From the desk of Joe Rios

Last week we noticed the correlation between the bond market and the US dollar to be outside of its historical norm. The US dollar usually trades in same direction as the bond yield, not bond price. None the less, bonds traded down with the US dollar for most of the week. However, after the US employment data release, the US Dollar reversed as unwinding of recent positions became evident.

This decoupling between these markets should provide an interesting week ahead in the financial markets. Will commodities continue to take its cue from the US dollar? Will gold trade with the bond or currency market? Will the commodity currencies lead the way? In the week ahead I will continue to focus on the intermarket relationships and the direction of the US dollar.

The commodity markets provided trading opportunities with grains outperforming led by wheat gaining 8.44% and corn 2.63%. The velocity leaders to the downside was silver -3.63%, crude oil -2.35% and natural gas -1.87%. I will also pay close attention to the technicals of the market including recurring patterns and key breakpoints. There is also plenty of potential market moving data releases from China, New Zealand and Australia.

  – Joe Rios

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Sunday

day one                                ALL         G7 meetings

Monday

Tentative             CNY        Trade Balance

Day Two                               ALL         G7 Meetings

8:30 AM               CAD       Building Permits

9:30 PM                AUD       NAB Business Confidence

9:30 PM                CNY        CPI

Tuesday

10:00 AM             USD       JOLTS Job Openings

10:50 PM             AUD       RBA        Gov. Stevens Speaks

Wednesday

4:30 AM               GBP       Manufacturing Production

10:30 AM             CL           Crude Oil Inventories

4:00 PM                GBP       Gov. Carney Speaks

5:00 PM                NZD       RBNZ Rate Statement

9:30 PM                AUD       Unemployment Rate

Thursday

1:30 AM               CNY        Industrial Production

8:30 AM               USD       Retail Sales And Unemployment Claims

Friday

8:30 AM               USD       PPI

10:00 AM             USD       Preliminary UoM Consumer Sentiment