Looking across markets, not much to say about international equities or bonds over the past 24 hours with the S&P closing lower by 0.2. Treasury yields are little changed, albeit the US Treasury curve is another 2bps or so flatter led by a pick-up in yields at the front end. All of the action is in currencies, led by a 1.35% drop in the AUD to currently sit around 0.7250, amid a generally stronger USD. Sky News is reporting that Peter Dutton has the required 43 signatures demanded yesterday by Malcom Turnbull in order to call a party room meet/vote today. This took place a few hours ago. As a result of this meeting Turbull lost the vote and Scott Morrison is the New PM of Australia. Markets have taken the news well with the AUD/USD spiking to an overnight high at 7290 before having a small sell-off to currently trade at 0.7275.
To mark my 1650th 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@tradernoblecom for details
For anyone following my Platinum Service it was flat yesterday as none of my calls got hit and is still ahead by 328 points for August, having made 1074 points in July, 994 points in June, 1927 points in May, 1657 points in April, 1760 points in March, 2256 points in February, and 879 points in January. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Currencies
AUD was under pressure from mid-morning time yesterday but not just on domestic political shenanigans. The latter news came at about the same time that Australian security forces were reporting that they opposed the involvement of China’s ZTE and Huawei in the roll out of the 5G network in Australia. Last night a China foreign ministry spokesman urged the Australian government to abandon ‘’ideological biases’’.
AUD/USD fell from around 0.7350 to the high 0.72s in London time fell to a low of 0.7244, these latter moves coming in the context of fairly broad-based USD strength that sees EUR/USD off half a cent (EZ PMIs were fairly flat and not a market mover) and the British Pound 0.75% lower. Sterling has not been helped by the latest government report on the implications of a no deal/hard Brexit, which highlighted potential disruption to banking services, pension payments, higher prices and the step-up in red-tape that would be required regarding trade with the EU as ‘’non-preferential, World Trade Organisation’’ terms would apply.
Emerging market currencies have also been under pressure, the South African Rand still suffering from Trump’s twitter intervention yesterday saying he has asked Secretary of State Mike Pompeo to ‘’closely study’’ South African land, farm seizures and ‘’large scale killing of farmers’’, an accusation the South African President Ramaphosa has strenuously denied. ZAR is 1.7% lower, as is the Brazilian Real as political (election) concerns continue to mount.
Bonds
US 10yr Treasuries are up 1bp at 2.83%, unaffected by the slightly risk-off tone in equities. 2yrs have sold-off 2bp to 2.61%, leaving the 2s10s curve at yet another cycle low of 20.5bp.
Kansas Fed President George said yesterday that President Trump’s criticism of the Fed won’t influence the central bank’s decisions. A known hawk, she expected two more hikes this year and thought the neutral rate was 3%, just over 100bps higher than the current Fed Funds rate. She suggested it was a difficult debate about how much to raise rates before pausing its upward march. We will hear more from the Fed this afternoon when Chair Powell addresses the Jackson Hole conference.
Equities
The S&P 500 is 0.17% down at the close, the Dow -0.3% and NASDAQ 0.13%. Energy, materials and financials have led the S&P decline, down 0.5-0.75%. Earlier European stocks ended with even smaller declines than the US, while yesterday the ASX (-0.34%) was an underperformer and where the political news did appear to be taking a toll, financial and real estate leading the decline. Is the latter a reflection of perfections Labour may now be closer to being in power and given its stated policy on negative gearing?
Commodities
Oil is little changed on this time yesterday. Gold is down another 1% and base metals mixed with aluminium up 0.5%, nickel down 1.9, iron ore -0.2% and China steel prices off 1.9%.
This morning on the Economic Front we already had the release of German GDP which came in as expected with a rise of 0.5%. The only US data of note is Durable Goods Orders at 1.30 pm.
This afternoon Jerome Powell gives opening address at the Kansas Fed Jackson Hole symposium. This will be the focus of attention by markets for the rest of the trading session and will affect Sunday’s re-opening of the US Futures Markets.
September S&P 500
I am still flat the S&P which again just missed my 2853 buy level. Ahead of a Fed Chair Powell’s opening address at Jackson Hole I am going to leave my buy level unchanged from 2846/2853 with the same 2840 stop. If I am taken long and subsequently stopped out of this position I will be a more aggressive buyer on any further dip lower to 2825/2833 with a 2818 stop. As we are so close to all-time highs I still do not want to be short the S&P at this time.
EUR/USD
After rallying for the past few days, the Euro lost 90 points yesterday as the Dollar renewed its rally with the 1.1630/1.1675 area proving to be strong resistance. I will now lower my sell level to this area with a lower 1.1710 stop. Meanwhile I will leave my 1.1445/1.1485 buy range unchanged. If I am taken long in this area I will have a T/P level at 1.1515, with a same 1.1405 stop. If I am taken short I will have a T/P level at 1.1601.
September Dollar Index
The Dollar just missed my 95.70 sell level yesterday and I am still flat. Ahead of Fed Chair Powell’s speech this afternoon I will now raise my sell level slightly to 96.00/96.40 with a 96.75 stop. I still do not want to be long the Dollar at this time.
September DAX
The DAX again traded in a narrow range yesterday and I am still flat. Thankfully the European Summer Holidays are nearly over as August has been one of the lowest volatile months for European Equities and Bonds in many years. Today I will again raise my buy level slightly to 12180/12250 with a 12125 stop. I still do not want to be short the DAX at this time.
September FTSE
Unfortunately the FTSE twice just missed my initial 7515 buy level before having a nice rally and I am still flat. With Sterling getting hit hard yesterday it is difficult to be short the pound despite the worsening political situation. Today I will lower my buy level to 7450/7490 with a 7415 stop. Ahead of a long-weekend in the UK (Monday is a Bank Holiday) I do not want to be short the FTSE at this time.
Dow Rolling Contract
I am not having much luck with my calls this month as yet again the Dow missed my initial 25580 buy level with a 25602 low print before having a nice rally and I am still flat. Today I will lower my buy level slightly to 25390/25540 with a lower 25310 stop. I will also lower my sell level to 25900/25050 with a 25140 stop.
September NASDAQ
I am still flat the NASDAQ with the market again having difficulty in breaking the key 7510/7550 resistance area. Today I will leave my sell range unchanged with a 7585 stop. The 7350/7395 area is good support and today I will be a buyer on any dip to this area with a 7310 stop.
September BUND
I am still flat the Bund which continues to have difficulty in breaking above the key 164 resistance area. Today I will again lower my sell level to 163.80/164.25 with a 164.55 stop. Given the insanely low yield I still do not want to be long the market at this time.
Gold Rolling Contract
As I am still long Silver I emailed my Platinum Members to lower their buy level in Gold to 1171/1179 with a 1164 stop. If you did buy Gold at my 1185 initial buy level I would take your small gain here as we wait for Fed Chair Powell’s speech this afternoon.
Silver Rolling Contract
No change as I am still long in small size at 14.75 with the same 14.35 stop. I will now lower my T/P level on this position to 14.85 which is below this week’s 14.90 high print. The extreme negative sentiment towards both Gold and Silver still indicates that we will get a sharp rally over the coming weeks.
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