Weekly plan - 10.06 - 14.06.2024

Macro

Next week sees the release of consumer and manufacturing inflation data, as well as consumer sentiment. FOMC meeting will be held.

We advise to pay attention to events that cause uncertainty in price movement:

Wednesday - Core CPI m/m, Federal Funds Rate, FOMC Economic Projections, FOMC Statement, FOMC Press Conference.

Thursday - Core PPI m/m.

Wednesday

USD (U.S. Dollar) / Core CPI m/m - 15:30.

Important data with a serious impact on the volatility of price movement!

Change in Core CPI for the month.

TheUS Federal Bureau of Statistics releases the Core CPI every month, about 16 days after the end of the previous month. The calculation is based on the prices of consumer goods, excluding energy and food (Core).

It is considered that energy and food prices are very volatile and take up only 1/4 of the whole index. For this reason, economists use the Core index for more accurate measurement.

Consumer prices account for most of the inflation, as people are the main buyers of goods. This is a very important macroeconomic parameter and indicator, which is the last in the chain of inflation and shows the real situation in the economy.

Inflation is dangerous because money is constantly depreciating. This causes very big economic and social problems, which, with uncontrolled growth, can even lead to civil conflicts and wars. This has already happened in history. That is why the government is watching this parameter very closely and doing everything possible to influence the price growth.

At the moment, the Fed is making every effort to curb the growth of inflation. The main tool is the increase in refinancing rates. The higher the rate, the higher the borrowing and lending. Expensive loans and borrowing - people can't buy new goods, houses, cars. Lack of large demand for goods - manufacturers make fewer orders, do not increase production capacity and thus do not increase prices at their level.

The latest actual rate (0.3%) was equal to the forecast (0.3%).

The current market forecast is 0.3%.

You can read more here.

USD (US Dollar) / CPI m/m - 15:30

Monthly change in the Consumer Price Index.

TheUS Federal Bureau of Statistics releases the Consumer Price Index every month, about 16 days after the end of the previous month. The calculation is based on the prices of consumer goods, including energy and food prices.

Since the index includes energy and food prices, it is more realistic and closer to ordinary people. The dependence of prices on energy costs has been described above.

In the USA, the infrastructure of cities is built in such a way that it is very difficult to get around without a car. The public transportation system there is not as well developed as in European cities. For this reason, the cost of fuel used to refuel their cars is very important for ordinary citizens. The same can be said about nutrition.

When all of this is taken into account, as with the example of comparing Core PPI and PPI, a very large volatility in performance is created. If you look at it from an academic point of view, it is superfluous information that doesn't play a role and it is smoothed out. If you look at it from a consumer point of view, this extra information is everything. Today you fill up a liter of gasoline for 55 hryvnias, tomorrow for 70, the day after tomorrow for 90, and in a week for 60. Not a very calm situation for an ordinary person.

The last actual figure (0.3%) was lower than the forecast (0.4%).

The current market forecast is 0.2%.

You can read more here.

USD (US Dollar) / CPI y/y - 15:30

The year-over-year change in the Consumer Price Index.

TheUS Federal Bureau of Statistics releases the Consumer Price Index every month, about 16 days after the end of the previous month. Consumer prices are calculated based on the prices of consumer goods, including energy and food prices.

The index is annualized. It is widely used in the media, as it is easier to explain for ordinary people. A large number of instruments related to social security and insurance are calculated on the basis of this index.

The last actual index (3.4%) turned out to be equal to the forecasted one (3.4%).

The current market forecast is 3.4%.

You can read more here.

USD (US Dollar) / Federal Funds Rate - 21:00

Important data that has a serious impact on the volatility of the price movement!

US Prime Refinancing Rate (Fed Funds Rate).

TheFed is voting on future actions with the refinancing rate.

The refinancing rate is the most important parameter affecting liquidity in the financial system. Depending on the size of the lending rate, credit rates for companies and consumers are affected.

Banks can raise funds from the central bank at the current lending rate. In order to make money, they charge their interest rate and make loans to companies and consumers. The higher the rate, the more interest the companies and consumers have to pay on the loan.

The refinancing rate is the most important tool to fight inflation. Without exotic influences (logistical collapse under Covid-19 and supply chain disruptions), inflation rises from increasing consumer demand. Companies start producing more and more to meet demand, while prices also rise. As companies start ordering more and more raw materials to produce, raw material prices also increase. A spiral of constantly rising prices is created.

Similar to a fire, you have to reduce the oxygen supply and the fire will start to shrink. The more expensive it becomes to get money, the less people start buying goods, the less businesses produce and the less the cost of raw materials increases.

Because of the problems with the heavy debt load, increasing the refinancing rate becomes an increasingly dangerous tool. However, the inflation situation may be improving, but the problems remain. For this reason, the rate is likely to remain at the same level.

The current market forecast is 5.5%.

You can read more here.

USD (US Dollar) / FOMC Economic Projections - 21:00

Important data with a serious impact on the price movement volatility!

FOMC Economic Projections.

The Fed publishes its macroeconomic forecasts once a quarter. This is very important information, as it gives an idea about the current assessment of the situation and future actions of the Fed.

USD (US Dollar) / FOMC Statement - 21:00

Important data that has a serious impact on the volatility of the price movement!

Fed's Monetary Policy Statement.

The FOMC Statement describes the current state of the economy, the Fed's economic and monetary policy outlook.

USD (US Dollar) / FOMC Press Conference - 21:30

Important data with a serious impact on the volatility of the price movement!

Fed Chairman Jerome Powell Press Conference.

Fed Chairman Jerome Powell will be answering questions from economists and journalists during the press conference after the announcement of the monetary policy decision.

A very important event, because in his speech the head of the central bank may mention information about future actions to change the refinancing rate.

Anexample of such a speech.

Thursday

USD (US Dollar) / Core PPI m/m - 15:30

Important data that has a major impact on the volatility of the price movement!

Change in the Core PPI for the month.

TheUS Federal Bureau of Statistics releases the Core PPI every month, about 13 days after the end of the previous month. To calculate it, prices are taken by major sectors of the economy, as well as by stages of production.

Core - a variant of the index calculation that excludes energy and food prices. It is used for "smoothing" the index and operational monitoring of price changes.

Energy is the most important sector of the modern economy. Energy is used to produce goods, to move transportation that moves produced goods, to light streets, to heat houses and much, much more.

The higher the price of energy, the higher the price of all other aspects of life. Rising/falling prices cascade down a long chain, affecting the prices of everything else.

Food is the most important component in human life. Without quality nutrition, a person cannot exist. Today, most of the food produced is done by machines. Raw materials are sown and harvested using specialized machines. It is then processed in factories by specialized machines. Energy binds this whole process together, as neither machines nor machines will work without energy - fuel and electricity obtained in various ways.

Since this is a basic element of human survival, the higher the prices of products, the faster they rise - people buy products en masse, fearing shortages and everything else.

In order to "smooth" the price growth, economists went for a trick and made an additional parameter that does not take into account energy and food prices. Even without taking these prices into account, in any case they indirectly affect everything because of their importance.

The producer price index is an important parameter that shows how prices change on the production side. Before a product hits the store shelves where people buy it, the product has to be produced. This is a whole chain of stages where raw materials are gradually processed into a product.

All these stages and transformations require different goods, equipment and so on. If prices increase at each of these stages - this affects the cost of the final product.

When a manufacturer realizes that the cost of his product is constantly increasing, he has two options for further pricing of the finished product:

• Either reduce his margins. In simpler terms, start selling the product at a loss, and therefore earn less.
• Or increase the cost of the product itself. In this case, the end buyer pays for the increase in production prices.

I think you realize that producers most often choose the second option. Therefore, the parameter of producer price growth actively influences the growth of commodity prices and consumer inflation.

The core producer price index has been in a downtrend for a year. More often than not, the actual change coincides with the predicted change.

After the COVID-19 lockdowns, which caused a large number of businesses to close and disrupted logistics, producer prices rose sharply. The main factor was that direct-to-consumer businesses were placing large numbers of orders because the goods were simply not reaching warehouses.

For example, you wanted to order 10 cars. You placed the order, 1 arrived due to logistical problems. So to solve this problem, you made multiple orders to dial those 10 cars up bit by bit. This caused a huge strain on the companies.

They had to work harder, order more raw materials and components for production to meet this demand. However, people are on lockdown, there are also difficulties with raw materials, as there are disruptions in logistics, and the enterprises supplying raw materials are also partially in lockdown and also have problems with logistics at their level. Vicious circle.

As soon as the supply problem started to be solved, prices started to come down.

The latest release of the actual rate (0.5%) was higher than the forecast (0.2%).

The current market forecast is 0.3%.

You can read more here.

USD (US Dollar) / PPI m/m - 15:30

Producer Price Index change for the month.

TheUS Federal Bureau of Statistics releases the Producer Price Index every month, about 13 days after the end of the previous month. The index takes prices by major sectors of the economy as well as by stage of production.

This type of index takes into account energy and food prices, showing a more realistic picture of the current situation.

Why producer prices are so important is described above. We would like to discuss separately why the pure index is so important, without removing prices convenient for statistics.

When working with data, they are easy to manipulate. The reason for manipulation is most often an attempt to fit reality to one's model, and to say that the people in charge are good, they are doing everything right and everything will be fine.

As it was described above, energy is the main indicator influencing everything. So trying to reduce the weight of this indicator just doesn't show the reality.

Just compare a graph of Core PPI and PPI, how beautiful Core PPI is and how volatile PPI is. That's all the manipulation in action.

The latest release of the actual index (0.5%) was higher than the forecast (0.3%).

The current market forecast is 0.3%

You can read more here.

USD (US Dollar) / Unemployment Claims - 15:30

Unemployment Claims.

TheUS Department of Labor releases weekly claims data. The indicator is based on the citizens who applied for unemployment benefits for the first time in the last week.

The indicator is very important because it shows the strength/weakness of the labor market. If people are employed, they earn wages and consume services and goods. This can influence the rise in consumer inflation.

At the moment, the Fed is actively fighting inflation. A strong labor market indicates to the central bank that the economy is holding up and the current inflation situation will continue.

The more jobless claims, the better for the Fed's actions. The fewer jobless claims, the worse for the Fed's actions - they have to raise the rate even more.

The latest release of the rate (219K) was higher than forecast (218K). The labor market remains stable. For this reason, there is no particular increase in unemployment.

The current market forecast is 220 thousand.

You can read more here.

Friday

USD (US Dollar) / Prelim UoM Consumer Sentiment - 17:00

Prelim U.S. Consumer Sentiment.

The University of Michigan releases preliminary consumer sentiment data based on a survey of citizens answering questions about the current and future state of the economy. The main version will be released 2 weeks after the release of the preliminary data.

The indicator shows how consumers feel at the current moment, as well as what they expect in the future. If they feel negative, it indicates a possible decrease in consumption in the future, which worsens the economic situation. If they feel positive, it indicates a possible increase in consumption in the future, which improves the economic situation.

As part of the fight against inflation, this indicator in conjunction with consumer income, consumption can be a good indicator for the Fed's next actions.

Since August, the indicator has been on a downward trend. The actual indicator (67.4) was below the forecast (76.3).

The current market forecast is 73.

You can read more here.

Crypto

BTC/USDT

Monthly

https://www.tradingview.com/x/ahLZBKng/

There was a capture of the highs on the futures and the spot stands unchanged. The correction may extend to the 65000 range, so we should be ready for a decline before a rise.

Weekly

https://www.tradingview.com/x/JvKgjela/

Similar bias, I am expecting a pullback to the 65-65 area in the ideal outlook. Worst case scenario, a test of 61183 awaits us.

Daily

https://www.tradingview.com/x/KTxCPfmU/

The charts of all periods are identical, so I expect a correction of this format.

4Н

https://www.tradingview.com/x/CrETLPNX/

The format of the last review is also relevant, but judging by the altcoins, they need some more time to be ready to fly, judging by the projection of BTC, I do not deny that the growth can continue if the week closes positively, as it is now, but the zones for buyback should be at the ready.

ETH/USDT

Monthly

https://www.tradingview.com/x/jhqdGxTZ/

Ether is holding so far briskly, the first target of 3581.60 has been reached, we make a reversal from the current level or on the contrary we correct a couple of percent lower before the growth.

Weekly

https://www.tradingview.com/x/bMHQA5dI/

Let's close the week above 3677 and go to 4300 as a minimum or give another run down to 3581.
 

ETH/BTC

Weekly

https://www.tradingview.com/x/NhGJs4Y5/

We are waiting for a burst of strength for etherium.

FX & Stock market

DXY

Daily

https://www.tradingview.com/x/64A1KmdU/

There are no changes from last week, the value is inside the BPR zone, SMT with EURUSD and GBPUSD is still in place, in addition we took out last week's low and got an impulsive move up on the unemployment data. No context for the current week as we need to wait for inflation and interest rate data, with the FOMC meeting on Wednesday. The problematic zone at the moment is the -OB zone, which it is desirable to break through on the background of the news release. The upward targets are unchanged.

EURUSD

Daily

https://www.tradingview.com/x/FBfvoVrR/

EURUSD looks downward with a target of 1.0720, 1.0600 (Internal SSL) taking into account the ECB rate cut on Thursday. We assume a small correction with a potential formation of the high of the week on Tuesday, Wednesday. Monday is likely to be weakly volatile and will form compression under FOMC. Be more careful, we advise to refrain from trading before the data release.

GBPUSD

Daily

https://www.tradingview.com/x/psBrnr1U/

GBPUSD returned to test the upper boundary of the global range - 1.2800, and again failed to break through this level, where on Friday we got a strong impulsive downward movement on the background of the data on the labor market in the USA. We expect downward movement to 1.2635, with the potential to move to the lower boundary - 1.2500.

SP500

Daily

https://www.tradingview.com/x/1GzFSfWi/

Last week's plan worked out perfectly and the SP500 index took out the Outer BSL. However, from a fundamental data point of view, a lower ISM Manufacturing PMI as well as a higher unemployment rate could have a strong downward impact on the stock markets. For this reason, it is necessary to build context after the FOMC release on Wednesday. At the moment the index is inside the FVG BISI zone, it is necessary to observe how the price will work with it. In case of an inversion - it is optimal to consider a downward movement to the 5150 range. In case the FVG BISI zone holds and the price fixes above the External BSL - the upward OF will continue.

NQ100

Daily

https://www.tradingview.com/x/8Ax7QdrZ/

The situation is identical on the Nasdaq 100 chart. After removal of External BSL, we should consider the reaction to FVG BISI. In this case, due to the wide range of this FVG BISI, we can consider its inversion after fixing below the 0.5 level, which will lead to a move to the 18500 range. If no consolidation below 0.5 is seen - the upward OF continues.