It’s been a whippy, but in the event, mostly down past 24 hours for the Euro. Early yesterday morning after I had posted, China activity data for May was released which mostly met market growth expectations, followed up by better Lending and Money Supply data. Iron ore prices also ticked higher yesterday to the highest since late January, though base metals were weak yesterday.
For anybody interested in my New Platinum Service, it made 170 points on Monday, 130 points on Tuesday, 165 points on Wednesday and 85 points yesterday. Last week it generated 955 points. If anybody is interested please email me on bryan@tradernoble.com for more information.
As well, the People’s Bank of China also announced a Yuan internationalisation report on its website yesterday, sequencing reforms, starting with cross border trade, cross border direct investment, the RMB as a reserve currency, and other reforms to capital account, interest rate and exchange rate mechanisms. The Aussie consolidated yesterday afternoon ahead of US retail sales, a report that met market expectations. And the growth hurdle was a reasonably ambitious, but US shoppers did not disappoint after what’s been a very weak Q1 and a flat April. The market was looking for 1.2% growth in headline sales and that is what retailers delivered in growth. There was a small sweetener in the form of a modest 0.2% upward revision of April sales. The report offers the prospect of broader growth re-emergence to add in the consumer as the FOMC consider their forecasts and policy outlook at next week’s June 18 meeting.
This is the meeting with a formal forecast update and Fed Chair Yellen press conference which will definitely garner intense market interest. US Fed Fund futures are almost unchanged in the wake of Retail Sales, the market still now less than 50% priced for a 25 bps “liftoff” in the Fed funds rate by the September. The US$ had only the briefest of relief rallies, then quickly reversed, before steadying and some net selling as the New York session wore on. And so it was in reverse for the likes of the AUD/USD in reverse movement, re-establishing a base of support through the remainder of the session.
There was yet more Greek news, the IMF team flying back to Washington apparently without Greece accepting its reforms, IMF spokesman Gerry Rice telling reporters in Washington that there remain major differences in most key areas. Likewise, Europeans are equally frustrated, EU President Donald Tusk seemingly drawing a line in the sand (again?), saying “we need decisions now there’s no more space for gambling the day is coming I’m afraid that someone says the game is over”. He suggested that next week’s June 18 Euro-Group Finance Ministers meeting is “very crucial”. Now there’s a phrase that’s been used once or twice during this total imbroglio. We wait and observe how the events unfold. It feels closer to whatever a breaking point might be, though we seem to have been at that point many times before. Despite these developments, the EUR mostly made up ground against what was a soggy US$ yesterday. Greece’s unemployment rate hit 26.6% in Q1, which was ignored by the market as Bond Yields had a substantial fall in Germany after what has been a very bad June for Bond Yields in general. This morning on the economic front we have UK Construction at 9.30 am. This followed at 10.00 by Euro-Zone Industrial Production. Later this afternoon we have US CPI and the University of Michigan Consumer Confidence which will released at 1.30 pm and 3.00 pm respectively.
June S&P 500
Unfortunately the S&P just missed my 2102 buy level by 1 handle before going on to have a nice 10 handle rally and I am still flat. As I mentioned yesterday I do not want to be short this market ahead of next week’s key Fed Meeting and Yellen press conference along with the June Contract Expiry on Friday. Today I will raise my buy level slightly to 2097/2103 with a 2093 stop. Remember a break and close over 2120/2126 is very bullish short-term.
EUR/USD
The Euro had a wild trading session yesterday having been bid early on before getting hit hard on the US Retail Sales data and then finally weakening again into the New York close where the EUR/USD again closed over 1.1250. Yesterday long after I posted the market dropped top my 1.1250 buy level before stopping me out of this position at 1.1215. Thankfully I had a re-buy which got triggered at 1.1190 and I was able to cover this position at 1.1220 as outlined in my Platinum Service and I am now flat. Today I will lower my buy level to 1.1160/1190 with a 1.1130 stop. Despite the Euro weakness over the past 48 hours I do not want to be short the Euro at this time.
September Dollar Index
Yesterday after I posted the Dollar rallied to my 95.50 sell level. However with the June Contract expiring on Monday I have now covered this position near the close last night at 95.30 and I am now flat. The September Contract trades at a discount of 34 points to the June Contract and today I will again be a small seller on further rally in September to 95.60/95.90 with a 96.20 stop. I still do not want to be long the Dollar at this time.
June DAX
The DAX had another explosive trading session to the upside and I am still flat as the market missed my buy level. I am very nervous holding a DAX position as this time as I do not know what is going to happen at next week’s Euro Zone Meeting as the Finance Ministers try to resolve what is now a serious situation. I will leave my buy level unchanged at 11140/11190 with an 11090 stop. I still do not want to be short the market at this time.
June FTSE
The FTSE opened strong this morning with the market hitting my 6860 sell level before having a late day sell-off. I am still short and today I will lower my stop on this position to 6880 which is just above yesterday morning’s high. My only interest in buying this market is still on a dip to 6740/6775 with the same 6720 stop.
Dow Rolling Contract
No change on what was a very quiet trading session for the Dow. I will still be a small buyer on any dip to 17930/17970 with a 17880 stop. I still do not to be short ahead of next week.
September BUND
Just like the S&P above the BUND just missed my buy level by 7 points before going on to have a 150 point rally and I am still flat. Today I will raise my buy level to 149.40/149.80 with a 148.95 stop.
Gold Rolling Contract
My Gold plan worked well yesterday as the market while heavy for most of the trading session which saw me go long at my 1175 buy level before having a nice spike which enabled me to cover this position at 1184 as outlined in my Platinum Service and I am now flat. Today I will again be a small buyer on any dip to 1166/1175 with an 1159 stop.
Silver Rolling Contract
No change as I am still long at 15.90 with the same 15.40 stop.
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