US markets are closed tomorrow in observance of the Juneteenth holiday and in today’s forecast trading piece I’ll focus on trades that I believe have strong risk-reward profiles and expire this Friday.
0.2% Has Been the Ceiling since June 2022
First up is Canada’s New Housing Price Index, which has been weakening recently as elevated financing rates and subdued affordability dynamics weigh on valuations. Friday’s publication for May is expected to show a 0.2% month-over-month contraction. An upside beat could be in the cards, though folks, considering that there’s space for recovery after April’s steep 0.4% decline. But an important detail is that the monthly gain hasn’t surpassed 0.2% since May 2022, when the real estate market was cooling off from the 2020 and 2021 buoyancy driven by the COVID-19 pandemic, which coincided with basement borrowing costs. In light of the theoretical ceiling at 0.2%, which is projected to extend on Friday, I’m on “Team No” at the 0.2%, 0.3%, 0.4% and 0.5% thresholds. Those levels are currently available at $0.76, $0.84, $0.90 and $0.92.
Yes/No Combo For Hong Kong
Hong Kong’s Consumer Price Index is expected to increase an unchanged 2% year over year for May. Meanwhile, the series is volatile and it’s notoriously hard to pinpoint where the figure will land, unlike some of its counterparts from larger jurisdictions. But since December 2023, the Yes/No combo at the 1% and 2.5% thresholds would have worked every time. I think there’s a strong chance it will work again, as I don’t envision a fall to 1% or a climb to 2.6%. Indeed, my projection for this Friday’s figure is 1.8%. The “Yes” answer at the 1% threshold is currently priced at $0.94 while the “No” at 2.5% is available at $0.90. Additionally, I also find the risk-reward profiles of the “Nos” at the 3% and 3.5% levels attractive, which are going for $0.95 and $0.96.
Source for Images: ForecastEx
Note: Prices are highest bids as of the morning of June 18, 2025. Red circles around the thresholds were inserted by J. Torres to highlight his preferred “Yes” and “No” answers throughout different levels.
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