The Week Ahead
Posted: 2017-04-30 23:29:00It should be a relatively slow start to the week with many European markets closed in observance of Labor / May Day.
Assuming bombs don't start falling on North Korea anyway...
French Elections at weeks end are likely to get lots of attention, even though a Macron win is all but assured.
Its a data heavy week beginning with ISM Manufacturing PMI & Chinese Caixin Manufacturing PMI tomorrow
Tuesday delivers a rate decision by the Australian central bank which will be closely watched by FX carry traders.
On Wednesday we get ADP Non-farm employment change which will setup expectations for Fridays all important Non-Farm Payrolls report, along with US ISM Non-Manufacturing, Crude inventories, and an interest rate decision by the FOMC.
Having raised rates 25bp at the prior meeting, nobody is expecting a policy change on Wednesday. However, the statement will be scrutinized for clues on the Fed's thinking after weak Q1 data.
Fed Fund Futures are still pricing 2 more hikes this year.
Trade Idea: North Korea has pushed the envelope on what can be considered prudent posturing. Trump is no doubt itching to exert some of his new military muscle and Mr Kim Jong Un is not his father. The use of military force is a very real possibility in the days ahead following the latest missile test by Pyongyang. Should an attack of some sort occur, the JPY will see extreme demand. In this Predators opinion it's worth buying optionality on that outcome at these prices.