It has been a relatively subdued past 24 hours in markets with focus in tech shares after Apple extended its Friday decline to over 8%.The USD is weaker across the board with Sterling the G10 outperformer while TRY and ZAR have led the gains in major Emerging Market FX. The UST curve is flatter with longer dated yields leading the decline and oil prices have edged higher as US restarts sanctions on Iran.
To mark my 1700th issue of TraderNoble Daily Commentary I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day To demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 20 points yesterday and is now ahead by 258 points for November, having made 2094 points in October,1276 points in September, 599 points in August, 1074 points in July, 994 points in June, 1927 points in May, 1657 points in April, 1760 points in March and 2256 points in February. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
I have a YouTube Channel which contains recent interviews I have given. This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P500 and Dow Jones Indices have started the new week on a positive note, up between 0.50% and 0.75%, but the NASDAQ remains under pressure, down 0.46% with Apple shares leading the decline for a second day in a row. A Nikkei report raised concerns over Iphone demand noting that the company was cancelling a production boost for its iPhone XR line, Apple shares were down more than 3% on Monday, taking the two day decline to just over 8%, its biggest two-day slump in more than five years.
Early in the session European shares closed mixed, the Euro Stoxx ended 0.09%, the FTSE100 was +0.14% while the CAC40 closed -0.1% and the DAX was -0.021%.
Currencies
It has been a quiet start to the week for currencies with the market in a cautious mode ahead of the US mid-term elections and FOMC later in the week. USD Indices are softer across the board with the Emerging markets FX Index leading the gains, up 0.35% while DXY and BBDXY are down -0.25% and 0.10% respectively.
Sterling has been the big mover in G10, following mixed Brexit reports. Yesterday GBP went bid at the open after a the Sunday Times reported that PM May had secured private concessions from Brussels that will allow her to keep the whole of Britain in a customs union, avoiding a hard border in Northern Ireland. However, the positive vibe did not last long as the Telegraph dismissed that report and added that UK Brexit Secretary Raab had privately demanded the right to pull Britain out of EU’s Irish backstop after just three months. ‘’If anything, things are now going backwards’’, one negotiator said. So after trading to an intraday high of 1.3062, the pound fell to an intra-day low of 1.2967 with a softer than expected UK Services PMI not helping the cause. The index printed at 52.2 vs expectations for a 53.3, its lowest levels since March. Later in the session we had confirmation that the U.K. Cabinet will discuss Brexit today, but Prime Minister Theresa May is unlikely to ask Ministers to approve the terms of a deal, but on a more positive note Irish Prime Minister Leo Varadkar said he was willing to consider the latest U.K. proposal. So thanks to the latter news, GBP is the best G10 performer over the past 24 hours, up 0.58% and currently trading at 1.3049. Despite all the noise, the news flow is still more suggestive that a deal with Europe can be reached before the end of the month, then the big test would be whether the deal gets approval from Parliament. GBP is likely to remain a sharp toy for a few more weeks at least.
The Euro also moved sideways to higher, apart from brexit news, the union currency was under pressure early in the session amid ongoing concerns with Italy’s budget proposal. The Euro traded down to a low of 1.1354, but then we had confirmation that the EU commission had decided not to fine Italy (at this stage at least) and instead it has asked for Italy to submit a new budget proposal by 13 November, in line with the rules of the Stability Pact with Brussels announcing its verdict on the new proposal on 21 November. Suggestion that discussions remain amicable appears to have boosted the Euro with the pair on a steady ascendency since yesterday morning and now trading at 1.1415.
Bonds
US Treasury yields are slightly weaker across the curve with a flattening bias, unwinding a little of the big move up in rates last week. The 10-year rate is down 1.5bps to 3.199% and the 30y rate is down 2.20 bps to 3.433%. After some concerns over a potential payback following the big jump in September, the October US ISM Non-Manufacturing Index printed at 60.3 against expectations of a 59.1 outcome. After all of that there was little reaction to the number, but the decent print suggests US growth remains solid.
Commodities
Copper and lead have remained under pressure down 1.91% and 2.76% respectively and oil prices have edged up a little after US sanctions on Iran started yesterday, although eight countries were allowed to continue temporarily buying some crude from the country.
Economics
Bank of Canada Governor Poloz said the Central Bank’s estimated range for the so-called neutral rate — between 2.5 percent and 3.5 percent — is ‘’sufficiently uncertain’’ and ‘’in principle movable’’. It could rise or fall depending on global developments. ‘’All we know is that as we get closer to it, whatever it is, we will begin to see signs that we are no longer stimulating demand,’’ Poloz said. ‘’In fact, we know if we cross into the neutral zone we may see signs’’ that demand is being constrained.
This morning on the Economic Front we have German Factory Orders at 7.00 am. This is followed by German and Euro-Zone Composite/Services PMI at 8.55 am and 9.00 am respectively. Next we have Euro-Zone PMI at 10.00 am. As the US has their Mid-Term Elections we have no US data today.
As for the Mid-Terms, based on recent polls, the most likely outcome is for the Republicans to retain the Senate (85.3%)<https://projects.fivethirtyeight.com/2018-midterm-election-forecast/senate/?ex_cid=rrpromo > and for Democrats to take the House (85.5%<https://projects.fivethirtyeight.com/2018-midterm-election-forecast/house/?ex_cid=midterms-header >). That said given the polls failures to accurately call the 2016 Presidential Election and the fact that all 435 seats in the House are up for grabs, the House outcome probably has more uncertainty than what the polls suggest. Meanwhile, with 26 of the 35 Senate seats up for re-election held by Democrats and only 9 by Republicans, the chances for Republicans retaining the Senate look more likely.
With polls closing at different times in different States and the chances of more than one seat being closely contested it is unlikely we will know the outcome for the House and or Senate by this time tomorrow. Our best guess is by late evening tonight we should have a pretty good idea, assuming no major legal challenges.
As for the result, I think the biggest reaction would be if the Republicans retained control of both the House and Senate. If so, we can look forward to Trump going harder on trade, looser still fiscal policy and even more vociferous attacks on the Fed. This is a likely initially USD positive and hence an Euro negative outcome.
December S&P 500
I am still flat the S&P in what could turn out to be a crucial next 24 hours for the US Stock Indices. The fact that the S&P was able to close over the key 2710/2725 previous resistance area is a positive and the market should soon attack the 200 Day Moving Average which comes in at 2764. With the Dow closing well above its 200 Day MA a break and close over 2764 for the S&P will be constructive for a year-end rally. Today I will now move my buy level higher to 2705/2718 with a 2694 wider stop. I still do not want to be short the market at this time.
EUR/USD
Unfortunately the Euro just missed my initial 1.1335 buy level before rallying and I am still flat. Ahead of what could be a volatile next 24 hours I will now lower my buy level to 1.1270/1.1315 with a lower 1.1230 stop. I still do not want to be short the Euro at this time.
December Dollar Index
I am still flat the Dollar and today I will now raise my sell level to 96.95/97.35 with a 97.80 higher stop.
December DAX
The DAX again closed over 11400 which is positive but against that is struggling to move higher. I am still flat and today I will leave my buy level unchanged from 11310/11380 with the same 11255 stop.
December FTSE
No change as my only interest in buying this market is on a dip lower to 6970/7020 with the same 6930 stop. Ahead of the Mid-Term Elections today I am not taking any chances as there will be plenty of time to react after the results are in.
Dow Rolling Contract
The Dow closed over 300 points above its 200 Day Moving Average which is positive. If the S&P can follow suit then we could have a nice rally over the coming weeks. Today I will now raise my buy level to 24950/25180 with a 24785 wider stop. I still do not want to be short the market at this time especially as the Dow has now rallied over 1200 points from last Monday’s low print.
December NASDAQ
My NASDAQ plan worked well with the market trading lower to my 6880 buy level before having a late rally. As I wanted to bank some points for yesterday’s session I covered this long position too early at 6900 and I am now flat. Today I will again look to buy the market on any dip lower to 6800/6860 with a 6750 wider stop.
December BUND
I am still flat the Bund and today I will now raise my sell level to 160.50/160.90 with a 161.25 stop.
Gold Rolling Contract
Gold is finally it difficult get a decent rally going despite the fact that the market is continuing to hold the key 1200/1212 support area. As I am back long Silver I will now lower my Gold buy level to 1205/1214 with a 1198 stop.
Silver Rolling Contract
Silver traded lower to my 14.60 buy level. I am still long and I will now raise my stop on this position to 14.15 with a now lower 14.70 T/P level. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Recent Comments