Issue 22 – The week of July 11th, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Monday

• USA Monthly Budget Statement. The Monthly Budget Statement released by the Financial Management Service summarizes the financial activities of federal entities, disbursing officers, and Federal Reserve banks. A positive budget statement that receipts exceed budgetary outlays is seen as bullish for the USD. On the other hand, a negative figure (deficit) indicates government debt is seen as bearish.

Tuesday

• USA Redbook Index. The Johnson Redbook Index is a sales-weighted of year-over-year same-store sales growth in a sample of large US general merchandise retailers representing about 9.000 stores. By Dollar value, the index represents over 80% of the equivalent “official” retail sales series collected and published by the US Department of Commerce.
• USA API Weekly Crude Oil Stocks. API’s Weekly Statistical Bulletin has reported total U.S. and regional data relating to refinery operations and the production of the four major petroleum products: motor gasoline, kerosene jet fuel, distillate and residual fuel oil. These products represent more than 85% of the total petroleum industry

Wednesday

• USA Consumer Price Index. The Consumer Price Index released by the US Bureau of Labor Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of the USD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or Bearish
• CAD Bank of Canada Monetary Policy Report. The Bank of Canada publishes a study of economic movements in Canada. It indicates a sign of a new fiscal policy. Any changes in this report tend to affect the CAD volatility. If the BoC report shows a hawkish outlook, that is seen as positive (or bullish) for the CAD, while a dovish outlook is seen as negative (or bearish).
• CAD Bank of Canada Interest Rate Decision. BoC Interest Rate Decision is announced by the Bank of Canada. If the BoC is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the CAD. Likewise, if the BoC has a dovish view on the Canadian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish
• USA Fed Beige Book. The Beige Book reports on the current US economic situation. Interviews with key business contacts, economists, market experts, and other sources are gathered by each of the 12 Federal Reserve Districts. The survey gives a picture of the overall US economic growth. An optimistic view of those authorities is considered positive, or bullish for the USD, whereas a pessimistic view is considered negative, or bearish for the Dollar.

Thursday

• USA Producer Price Index. The Producer Price Index released by the Bureau of Labor Statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. Generally speaking, a high reading is seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish
• CAD Manufacturing Sales. The Manufacturing Sales released by Statistics Canada examine the overall Sales of Canada. It can be seen in expected market demand. Generally speaking, a growing number of goods including unsold inventories indicates a fall in the market demand, which anticipates bearish for the CAD. Also, a decreasing sales number is seen as negative (or bearish). On the other hand, an increasing sales number is seen as positive (or bullish).
• USA Retail Sales. The retail Sales released by the US Census Bureau measure the total receipts of retail stores. Monthly percent changes reflect the rate of changes in such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or bearish).
• USA CFTC Net Gold Positions. The weekly Commitments of Traders (COT) report provides information on the size and the direction of the positions taken, across all maturities, with participants primarily based in Chicago and New York futures markets. Forex trades focus on “non-commercial” or speculative positions, to determine whether a trend remains healthy or not, and also market sentiment towards a certain asset.

Geopolitics

Political strife around the world is in full bloom as evidenced by the fall of Boris Johnson as UK prime minister, the prime minister of Sri Lanka having to flee the country as the economy grinds to a halt. Most shocking was the assassination of former Japanese prime minister Shinzo Abe.

The world continues to struggle with supply chain disruptions and shortages of food and energy goods. Inflation remains high central bank interest rate hikes will take their time to start reducing inflation. The war in Ukraine continues without an end in sight and most of the recent intense fighting is in the eastern Donbas region.

The Call

Precious metals continue to be under pressure and look to extend moves downward again this week. The most significant report this week will be the Bank of Canada interest rate decision which will have a detrimental impact on precious metals prices.

Last Week in Review

• Previous metals suffered a significant sell-off last week
• Canada reports 43,000 jobs lost in June

	Gold	Silver
Open	1812	19.83
High	1814	20.19
Low	1732	18.91
Close	1741	19.32