Yesterday, Bond and Equity markets continued to trade listlessly into today’s conclusion of the FOMC two day meeting together with the surrounding raft of US data releases. US Equities closed flat with 10 Year Bond Yields also flat at 2.6%. This follows a generally positive day for European Equities where the Euro Stoxx 50 rose by 0.64%. Spain was the biggest contributor here with some heart being taken from the mere 0.1% drop in Q2 GDP which suggests that Spain could be poised to move into positive growth terrain in the second half of 2013 – this help the IBEX to rally by 1%. Broader Euro-Zone data, in the form of the various July Business and Consumer Confidence readings, were for the most part improved on June albeit slightly mixed relative to consensus expectations.
In the US, the S&P/Case-Schiller May House Price Survey showed annual price growth across 20 major cities accelerating from 12.09% to 12.17% although this was a bit below expectations as was the monthly rise of 1.05% (1.4%expected) and it had little effect on the markets.
This morning on the economic data front we have Euro-Zone CPI and the Unemployment Rate. Later at 1.30pm we have the US ADP Employment Change and Cost Index (this data will be closely watched ahead of Fridays Non Farm Payroll data), US GDP and the Chicago Purchasing Managers Survey. This data is followed at 7pm by the FOMC Meeting Report and the press conference afterwards.
September S&P 500
Finally we have arrived at FOMC day and the very important ADP Employment data at 1.30pm. The S&P had a nice rally this morning and I was able to cover my 1681 long position at 1688 and I am now flat. I am to going to stay flat until we get the FOMC announcement. To complicate matters, today is also month-end so any sell off after the FOMC announcement might well get bought as traders try to put in a positive ending to the month. Today if we get negative news from the Fed I will be a a buyer on any dip to 1666/1671 with a 1662 stop. My only interest in selling the S&P is on a rally to 1699/1704 with a 1707 stop.
Euro/USD
The Euro just missed my 1.3230 buy level before having a nice rally and I am still flat. Today I will be a small buyer on any dip to 1.3170/1.3200 with a 1.3160 stop. My only interest in selling the Euro is still at the 1.3370/1.3400 area with a 1.3420 stop.
September FTSE
The summer doldrums for the FTSE trading continues as I am still long at 6525 from last week. Today I will raise my stop to 6500 which is just below yesterdays low and I am going to try and be flat ahead of the FOMC announcement. If I am stopped out I will be a more aggressive buyer on any dip to 6440/6470 with a 6425 stop. I will also be a seller on any rally to 6600/6630 with a 6645 stop.
September DAX
No change from yesterday as I am still a buyer on any dip to 8200/8230 with a 8180 stop. I will also be a buyer on any break of 8330 with a 8295 stop.
September BUND
The Bund just missed my 142.20 buy level before having a small rally and I am still flat. Today given that its is FOMC Announcement day I will lower my buy level to 141.70/142.00 in small size with a 141.50 stop. I still do not want to sell this market unless we rally to 142.90/143.20 with a 143.40 stop.
Gold Rolling Contract
No change as I am still a small buyer on any dip to 1310/1316 with a 1305 stop. Gold has the potential to be very volatile after the FOMC Announcement.
Silver Rolling Contract
I said that I would give Silver one more day to rally and when this did not happen yesterday I cut my 19.80 long position at 19.95 and I am now flat. Just like Gold above, Silver also has the potential for a volatile move later. If Silver drops down to 19.20/19.50 I will be a small buyer with a 18.95 stop. I will also be a buyer on any rally over 20.65 with a 20.20 stop.
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