The perception of a lower for longer Fed has slowly but surely brought back an improvement in risk sentiment. Global equities had another positive trading session yesterday as oil prices edged higher while risk sensitive currencies have again outperformed with the AUD top of the FX leader board.
To mark my 1100th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Service which includes 1/4 updated emails throughout the trading day. This offer is open to both new and existing members and if anyone is interested please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 62 points yesterday and is now ahead by 387 points for June. The previous three months saw gains of 1532, 2175 and 2265 points respectively. Since I started this service over 12 months ago it has averaged a monthly gain of 2200 points.
Euro Stoxx 50 Index ended the day with a 1.30% gain while in the US a late sell-off in bank and pharmaceutical shares took some of the gloss out of the US trading session. The Dow and S&P closed up 0.1% and 0.13% respectively while the NASDAQ slipped into negative territory.
The US Dollar is weaker against all G10 currencies with the exception of the SEK. The AUD at +1.20% is top of the leader board aided by yesterday’s RBA neutral policy stance. Meanwhile Sterling which closed 0.68% higher remains the most volatile G10 currency with moves dictated by contradicting polls suggesting a majority is either with ‘Brexiters’ or ‘Bremainers’.
In commodities, WTI is back above $50 and Brent is $1 higher at $51.41. Gold closed unchanged but is trading higher this morning at $1250.
The expectation of a lower for longer Fed has continued to weigh on Global Bond Yields. 10 Year Bunds fell 4bps yesterday and ended the day at just above 0%. Meanwhile the 10 Year Treasuries are still flirting with a break of 1.7%.
As mentioned in yesterday’s commentary the RBA left the OCR unchanged at 1.75% which somewhat surprised the many analysts in the market by moving to a neutral stance. The NAB has maintained its forecast of unchanged interest rates in the immediate future. The Statement suggests the RBA’s May easing is currently seen as sufficient to return inflation to target and achieve sustainable growth. That said inflation remains important and a low Q2 CPI print which is due on July 27 could still trigger a cut further down the line.
Today is very light for economic data. At 9.30 am we have UK Industrial Production while later at 3.00 pm we have the very important US JOLTS Job Opening as this is one of the most important indicators which Fed Chair Yellen watches closely.
June S&P 500
I am still flat the S&P which just missed my 2122 sell level with a late fade as the banks got hit on the prospect of no further interest rate hike in the foreseeable future and I am still flat. Today I will lower my sell level slightly to 2020/2026 with a 2031 stop. I will now lower my buy level slightly to 2093/2098 with a 2088 stop. If I am taken long and subsequently stopped out of this position I will be a more aggressive buyer in front of 2080 with a 2073 stop.
EUR/USD
My Euro plan worked well with the Euro trading lower to my 1.1340 buy level. The Euro has had a nice rally which has enabled me to cover this position at my revised 1.1362 T/P level and I am now flat. Looking at the charts the Euro is looking toppy and my only interest in buying the market today is on a dip lower to 1.1300/1.1330 with a 1.1260 stop. Remember the 1.1280 level is crucial.
June Dollar Index
No change as I am still a buyer on any dip lower to 92.10/92.50 with a 91.70 stop which is just below the early May low print. I will still be a small seller on any rally higher to 94.50/94.90 with a 95.25 stop.
June DAX
I was very unlucky with my DAX sell level at 10340 as the market made a high of 10317 before selling off 100 points and I am still flat. Today I will lower my sell level slightly to 10310/10360 with a 10410 stop. Given the strength of the Euro I still do not want to be long the DAX at this time.
June FTSE
Overnight the FTSE traded lower to my 6255 buy level. I am still long and I will now raise my stop on this position to 6215. Remember the 6180/6230 area is very strong support for the FTSE.
Dow Rolling Contract
I am still flat the Dow and today I will now raise my sell level slightly to 18080/18140 with an 18190 stop. The weakness in the US Dollar is really helping the Dow stocks at this time. I will leave my buy level unchanged at 18800/18860 with a 18750 stop.
June BUND
The BUND traded higher to my 165.45 sell level. However as I still expect the Bund to print with a negative interest rate I have now cut this position morning at 165.35 and I am now flat. I will now look to put on a more aggressive short position on any rally higher to 165.80/166.20 with a 166.50 stop. I do not want to be long the Bund at this time.
Gold Rolling Contract
Gold missed my 1227 buy level with a 1234 low print yesterday before having a nice rally overnight and I am still flat. Today I will raise my buy level to 1230/1237 with a 1224 stop.
Silver Rolling Contract
My long 16.30 Silver position worked well yesterday as shortly after I posted Silver traded lower to 16.19. Overnight Silver has traded as high as 16.69 which has enabled me to cover this position at my 16.60 T/P level and I am now flat. Today I will again look to buy Silver on any dip lower to 16.25/16.55 with a 15.85 stop.
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