Weekly plan - 11.03 - 15.03.2024

Macro

Next week sees the release of U.S. consumer and manufacturing inflation, retail sales, the state of the manufacturing sector in New York State, and consumer sentiment. There will be an auction of 10 and 30-year bonds.

It is advised to pay attention to events that cause uncertainty in price movement:

Tuesday - Core CPI m/m.

Thursday - Core PPI m/m.

Friday - Empire State Manufacturing Index.

Tuesday

USD (US Dollar) / Core CPI m/m - 2:30 p.m.

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

Change in the 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 (0.4%) was higher than the forecast (0.3%).

The current market forecast is 0.3%.

You can read more here.

USD (US Dollar) / CPI m/m - 14:30

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 higher than the forecast (0.2%).

The current market forecast is 0.4%.

You can read more here.

USD (US Dollar) / CPI y/y - 14:30

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. The index is 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 (3.1%) was higher than forecasted (2.9%).

The current market forecast is 3.1%.

You can read more here.

USD (US Dollar) / 10-Y Bond Auction - 19:01 PM

10-Year Treasury Bond Auction.

TheU.S. Department of the Treasury (Treasury) holds an auction once a month to sell issued 10-year bonds to raise capital for the country's budget.

Understanding current bond yields is very helpful in understanding the state of the financial system. Whether investors are willing to take risks or not.

The data are reported in the format - 4.09|2.6.

4.09 - highest yield on realized bonds.

2.6 - number of bids for one bond (allows to measure liquidity of the current market).

Yield is formed due to supply and demand (prices) for bonds, as well as current conditions in the economy. Depending on investors' sentiments, the rate can be both higher (risk premium) and lower (everything is more or less calm).

When financial market conditions are unfavorable, capital is concentrated in safe government bonds, which is strongly reflected in the yields of medium (1-3 years) and long maturity (4-30 years) bonds.

In a normal environment, medium and long bonds are not as interesting as short bonds or equities. Investors put capital into higher yielding assets. Yields on medium and long bonds remain high because prices are low.

When trouble starts, investors want at least modest but reliable returns. They start buying up cheap medium and long bonds to get additional returns. Prices rise, yields fall and become lower than short bonds.

This is not a normal situation. Short bonds should always be lower yielding because the risks are minimized due to the short maturity. All this is well reflected in the bond yield curve. For this reason, the yields of medium and long bonds are a good indicator of the exit from crisis time - the yields of medium and long bonds will start to increase relative to short bonds.

The auction is where the market picks up bond yields. Therefore, it is an important parameter to track and understand where the economy and finance will move.

The latest actual figure (4.09|2.6) was higher than the forecast (4.02|2.6).

The current market forecast is 4.09|2.6.

More details can be found here.

Wednesday

USD (US Dollar) / 30-Y Bond Auction - 7:01 p.m.

Auction of 30-year Treasury Bonds.

TheU.S. Department of the Treasury (Treasury) holds an auction once a month to sell outstanding 30-year bonds to raise capital for the country's budget.

Understanding current bond yields is very helpful in understanding the state of the financial system. Whether investors are willing to take risks or not.

The data is reported in the format - 4.09|2.6.

4.09 is the highest yield on realized bonds.

2,6 - number of bids per bond (allows to measure the liquidity of the current market).

The last actual indicator (4.36|2.4) was higher than forecasted (4.23|2.4).

The current market forecast is 4.36|2.4.

More details can be found here.

Thursday

USD (US Dollar) / Core PPI m/m - 14:30

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 - it affects the cost of the final product.

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

• Either reduce his margin. 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 (0.1%).

The current market forecast is 0.2%.

You can read more here.

USD (US Dollar) / Core Retail Sales m/m - 14:30

Change in Core Retail Sales for the month.

TheU.S. Census Bureau releases monthly data on the change in Core Retail Sales for the month.

To calculate the Core, the data excluding auto sales is taken. Statistically, automobile sales account for about 20% of retail sales. Car prices are constantly changing due to strong demand and therefore create a lot of volatility.

As described in past reviews, economists try to fit any situation to a model. Volatility can create problems for these models, so they remove the volatile component from the calculation.

The retail sales baseline is very important because it is the first in the chain to determine consumer demand.

The more people buy goods, the less they become available in store warehouses. In order to supply the demand, stores start to order more and more goods from enterprises. Enterprises begin to actively purchase raw materials to produce these goods.

If people buy less goods, the stocks in the stores' warehouses remain and there is no point in making a new order to the enterprise. The chain that creates a positive impact on the economy does not work.

With the help of the retail sales indicator a large number of statistics are calculated, on the basis of which further decisions on the work of enterprises and government agencies are made.

At the moment, the main task of the Fed is to reduce inflation as carefully as possible. That's why the declining retail sales figure is a short-term positive, saying that the impact is working and they will reach the 2% inflation target in the long run.

The last release of the actual figure (-0.6%) was below the forecast (0.2%).

The current market forecast is 0.5%.

More details can be found here.

USD (US Dollar) / PPI m/m - 14:30

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 indicator (0.3%) was higher than the forecast (0.1%).

The current market forecast is 0.3%

You can read more here.

USD (US Dollar) / Retail Sales m/m - 14:30

Retail Sales Change for the month.

TheU.S. Census Bureau releases monthly data on the monthly change in Retail Sales.

To calculate the index, the data is taken into account the sales of automobiles. Statistically, automobile sales account for about 20% of retail sales. Car prices are constantly changing due to strong demand and therefore create a lot of volatility.

As described in past reviews, cars are a very important part of American life because the infrastructure is very spread out geographically and the transportation system is not as developed as in Europe.

Underreporting real statistics is not a good thing, but when compared to inflation and core inflation (CPI and Core CPI / PCE and Core PCE), car sales are not as important as rising food and energy prices.

You can not change a car for a long time and still own it. However, the car market in the US runs on credit. Mostly people do not fully own cars, but take it on lease or loan. After a certain period of use, they do not pay off the full loan for the current car change it and reallocate the loan to a new car. For this reason, the global aftermarket is filled with cars from the USA.

The impact on car sales is a decrease in the activity of dealers, manufacturers and banking institutions issuing car loans. The auto industry generates 3% of US GDP and creates actual and indirect jobs for 10 million people.

The latest release of the actual figure (-0.8%) was below the forecast (-0.2%).

The current market forecast is 0.8%.

More details can be found here.

USD (US Dollar) / Unemployment Claims - 14:30

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 rate release (217K) was equal to the forecast (217K). The labor market remains stable. For this reason, there is no particular increase in unemployment.

The current market forecast is 218 thousand.

You can read more here.

Friday

USD (US Dollar) / Empire State Manufacturing Index - 2:30 pm

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

New York State Manufacturing Index.

TheFederal Reserve Bank of New York releases the New York State Manufacturing Index on a monthly basis. The index is based on a survey of manufacturing companies on business conditions, employment, shipments and new orders.

New York State is the fourth largest state in terms of population (20 million) and the third largest in terms of contribution to the nation's GDP ($2.05 trillion). No matter what anyone says about the US being the world's largest consumer (trade deficit of $948.1 billion), manufacturing is still very strong. There are a large number of localized brands covering almost all the needs of the citizens.

It is for this reason that manufacturing data is very important and can say a lot about the future dynamics of the economy as a whole. Since the basic element in the production of goods is enterprises, they are the best and fastest to react to changes in economic conditions. For the entire 23rd year, the indicator has more often than not been in strong negative territory, with few positive changes.

The latest release of the actual indicator (-2.4) was better than the forecast (-13.7).

The current market forecast is -7.6.

You can read more here.

USD (US Dollar) / Prelim UoM Consumer Sentiment - 16:00

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.

The indicator has been on a downward trend since August. The actual indicator (79.6) was slightly below the forecast (80).

The current market forecast is 77.3.

You can read more here.

Crypto

BTC/USDT

Monthly

https://www.tradingview.com/x/JQ42TXAb/

The high has been updated, now we can exhale and enjoy this P.A. All I expect now is a week or two to show strength in altcoins and rest a bit towards 52000 on a sharp impulse.

Weekly

https://www.tradingview.com/x/zyvVpaa0/

We have 2 zones where we expect bitcoin to be after the spill - that's where the asset accumulation will start, which will be ready for a bull market, but right now just quietly observing.

Daily

https://www.tradingview.com/x/PeZG7pzM/

I'm not making any specific plan on how the price will correct, I just set up allerts and expect this scenario at 52,000.

4Н

https://www.tradingview.com/x/4MQEkSqP/

Here is a rough schematic of how I would like to see price reach the marks below.

Dominance

https://www.tradingview.com/x/8V3GFHsy/

Soon the markets will be filled with the fear that no one has caught the departing train, because once bitcoin dominance gives a test of 57% - you certainly won't have any thoughts of buying anything on the spot, while conscious capital will be buying it all up.

ETH/USDT

Monthly

https://www.tradingview.com/x/FG3LlOCR/

On ether, I would expect 3000 soon and then a refresh of the high - that's the whole plan I'm making on it.

Weekly

https://www.tradingview.com/x/bsxWlC7t/

Similarly, benchmark 3000, however it could be that we do give a highs update, without a pullback, but that would be a lot of fun.

Daily

https://www.tradingview.com/x/bDW419Ay/

4H

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

One of the event options under the first half of the week.

ETH/BTC

Weekly

https://www.tradingview.com/x/B5IIuWrp/

Nothing has changed.

FX

DXY

Weekly

https://www.tradingview.com/x/KW7lc5gU/

Daily

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

We expect to reach 102.00. Based on the news events of the current week, we assume two variants of development:

1. BPR test, with the high of the week on Mon-Wed, and downward OF for the rest of the week.
2. FVG SIBI test, with a week high on Wed-Wed and a downward OF for the rest of the week.

US10Y

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

US30Y

https://www.tradingview.com/x/RQ7RDaM3/

Special attention to 10 and 30 year bonds, auction will take place on Wed-Sat - may add volatility to DXY. Yields are expected to decline, which is an additional factor of DXY decline.

EURUSD

Daily

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

ECB rate was not changed, which means, as it was expected last week, we will see a temporary strengthening of EUR, amid expectations of USD rate on March 20. Last week's target of 1.0900 has been reached, we continue to see upward movement towards 1.1000.

H4

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

Price is in news consolidation, we expect deviation downwards, where we will consider longs.

GBPUSD

Daily

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

GBP is likely to continue to move up towards 1.3000, however on Tuesday unemployment benefits data will be released which is forecast to be negative for GBP growth, be careful, work through the correction to FVG BISI.

SP500/NQ100/DJ30

Daily SP500

https://www.tradingview.com/x/x9zDFeNK/

Daily NQ100

https://www.tradingview.com/x/nf3pcFyr/

Daily DJ30

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

Stock indices are moving into a consolidation phase. We see a strong discordance between the Dow Industrial Average (US30) and the SP500/NQ100. Until March 20, we expect to trade in consolidation with deviations on both sides. The current week is expected to be shorted with the Empire State Manufacturing Index expected to be negative.