserve Assets have now inflated 10 times since the mortgage finance Bubble collapse.

We need to grasp all the risks to be wary off and received plenty of flak from it. We always talk here about expect the unexpected and now that is front and center, gage the market’s reaction, the market is always right and that’s why we focused on the crowd psychology aspect over the past few weeks.

We are in an openly hawkish phase since late last year when the New York Fed president John Williams, who is a voting member continued with his hawkish tilt of late. He said we are seeing broader based increases in inflation. Fed Governor Bullard told US Core PCE Is “Quite High” and added that the Fed should take towards a more hawkish policy in the next couple of meetings. Then we had Fed Governor Christopher Waller say the rapid improving job market and deteriorating inflation data have pushed him towards favoring a faster pace of tapering and more rapid removal of accommodation.

“We have a market trying to interpret the Fed who is trying to find out how they can interpret their long-only portfolio at a risk parity where rates cannot rise.”

– MoneyNeverSleeps

Our weekly reminder for risk, timely given the V shape surge in commodities just a week. The downside is clear with the absence of moral hazard from repeated Federal Reserve market bailouts in an environment of some would say obscene liquidity pumps. Pure greed is the other part, not wanting to miss out on fees. The obvious question is, how deeply ingrained is this attitude through the markets? How do we ween the markets off this continuous dip feed? At this point the Central Banks have kicked that answer down the road.

We apologize members of the team were away at a conference this weekend, so we have not been able to update the charts and week that was and ahead. The long-term charts hold largely the same. We will update and walk through during the Market Wrap Podcast through the week.

Note charts and Data Below from Last Week’s weekly Bulletin.

PART A – Stock Markets

Highlights – USA

• S&P500 dropped 3.0% (down 18.1% y-t-d),
• Dow fell 2.9% (down 14.0%).
• Nasdaq100 sank 4.5% (down 27.5%).
• S&P 400 Midcaps slumped 1.9% (down 16.1%),
• Small cap Russell 2000 declined 1.1% (down 21.0%).
• Utilities increased 0.4% (down 1.6%).
• Transports sank 6.7% (down 18.1%).
• Banks declined 0.7% (down 19.4%),
• Broker/Dealers fell 1.3% (down 19.1%).
• Semiconductors dropped 3.0% (down 27.0%).
• Biotechs increased 0.7% (down 17.5%).
• With bullion recovering $35, the HUI gold index rallied 3.5% (down 1.0%).

US Markets YTD

• Dow Jones Industrial Average -14.0% YTD
• S&P 500 -18.1% YTD
• Russell 2000 -21.0% YTD
• Nasdaq Composite -27.4% YTD

Highlights – Europe Stocks

• U.K.’s FTSE equities index slipped 0.4% (unchanged y-t-d).
• France’s CAC40 fell 1.2% (down 12.1%).
• German DAX equities index slipped 0.3% (down 12.0%).
• Spain’s IBEX 35 equities index jumped 1.8% (down 2.6%).
• Italy’s FTSE MIB index increased 0.2% (down 11.9%).

Germany’s benchmark Blue Chip DAX 30 index (Deutscher Aktienindex) expanded to 40 companies on 20 September adding 10 new members to the German stock index from the MDAX which will be reduced from 60 to 50 members.

 Highlights – Asia Stocks

• Japan’s Nikkei: +1.3% (+1.2% for the week)
• Hong Kong’s Hang Seng: +3.0% (+4.1% for the week)
• China’s Shanghai Composite: +1.6% (+2.0% for the week)
• India’s Sensex: +2.9% (+2.9% for the week)
• South Korea’s Kospi: +1.8% (+1.4% for the week)

 Highlights – Australian Stocks

• Australia’s ASX All Ordinaries: +1.2% (+1.1% for the week), snaps a 4-week losing streak
• Stronger iron ore prices lifted giants BHP Group, Rio Tinto and Fortescue with gains between 1.5 per cent and 3.4 per cent on Friday

The Australian ASX 200 Stock Market Closed Up 13% in 2021 With Lithium Plays Starring

 Highlights – Emerging Markets Stocks 

EM equities were mixed.

• Brazil’s Bovespa index rose 1.5% (up 3.5% YTD),
• Mexico’s Bolsa index surged 3.9% (down 3.3%).
• Turkey’s Borsa Istanbul National 100 index fell 1.9% (up 27.7%).
• Russia’s MICEX equities index rallied 2.8% (down 37.3%).

Biggest SPX Stock Winners and Losers Last Week

S&P 500

Daily: SPX500 performed a perfect double bottom this week’s and by week’s end had completed a perfect measured 3 wave move on the 240 Murrey Math highlighted in the podcast. We bounced through the downward channel pulled by the twist ‘helium contusion’ on the completive. Recall the fuel from the top of the channel after completing 3 waves off ATH, accelerated after broke the Tenkan through to the 4600 OI where it reversed with impulse back to Tenkan Bulls this a (ii) of a 5. Bears this is 1-2 of (i) completive V of degree. We watch if this low was a (iii), (a) or C. We have to respect the number of alternatives of degree of 5. With such trends keep it simple support is Tenkan and Kijun and watch for ABC. From no fear to panic is the driving element.

Recall SPX completed 5 waves up where it reversed with impulse with energy fueled from the power impulse down from +1/8 ATH spit of a spit fail. On the way down (just like up) it accelerated after it broke the Tenkan through the rejected Kijun and then through the median after tapping 8/8.

The break up was from above the 200dma. The balance from sharp reversal after the initial 3 wave down from the SPX wave 5 extension as Covid19 fed impulse accelerated under the Tenkan. From there we had seen the ABC or 1-2-3 spinning around the 61.8% of the move. Support began at the October 2019 lows. A manic wave 5 or 3 of some degree was a resolution for the ages. Note the 100% extension from the emotive element and MM levels when the spit kicks in. A manic wave 5 or 3 of some degree was a resolution for the ages. Note the 100% extension from the emotive element and MM levels when the spit kicks in

Weekly:

The S&P closed right on the weekly Kijun after blasting through the downtrend on quad witching. We corrected the reversal of the breakup at Tenkan from there we had had a powerful rally to ATH. Each new high evolved after testing Tenkan key support, we are now getting a retest as resistance, making it support on this move. We reiterate this needs to be recovered for a resumption of the uptrend. We broke the Tenkan this week and watch for Kijun reaction. Extensions are difficult to time, keep it simple.

Key for the impulse higher was the spit or retest of MM 8/8 and Tenkan San, which held with the previous highs and Tenkan.  To repeat  “We look for 3 waves down and reactions to keep it simple with the alternatives in the daily.”  Keep an eye on the put/call ratio with recognition to the sheer size of contracts AND keep in mind the stimulus distortion. The spit per channel fractal and Adams rule launched back over the cloud where we were encased AND we are back testing it. Watch if a spit or clear break support as Chikou rebalances

A reminder that Apple Inc $AAPL, Microsoft Corp $MSFT, Amazon.com Inc $AMZN, Facebook Inc $FB, and Google-parent Alphabet Inc $GOOGL make up approximately 23% of the total weight of the S&P 500. With that comes gyrations that are an outsized impact on broader markets

Dow Jones

The Dow tested its weekly up channel after bouncing back to test the Tenkan and Kijun we watch for the reaction here. Resistance is the channel, support the cloud and previous breakups.

NASDAQ 100

Nasdaq spat the weekly cloud to the MM 6/8 and Tenkan confluence where it closed with the cloud top and Kijun above. Immediate resistance is this confluence. Recall ATH was after it broke and held the weekly Tenkan to see a spit of a spit fail which is completive of 5 of some degree with Chikou rebalancing. From there we sold off right to Tenkan (as did SPX) and here we are. Watch Chikou for divergence for continuation or failure. Divergence with Russell also a clue. Support Channel and cloud.

Russell 2000

The small cap Russell RUT had been developing a large flag which it did a false break to fuel the selling from there we replicated to the down (Adam’s theory).

Russell 2000 low-price tested the 38.2% retracement of the move up from the March 2020 low before bouncing higher.

Unlike SPX we could not get through Tenkan and Kijun which rejected the bounce highlighting its weakness. However, like the NASDAQ we broke above the tenkan. This is the index showing more of the fast money crowd and is trading like it. Closed right in the middle of the cloud. Needs to get traction in here for bulls. 8/8 Support now and then cloud base

Semiconductors SMH

Semiconductors SMH clean with reaction from above reverted with the retest & break of the triple top patterning in a pennant. Pull from Chip Shortage players $ON $TSM $NVDA $ASML $AMD $QCOM $AVGO $TXN $INTC $AMAT $LRCX $XLNX saw Semiconductors rise 2.9% (up 40.0% YTD)

NVidia $NVDA

In the bull swing following the announcement of NVDA 4/1 split some levels off the energy break NVidia didn’t look back with many gaps below. We saw another power move off the $200 retest (old $800) & earnings off $300 which failed on the retesting. It is a clear leader of #SOX #SMH look for cues there and ABC failures for changes. Held the base channel ahead of earnings this week.

Apple $AAPL

On the way up Apple gently motored up to new ATH over the massive $160 then $170 thru to $180 gamma level on the way down these levels became key energy levels. Support held at the previous break near 50wma to close over Tenkan and Kijun as it rebalanced Chikou. Resistance now Fibs and Murrey Math levels. Remember the impact $AAPL has, at least short term on all the major indices.

Amazon $AMZN

Amazon double top that filled the gap in 3 waves then reversed through 50wma then gained impulse. We got a KOD to accelerate through cloud to close the week at a 3/8 spit. Earnings ahead.

ARKK ETF

The ARK Innovation ETF (ARKK), which is filled with growth stocks and was the top-performing U.S. equity fund tracked by Morningstar in 2020, is down over 26% so far this year.

The ARKK ETF trading clinically, tested triangle breakdown and failed off 50 WMA. Trying support at 61.8% of whole move. Clear crowd behavior, we saw ATH in NASDAQ & SPX, yet this couldn’t raise a bid – very telling negative divergence. $ARKK rebalanced Chikou at week’s end

US Stocks Watch

Investors (and algos) will focus on the conference calls and outlooks. Last quarter everyone expected the worse, we saw critical updates on production in coronavirus impacted regions and if there is extended halting of operations weighing on multi-nationals. 

Earnings Highlights This Week:

Monday includes

• Pre-Market:  
• After-Hours:   Zoom ZM

Tuesday includes

• Pre-Market:  Best Buy BBY, AutoZone AZO, Intuit (INTU), Luckin Coffee (OTCPK:LKNCY), Ralph Lauren (RL)
• After-Hours: Toll Brothers TOL, Nordstrom (JWN)

Wednesday includes

• Pre-Market:  Dick’s Sporting Goods (DKS), Williams-Sonoma (WSM)
• After-Hours: Nvidia NVDA, Snowflake (SNOW), Box (BOX).

Thursday includes

• Pre-Market: Macy’s M, Alibaba (BABA), Dollar General (DG), Workday (WDAY).
• After-Hours:  Costco COST, Gap (GPS)

Friday includes

• Pre-Market:  Canopy Growth CGC Sanderson Farms (SAFM)
• After-Hours: None

“U.S. companies are rushing to cash in on soaring stock prices. It isn’t just the white-hot market for initial public offerings. Companies are returning to the public markets to issue shares and raise cash from investors at the same time that existing shareholders are tapping the public market to unload their stockholdings at a record clip. Companies including Zoom Video Communications Inc. and Norwegian Cruise Line Holdings Ltd. have sold billions of dollars of shares this year… There have been 556 follow-on offerings, or stock sales by companies or existing shareholders, among U.S. companies this year, the most since 1996, according to Dealogic… They have raised a total of $133 billion. Behind the boom in share issuance? An ascendant stock market.”  August 25 – Wall Street Journal (Gunjan Banerji):

IPO Wrap

US IPO Week Ahead:

No new IPOs are expected to start trading next week.

Quiet periods expire on Tenon Medical (NASDAQ:TNON), Ostin Technology Group (OST), HilleVax (HLVX) and Belite Bio (BLTE) to free up analysts to post ratings. BLTE is the only one of the groups to trade over its IPO pricing level.

Part B: Bond Markets

Inflation with Henry Kaufman

Kaufman is the legendary chief economist and head of bond market research at Salomon Brothers is someone who knows Inflation.  Henry Kaufman in an interview with Bloomberg’s Erik Schatzker Jan 14, 2022:

 “I don’t think this Federal Reserve and this leadership has the stamina to act decisively. They’ll act incrementally. In order to turn the market around to a more non-inflationary attitude, you have to shock the market. You can’t raise interest rates bit-by-bit.”

“The longer the Fed takes to tackle a high rate of inflation, the more inflationary psychology is embedded in the private sector — and the more it will have to shock the system.”

“‘It’s dangerous to use the word transitory,’ Kaufman said. ‘The minute you say transitory, it means you’re willing to tolerate some inflation.’ That, he said, undermines the Fed’s role of maintaining economic and financial stability to achieve ‘reasonable non-inflationary growth.’”

Highlights – Treasuries

“This is shaping up to be the most volatile year for Treasuries in over a decade, as uncertainty about the impact of aggressive Federal Reserve tightening whipsaws yields. The yield on 10-year US notes has traded in a range of at least 10 bps in 50 of 95 trading days so far in 2022. That puts it on track for an annual rate of more than 130 episodes, which would be the highest since 2009.”

May 18 – Bloomberg (Garfield Reynolds)

Investment-grade bond funds saw outflows of $4.269 billion, and junk bond funds posted negative flows of $2.605 billion (from Lipper).

U.S. Treasuries finished the week on a firmly higher note with longer tenors leading. This week’s rally pressured the 10-yr yield to its lowest level in over three weeks while the 2s10s spread tightened by 14 bps to 21 bps.

• 2-yr: -3 bps to 2.58% (-1 bp for the week)
• 3-yr: -6 bps to 2.73% (-6 bps for the week)
• 5-yr: -4 bps to 2.81% (-8 bps for the week)
• 10-yr: -7 bps to 2.79% (-15 bps for the week)
• 30-yr: -7 bps to 3.00% (-9 bps for the week)

All good until markets hold up but take note that the loosest financial conditions in history have supported record corporate debt issuance. While easy credit availability has supported economic activity, funding new investment whilst keeping vulnerable companies afloat. The combination of urban shifts through virus and riots fears fueled a booming MBS market and record low mortgage rates pushed strong housing markets into Bubble risk territory.

Highlights – Mortgage Market

• Freddie Mac 30-year fixed mortgage rates declined five bps to 5.25% (up 225bps y-o-y) – near highs since August 2009.
• Fifteen-year rates fell five bps to 4.43% – near highs since December 2009 (up 214bps).
• Five-year hybrid ARM rates jumped 10 bps to 4.08% (up 149bps).
• Bankrate’s survey of jumbo mortgage borrowing costs had 30-year fixed rates down 18 bps to 5.37% (up 226bps).

Highlights – Federal Reserve

• Federal Reserve Credit last week expanded $14.8bn to a record $8.919 TN. Over the past 140 weeks, Fed Credit expanded $5.193 TN, or 139%.
• Fed Credit inflated $6.109 Trillion, or 217%, over the past 497 weeks.
• Fed holdings for foreign owners of Treasury, Agency Debt last week added $0.4bn to $3.423 TN.
• “Custody holdings” were down $108bn, or 3.1%, y-o-y.
• Total money market fund assets fell $16.2bn to $4.485 TN. Total money funds were down $56bn, or 1.2%, y-o-y.
• Total Commercial Paper gained $8.4bn to $1.121 TN. CP was down $77bn, or 6.4%, over the past year.

Highlights – European Bonds

• Greek 10-year yields surged 24 bps to 3.71% (up 21bps y-t-d).
• Ten-year Portuguese yields rose seven bps to 2.13% (up 167bps).
• Italian 10-year yields jumped 15 bps to 3.00% (up 183bps).
• Spain’s 10-year yields gained eight bps to 2.08% (up 152bps).
• German bund yields were little changed at 0.94% (up 112bps).
• French yields added a basis point to 1.47% (up 127bps).
• The French to German 10-year bond spread widened one to 53 bps.
• U.K. 10-year gilt yields rose 15 bps to 1.89% (up 92bps).

Highlights – Asian Bonds

• Japanese 10-year “JGB” yields were little changed at 0.24% (up 17bps y-t-d).

Part C: Commodities

Highlights

• Bloomberg Commodities Index recovered 1.7% (up 31.6% y-t-d).
• Spot Gold rallied 1.9% to $1,847 (up 0.9%).
• Silver jumped 3.1% to $21.78 (down 6.6%).
• WTI crude rose $2.74 to $113.23 (up 51%).
• Gasoline dropped 3.1% (up 72%),
• Natural Gas rallied 5.5% (up 117%).
• Copper gained 2.4% (down 4.2%).
• Wheat slipped 0.7% (up 52%),
• Corn dipped 0.3% (up 31%).
• Bitcoin fell $550, or 1.8%, this week to $29,250 (down 37%).

Risk markets continue to respond to the war in Ukraine and the supply crisis from the Coronavirus outbreak and lockdowns.

BDI Freight Index

• The Baltic Exchange’s dry bulk sea freight index rose on Friday gained 55 points, or 1.7%, to 3,344 points for a sixth consecutive weekly rise on stronger vessel rates across segments. The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels rose 7.7% for the week.
• The panamax index which tracks cargoes of about 60,000 to 70,000 tonnes of coal and grains, was up 12 points, or 0.4%, at 3,382 points. The segment rose for a third consecutive week, gaining 3%. Average daily earnings for panamaxes increased $114 to $30,440.
• The capesize index rose 141 points, or 3.2%, to 4,526 points. The index rose for a sixth straight week, up 14.7%. Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were up $1,170 at $37,538.
• The supramax index for smaller vessels gained 16 points to 2,816 points and gained 2.3% this week.

Source: Baltic Sea Freight Index Higher for Sixth Straight Week as Benchmark Iron Ore Futures Surged

Aluminum (Alcoa)

We analyze Alcoa as a surrogate to Aluminum given its high beta relationship and more liquid aspect as an investment vehicle.

We have seen $AA retest the previous high after the +3 Spit as the Chikou rebalanced. We have the Gap below at +1/8 confluence. We move to 240 for this pennant resolution.

Copper

Copper rebounded sharply off the 50wma but again has failed on the cloud spit and channel break. The flattening Weekly Tenkan and Kijun acted as a magnet to close right there. #HG power spits have quickly rebalanced back into the wide channel. Copper had been a leader in the risk on movement for commodities.

Lumber

Grains

“Farmers are in a race against the clock to get their crops in the ground this week, with planting of corn, soybeans and wheat well behind their usual pace. Wet and cool temperatures in key parts of the Midwest have delayed farmers’ planting plans, leaving them days to get crops in the ground before they start to lose out on a bigger harvest. If they don’t, some grain traders say that already high prices for agricultural commodities could rise even more… The U.S. Department of Agriculture said 22% of corn was planted, compared with 50% for the previous-five-year average. For soybeans, 12% was planted, compared with the previous-five-year average of 24%, and 27% of spring wheat was in the ground compared with a typical 47%…”

May 11 – Wall Street Journal (Patrick Thomas and and Kurk Maltais):

Wheat

We analyze the WEAT ETF as a surrogate to Wheat given its high beta relationship and more liquid aspect as an investment vehicle.

At the start of the week Wheat jumped by the exchange limit to near a record high after India’s move to restrict exports, exposing just how tight global supplies are during the war in Ukraine and threatening to drive up food prices even more. The government will suspend overseas sales to manage its food security.

WEAT broke the large pennant after it spat 8/8, and the minimum target. We have completed a measured 4/8 correction off highs meaning key support as that base, the 50dma and the pennant confluence.

Corn

Corn extended its rally to the highest since 2012 in Chicago to +1/8 and has corrected back to the Tenkan. Major grower and shipper Brazil, the center-west region had a dry April, hampering corn in its final development stages before harvest. U.S crops are just being sown, wet and chilly soils has left the plantings pace at its slowest start since 2013.

Soybeans

Soybeans tested the previous +1/8 again to rally just under the Tenkan as it remains in the pennant. Futures continue to pivot the $16/bushel benchmark. Futures spat the Weekly +4/8 over $17.50/bushel twice. The flattening Kijun the magnet just under the 8/8. The weekly cloud and 50wma mingle around the $146/bushel benchmark.

Energy

US Crude Oil (WTI)

Daily:

Another big week for oil, April WTI crude oil (CLJ22) futures settled at $115.68 per barrel. That’s the highest close since September 2008. The high price$115.94, low price today $107.29. For the week, the price is up over 25%. The power was this move was built after hitting our initial 8/8 target completing a iii of (5) or (iii) of 5 as marked. From there we saw a sharp ABC higher and MM recalculation higher. We are in a completive mode with this impulse, it’s a question of degree on the topside, use the Murrey math 240/60 grid. On the way up potent WTI price action indicative of 3rd wave energy highlighted by spits of the Tenkan to new highs.

Recall prior to this move the completion in 5 waves (iii or i) saw heavy selling with eventual confluence kiss of death with 50dma at the top of the cloud. From there down in 3 waves, completing a C or IV? Support wasn’t found until 0-8. From there we have accelerated higher through the cloud twist. Support Kijun and Tenkan. Closed above 50dma with grid above.

The key is crowd behavior to help tell the story which in energy is often around geopolitics. A great example of why we watch ABC corrections and from here we get the energy from the break being balanced. This move that was powered by 50 dma Tenkan spit of a spit – hence the fractal energies reverberations. Support is previous lows, Murrey Math levels and Fib cluster. Support is the 50dma, kijun, tenkan and prev high confluence.

Weekly:

WTI crude Oil futures continued higher with aggression after corrected the sell off after it’s measured move reversed from 7-year highs and regained them right to the top of the weekly channel with the downside open. Support is the median and Tenkan/Kijun. Long term 61.8% target fueled the spit of a spit by ABC bull flag after rebalanced Chikou sated the 5 waves. Resistance the Murrey Math levels and previous breaks (off monthly)

These are special times, recall “After we regained the pattern 261.8% from the extreme (-$40) move. The climax of the larger acceleration lower after broke the weekly uptrend, a fractal of the sharp and all the way to all time lows to negative pricing we have seen mirror replications.” Support is previous channels, tenkan and Kijun. Above we have Murrey Math time and price 

US Natural Gas (Henry Hub)

Daily:

US Natural Gas has continued higher after it completed 3 waves correcting the daily 8/8 spit correction to -2/8. Two clear alternatives, we are correcting the highs 5 or that was a 3 and we go higher. We closed over the 2 most recent highs and +1/8 right. Support is Tenkan, Kijun below.

The Cloud top broke Kijun and Tenkan with a kiss of life. Meaning that 3 was either an a i or iv– impulse in a nutshell. Prior to this move the adjunct failure of the 50dma and Tenkan opened up the retest of 3.80-3.60 last time which fueled this week’s move higher. From there we fell sharply to the Kijun, A completion of 4 (bear) or (i) of 5 (bull) which gave this move sustenance

Notice the fractals of the move after completing the C of 4 bullish scenario played out the consolidation phase since it completed its IV (Bull Case) last year since then a series of 3 waves. For the bulls all this needs to hold for the highs to be a (iii) looking at possibilities we have the 161.8% at 7.026 if we get ‘silly’ 50dma support.

Like the larger wave on the way up it accelerated through previous highs (flat topped triangle energy) and over the resistance at 8/8 and new highs. We successfully tested that break in a pennant ABC. Previous highs (flat topped triangle energy) and 8/8 and new highs underscore the structure that fed the move and is key longer term.

Weekly

Notably no sharp reversal, like the previous impulsive spikes. We saw a clean break of the Kijun to close back over near highs. This move was fueled by a fractal of the classic double top playing out after a spit of the weekly Kijun was sent back off Tenkan only to reverse all the way to spit the 50wma for the energy needed. Resistance is Previous highs and Murrey Grid.

The Natural gas rebalanced after continued to fail and retrace with impulse after reaching its major target, the double top potential from 2014 which equated nicely to over 8/8 Weekly and showed true impulse off that to rebalance Chikou. It’s now a question of degree, 3 or 5? Impulse just shy of the 8/8 and Tenkan confluence. A question of continuation with the 50wma as resistance and cloud as support.

Recall the impulse wave powered from the spit of 50wma to get over weekly Kijun and Tenkan.  This was energized with a series of fractals between old 38 and 50% channel, as you would expect in a seasonal commodity with weather a prime mover. Resistance is Fib/Murrey confluence, support Tenkan, Kijun – as always count your ABC’s

Key Energy Reports

• Around The Barrel – Crude Oil Outlook with A Desperate United States Turning to Iran with Prices Vertical
• Into The Vortex – Natural Gas Outlook with Threats of Russian Ukraine Conflict Hitting Global Supply
• ExxonMobil Delivers Big Earnings, Continues to Pay Down Debt as Oil and Gas Prices Surge
• The Energy Crisis and Volatility See Natural Gas and VIX the Best Performing Futures in January
• Chevron Earnings Miss on Weaker Production Outweighing Gains from Soaring Oil and Natural Gas Prices
• Natural Gas Squeezes in Largest One Day Percentage Move on Record as Traders Caught Short Molecules
• Australian Coking Coal Record High with Strong Demand in Korea and Japan
• OPEC Monthly Oil Market Report January 2022
• Lower US Producer Price Inflation Dependent on Oil Prices
• Fitch Outlook For North American Oil & Gas is Neutral in 2022

Precious Metals

• Spot Gold rallied 1.9% to $1,847 (up 0.9%).
• Silver jumped 3.1% to $21.78 (down 6.6%).

Gold

Gold futures settled $8.00 Friday lower (-0.4%) to $1,954.20/oz, up more than +1% on the week. The yellow metal is consolidating after it accelerated after breaking the weekly triangle higher. Gold has bounced after support at it’s uptrend line since the August 2021 bottom and Kijun. It garnered strength after rebalancing after manic rise to +5/8 weekly rebalance of Chikou in 5 waves. To be bullish we need to stay above the triangle. Murrey Math resistance, watch Fibs & Chikou.

Silver

Silver, like Gold bounced under the cloud base. Back underr 50wma after spitting Tenkan providing support after reversed. Closing under weekly Kijun which is now resistance. Major support is previous lows

Part D: Forex Markets

John Maynard Keynes, 1920: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

Highlights

For the week, the U.S. Dollar Index rose 0.4% Friday to 103.15, narrowing this week’s loss to 1.3% (up 7.8% y-t-d). It has been trading back from a nine-year high.

Majors:

• For the week on the upside, the Swiss franc 2.7%, the British pound 1.8%, the euro 1.5%, the Australian dollar 1.4%, the Japanese yen 1.1%, the Canadian dollar 0.7%
• On the downside, nil

Minors

• For the week on the upside, the Brazilian real increased 3.7%, the South African rand 2.0%, the New Zealand dollar 1.9%, the South Korean won 1.3%, the Mexican peso 1.2%, the Swedish krona 1.2%, the Singapore dollar 0.9%, the Norwegian krone 0.3%. The Chinese (onshore) renminbi rallied 1.44% versus the dollar (down 5.03% y-t-d).
• On the downside nil.

 Australian Dollar – AUDUSD

The Aussie dollar since completing a 5 at the pysch 80 level it has fallen & continued to correct under the weekly cloud in emotive fashion. The Australian dollar fell to a test of the lows of 0.6800 at 4/8 China lockdown fears and AUDUSD forwards before finding support. The Aussie rallied back over .70 heading into the weekend elections. Support is the Murrey Math Levels. Resistance also the Cloud, Tenkan and Kijun like many commodities.

New Zealand Dollar – NZDUSD

The Kiwi mirrored the AUD in its wave (iii) spit to lower channel wing. Momentum built from the cloud tap and rejected 50% Fib & 4/8 confluence. Kijun and Tenkan Resistance, which is pivotal. Support previous break spits and channel. We closed back at the old 61.8% break.

Canadian Dollar – USDCAD

The Loonie began with another tough week with the USD’s broad rise in a market with a low-risk appetite and high volatility. This changed by week’s end as an improving fundamental background for the CAD of strong growth, hawkish central bank, favorable terms of trade. The USDCAD reversed its surge over 1.30 with the Tenkan below led by the AUD and NZD as it spat the weekly flat-topped triangle. Higher US yields has negated much of the oil price impacting direction. Watch flat Kijun and Tenkan. Use Fibs for support and resistance.

Euro – EURUSD

The Euro reversed off the bottom outer channel closing at $1.056, reversing last week’s lowest closing rate since 2017. Euro continues to correct in what seems like eternal flags in the channel. We watch if Kijun (pink) testing Tenkan (orange) creates any impulse as EURUSD develops in the channel. Watch 3 waves to see development for continuation. Watch also for impulse off Chikou rebalance. Again, governed by EURGBP and Bund volatility

British Pound – GBPUSD

British pound had its biggest weekly gain since December 2020 against the dollar as the latest economic data suggested the market might not need to scale back its expectations for Bank of England rate hikes much further. It found support at MM 2/8 which also May 2021 1-2 test. Above we have channel and Tenkan confluence and flattening Kijun for strength. The upcoming week will be heavy on UK data, which could mean an eventful week for the British pound.

Euro Pound – EURGBP

EURGBP after testing 50wma back tested to break back above a messy bill flag and to the cloud as the GBP rallied. Kijun, 50wma and clouds resistance.

Japanese Yen – USDJPY

USDJPY is correcting with the weakness in Treasury yields after spitting +2/8 and channel convergence at 132.00. On the way up the price accelerated after the close above the Tenkan over 114 hence the pull for it to correct. The Murrey Math level should remain massive support for dollar-yen. Any change will come from the weekly Kijun as it breaks through the old channel. Use your USDJPY Murrey grid for now. EURJPY AUDJPY will determine risk on/off. The Tenkan is the natural balance of support ahead.

Mexican Peso USDMXN

The Peso continues in the long triangle and consolidates despite outside uncertainty from oil and high rates. Use the Gann octave and the extension fibs to help measure the noise.

Turkish Lire USDTRY

The Turkish Lira slow decline continues after the wild 18-10 USDTRY swing last year reversed after falling in 3 waves to explode over the Tenkan, weekly cloud Kijun and 50wma below. The Murrey Math and Fib targets with last year’s Lire all-time lows in a hyper inflating collapse. Turkey’s central bank is likely to hold its policy rate at 14% next week despite an expected further rise in inflation after it hit 70% last month, a Reuters poll showed.

Bitcoin

Bitcoin performing technically to perfection. Impulse begets impulse. To understand panic, understand greed. $BTC tesed the top of a rising channel after the preceding sharp downturn which was the downside breakout of an earlier bearish flag, after breaking downside a H&S top and then down it went….

Bitcoin began the week at $34,000, traded down to $25,488 in early-Thursday panic selling. Rallied Friday to cut the loss for the week to $6,300, or 17.4%, boosting y-t-d losses to 36%.

The Fail of TerraUSD

May 12 – Wall Street Journal (Alexander Osipovich and Caitlin Ostroff): “The cryptocurrency TerraUSD had one job: Maintain its value at $1 per coin. Since it launched in 2020, it had mostly done that, rarely straying more than a fraction of a penny from its intended price. That made it an island of stability, a place where traders and investors could stash their funds in between forays into the otherwise frenzied crypto market. This week TerraUSD became part of the frenzy too, slumping by more than a third on Monday and then tumbling as low as 23 cents on Wednesday. The collapse saddled investors with billions of dollars in losses. It ricocheted back into other cryptocurrencies…”

May 16 – Financial Times (Scott Chipolina): “Traders have yanked $7bn from Tether since the world’s biggest stablecoin last week briefly lost its peg against the US dollar, intensifying concerns about the assets that underpin the global cryptocurrency market. Tether’s market value has fallen by 9% since May 12 to $76bn as tokens have been removed from circulation to meet redemption requests, CryptoCompare data show. The decline came after Tether last Thursday traded at about 95 cents, well below the $1 level it seeks to maintain following the failure of a smaller rival. Observers inside and outside the crypto market have warned that deeper or more lasting volatility in stablecoins, which are designed to maintain a one-to-one peg with the dollar, could drag down the value of thousands of speculative crypto assets that have drawn buyers around the world.”

Recall Bitcoin exploded higher following it’s correction impulsively upon completing 5 waves up at +2/8. Each Tenkan and Kijun tap saw an explosive kiss of death until we completed 3 waves to around 28,000. From there we have seen extreme volatility.

Looking back Bitcoin put in a high of $63,000 around Coinbase, the largest US crypto exchange successfully went public which signaled profit-taking. The recent high over $68,000 came after the launch over the Bitcoin ETF, Bitco. From that high we have 2 main alternatives a V of a 1 of a V. For bears it a completive five with impulse right to the 50wma – an incredible 26% fall in a Friday night session. That’s impulse! We watch for an ABC to develop here support is the 50wma and bottom of the weekend cloud.

We have seen what you would expect from a 5 wave impulse peak and ABC correction, a violent correction and completion. Use Murrey Math levels for corrections and targets as algorithms control the herd here, support is the cloud and sharp ABC, 1-2 moves. From there prices agitated towards those ATHs as news of a Bitcoin ETF fueled the rally, sound familiar? But this time it wasn’t signaling we are in a 3 high probability but a 5.

On the Risk Radar

Fed Warnings on Possible Medium To Long Term Risks

 Geopolitical Tinderbox Radar

Economic and Geopolitical Watch

Banks

Major banks kicking off earnings this quarter, including BlackRock (BLK), Citigroup (C), First Republic Bank (FRC), JPMorgan Chase (JPM) and Wells Fargo (WFC).

Major US Banks Deliver Mixed Results in Q1, 2021

The major money cents banks released earnings with many record results for Q3. Mainly from trading and loss reserve releases from the pandemic kitty.  Rising interest rates also help the bottom line.

• Morgan Stanley Advisory Revenue Nearly Doubled Offsetting Weakness in Underwriting
• PNC Bank Revenue Grew 11% Boosted by the BBVA USA Acquisition.
• Wells Fargo Revenue Falls in Consumer, Corporate and Investment Banking
• Citigroup Earnings Affected by Higher Credit and Russian Exit Costs
• Goldman Sachs Beats Earnings Expectations on Strong Currencies and Commodities Trading Results
• JPMorgan Sets Aside $900 million To Prepare for Economic Turmoil
• BlackRock Profits Rise 20% Despite Lower AUM With Lower Investor Confidence in Markets

Banks stocks have benefited from the Federal Reserve partially lifting its hold on share buybacks, saying that banks can resume repurchases in the first quarter of 2021 as long they don’t exceed the average quarterly profits from their past four quarters. The change came after the Fed found that all major banks passed a second round of stress tests, indicating the firms can continue lending to businesses and households even if the economy dipped into a new recession.

Potentially the top six banks can buy back $11 billion in the first-quarter. Goldman Sachs shares after the announcement led the rally with a 7.7% increase. Morgan Stanley and JPMorgan jumped 6.4% and 4.9% at intraday highs. Within minutes of the announcement all three banks have announced plans to resume buybacks in the new year.

Banks are also benefiting from the Federal Deposit Insurance Commission intending to ease the Volcker Rule, which restricts banks from making large investments into venture capital. The Volcker Rule was enacted in the wake of the 2008 financial crisis, and the new changes could potentially free up billions in bank capital. Bank stocks rose. otal Non-Financial Debt (NFD) expanded $737 billion during Q3 2020 to a record $60.113 trillion.

Through the first three quarters of 2020, NFD surged an unprecedented $5.740 trillion, or 14.1% annualized. NFD was up $6.181 trillion over the past year (11.5%) and $8.817 trillion (16.7%) over two years. For perspective, NFD expanded on average $1.830 trillion annually over the past decade. NFD has ballooned 71% since the end of 2008.  

“Negative yields on long-dated government securities are more reflective of distorted market conditions than of stronger sovereign credit profiles, Fitch Ratings says. Lower interest service costs support sovereign creditworthiness, but this must be weighed against the impact of the economic conditions leading to lower yields and historically high government debt levels in a number of countries.- Fitch”

The Week Ahead – Have a Trading Plan

Watch Central Banker and Geopolitics speeches, reports and rate moves. 

For the week ahead we get earnings from the Nvidia and Zoom. The week starts with elections in Australia over the weekend with the ALP expected to win and the independents holding a new balance from the traditional parties. We’ll also get rate decisions from New Zealand and Turkey, as well as minutes from the last Fed meeting. The Fed’s Raphael Bostic will speak about the economic outlook on Monday and Esther George will give a speech on Wednesday. Both supports raising rates by 50-basis points.

President Biden’s is on a five-day Asia trip that will include a press conference with South Korean President Yoon Suk Yeol, a meeting with Japanese Prime Minister Fumio Kishida, and the Quad summit in Japan.

US Events Focus

US Data

• Monday: Nothing of note
• Tuesday: Preliminary May IHS Markit Manufacturing PMI (prior 59.2) and preliminary May IHS Services PMI (prior 55.6) at 9:45 ET; April New Home Sales (prior 763,000) at 10:00 ET; and $47 bln 2-yr Treasury note auction results at 13:00 ET
• Wednesday: Weekly MBA Mortgage Index (prior -11.0%) at 7:00 ET; April Durable Orders (prior 0.8%) and Durable Orders ex-transportation (prior 1.1%) at 8:30 ET; weekly crude oil inventories (prior -3.39 mln) at 10:30 ET; $48 bln 5-yr Treasury note auction results at 13:00 ET; and May FOMC Minutes at 14:00 ET
• Thursday: Q1 GDP — second estimate (prior -1.4%), Q1 GDP Deflator — second estimate (prior 8.0%), weekly Initial Claims (prior 218,000), Continuing Claims (prior 1.317 mln) at 8:30 ET; April Pending Home Sales (prior -1.2%) at 10:00 ET; weekly natural gas inventories (prior +89 bcf) at 10:30 ET; and $42 bln 7-yr Treasury note auction result at 13:00 ET
• Friday: April Personal Income (prior 0.5%), Personal Spending (prior 1.1%), PCE Prices (prior 0.9%), Core PCE Prices (prior 0.3%), April advance goods trade deficit (prior -$125.30 bln), April advance Retail Inventories (prior 2.0%), and April advance Wholesale Inventories (prior 2.3%) at 8:30 ET; and final May University of Michigan Consumer Sentiment survey (prior 59.1) at 10:00 ET

Federal Reserve

FOMC meeting minutes:

Wednesday, May 25 (for meeting of May 3-4) 1400 EDT/1800 GMT

FEDERAL RESERVE CHAIR JEROME POWELL

Tuesday, May 24

WASHINGTON – (VIA PRE-RECORDED VIDEO) Federal Reserve Chair Jerome Powell gives welcome remarks before the National Center for American Indian Enterprise Development (NCAIED) 2022 Reservation Economic Summit, 1220 EDT/1620 GMT. Text available. No Q&A. Contact: Emerald Skye Byrd, NCAIED, e.skye@ncaied.org

OTHER FED OFFICIALS

Monday, May 23

ATLANTA – Federal Reserve Bank of Atlanta President Raphael Bostic participates in conversation on the economic outlook before an Atlanta Rotary event, 1200 EDT/1600 GMT. No livestream. Audience and media Q&As expected. No embargoed text. Loudermilk Conference Center, 40 Courtland Street. RSVP to attend: media Karen Mracek, karen.mracek@atl.frb.org

KANSAS CITY, Mo. – Federal Reserve Bank of Kansas City President Esther George speaks before virtual “Help Wanted in Agriculture” Federal Reserve Bank of Kansas City Agricultural Symposium, 1830 CDT/1930 EDT/2330 GMT. Text TBD. No separate media Q&A. Virtual (audio only) available for media. Contacts: Bill Medley, 816 881 2556 or bill.medley https://www.kansascityfed.org/agriculture/agricultural-symposium/2022-agricultural-symposium-help-wanted-in-agriculture/

Wednesday, May 25

WASHINGTON – Federal Reserve Vice Chair Lael Brainard gives commencement remarks before the Johns Hopkins University School of Advance International Studies 2022 Commencement Ceremony, 1215 EDT/1615 GMT. Text available. No Q&A. Webcast at https://www.youtube.com/watch?v=d4z2VRB4GZU. DAR Constitution Hall, 1776 18th Street N.W. Contact: Danielle Khan, dkhan@jhu.edu or 202 963 8865

Wednesday, June 1

NEW YORK – Federal Reserve Bank of New York President John Williams gives opening remarks before the Monetary Policy Implementation and Digital Innovation workshop organized by the Federal Reserve Bank of New York and Columbia University School of International and Public Affairs, 1130 EDT/1530 GMT. Text available. No Q&A. No livestream. Event subject to Chatham House Rule. International Affairs Building, 420 West 118th Street, 15th floor. RSVP: Brian Manning, brian.manning https://www.newyorkfed.org/newsevents/events/markets/2022/0601-2022

CORDOVA, Tenn. – Federal Reserve Bank of St. Louis President James Bullard gives presentation on the U.S. economy and monetary policy before hybrid Economic Club of Memphis event, 1200 CDT/1300 EDT/1700 GMT. Virtual and in-person event. Slides and press release anticipated. Audience Q&A expected. Media Q&A in person and via conference call. FedEx Event Center, 415 Great View Drive East, Suite 103. RSVP: Maria Hasenstab, 314 306 9360 or maria.e.hasenstab@stls.frb.org

Thursday, June 2

NEW YORK – Federal Reserve Bank of New York Executive Vice President Lorie Logan gives closing remarks before the Monetary Policy Implementation and Digital Innovation workshop organized by the Federal Reserve Bank of New York and Columbia University School of International and Public Affairs, 1200 EDT/1600 GMT. Text available. No Q&A. No livestream. Event subject to Chatham House Rule. International Affairs Building, 420 West 118th Street, 15th floor. RSVP: Brian Manning, brian.manning https://www.newyorkfed.org/newsevents/events/markets/2022/0601-2022

CLEVELAND – Federal Reserve Bank of Cleveland President Loretta Mester speaks on the economic outlook via videoconference before the Philadelphia Council for Business Economics Meeting, 1300 EDT/1700 GMT. Audience Q&A expected. Text available. No media Q&A. RSVP for video link: pcbe Andrew Zajac, 216 579 3196 or andrew.zajac http://www.pcbe.org/pcbe.nsf/DocView?Open&UNID=3fb59677d5b8f4c5852587ce0075a0fe

Global Events

Saturday, May 21

• Australia’s national election
• President Biden holds a press conference with South Korean President Yoon Suk Yeol in Seoul

Sunday, May 22

• World Economic Forum begins in Davos, Switzerland

Monday, May 23

• Chicago Fed National Activity Index
• Germany IFO business climate
• President Biden meets Japan PM Kishida in Tokyo
• Singapore CPI
• Fed’s Bostic discusses the economic outlook at an event hosted by the Rotary Club of Atlanta
• Fed’s George speaks at an agricultural symposium
• ECB’s Holzmann and Nagel, BOE Gov Bailey discuss inflation at an Austrian National Bank conference in Vienna
• World Gas Conference in Daegu, Korea begins

Tuesday, May 24

• President Biden attends Quad summit with Japan, Australia and India in Tokyo
• DC Blockchain Summit in Washington, DC
• NOAA releases its initial outlook for the 2022 Atlantic hurricane season
• Sweden’s Riksbank publishes its Financial Stability Report 2022
• Eurozone S&P Global PMIs
• France S&P Global PMIs
• Germany S&P Global PMIs
• Indonesia rate decision
• Mexico international reserves
• Nigeria GDP, rate decision
• UK S&P Global PMIs
• US new home sales, S&P Global PMIs

Wednesday, May 25

• Economic Data/Events
• FOMC Minutes
• US Durable goods
• RBNZ Rate Decision: Expected to raise Official Cash Rate by 50 bps to 2.00%
• RBNZ Governor Adrian Orr speaks following the rate decision
• The Treasury’s Office of Foreign Assets Control will let a sanctions exemption that’s allowed US investors to receive payments on Russian debt lapse
• ECB’s Holzmann speaks at the Central & Eastern European Forum in Vienna
• Bank of Finland Governor Rehn speaks at the bank’s annual payments forum
• ECB publishes its Financial Stability Review
• Germany GDP
• Mexico trade, GDP
• Singapore GDP
• EIA Crude Oil Inventory Report

Thursday, May 26

• US GDP, initial jobless claims
• US House Financial Services Committee has a hearing on “Digital Assets and the Future of Finance: Examining the Benefits and Risks of a US Central Bank Digital Currency”
• New Zealand PM Ardern speaks at Harvard University’s 371st Commencement ceremony
• Mexico central bank monetary policy minutes
• Canada retail sales
• Singapore industrial production
• Turkey rate decision: Expected to keep One-Week Repo Rate unchanged at 14.00%
• Hungary one-week deposit rate

Friday, May 27

• US core PCE price index; personal income and spending; wholesale inventories; University of Michigan consumer sentiment
• NATO Parliamentary Assembly spring session begins
• President Biden addresses US Naval Academy Class of 2022
• Australia retail sales
• China industrial profits
• Japan Tokyo CPI
• Sovereign Rating Updates:
• – Italy (Fitch)
• – Sweden (Fitch)
• – Switzerland (Moody’s)
• – Turkey (Moody’s)
• – Poland (DBRS)

Focus on yourself and what YOU CAN INFLUENCE, set your trading plan and goals in be set for 2022.

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