Markets are little changed in the lead up to Jackson Hole, with little in the way of major FX moves to report. The Bloomberg spot USD index has made some net gains by closing up 0.15%, more from a continued a choppy Pound and somewhat lower levels for the Yen and the CHF. The AUD has continued to trade in its recent range, right on 0.79, having tested the 0.7870/75 area late in the Asia session yesterday. Bulk commodity prices were little changed over the past 24 hours, base metals were stronger (Cu +1.87%, Ni +0.73%), oil fell on near term threats to refinery demand from an approaching Cyclone Harvey. Gold eased. The Euro has been relatively steady.
To mark my 1400th 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. This offer is open to both new and existing members and if anyone is interested can you please contact me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 26 points yesterday and is now ahead by 1082 points for August, having made 1096 points in July, 1023 in June, 1076 in May, 1376 in April, 1335 in March, 1481 in February and 1734 in January. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1700 points.
EUR/GBP continues to garner trend support as the clock keeps ticking on Brexit. Figures released by the UK Office of National Statistics yesterday showed that net migration into the UK had fallen by a quarter over the past year with the numbers arriving from the EU down 51K and EU citizens leaving the UK up 35K. A new portmanteau term has been coined to capture how EU citizens are voting with their feet as Brexit looms, this one Brexodus. Also, the second estimate of UK GDP growth for Q2 was left unrevised at 0.3%/1.7% but amid the expenditure detail of the report confirming the slowdown in both personal consumption and business investment. The CBI Retail report for August fell back to post-Brexit poll lows, the Confederation reporting a slump in sales volumes from 22, back down to -10.
In the US, it’s been a combination of limited economic news, market positioning ahead of Jackson Hole this afternoon, and further West Wing-Congress news and sound bites. There is also Cyclone Harvey approaching the Gulf Coast, potentially disrupting oil production and business activity. Oil prices fell on threats to closing refineries with gasoline margins higher. Already workers have left some oil platforms. Jobless Claims were again very low in the week to 19 August (August payrolls survey week) at 234K, still within shooting distance of this year’s lows and pointing to still low unemployment. Existing Home Sales fell 1.3% in July, a modest miss against expectations of a 0.5% rise. The Kansas City Fed Manufacturing index for August was though stronger at 16, up from 10 and toward the highs of this year.
The war of words between the West Wing and key Republicans has gone back up another notch. POTUS tweeted why the GOP had not attached raising the debt ceiling to a recently passed Veterans’ Bill? It sounds like he has a point on that one. (Conservative Republicans want expenditure cuts enclosed with raising the debt ceiling). Senate majority leader McConell has been endeavouring to smooth over the relationship referring to work on tax reform and infrastructure, but even he copped another twitter serve for not repealing Obamacare. POTUS also is still seething over a lack of funding for the wall, something that he made reference to with gusto at this week’s Phoenix rally. Added into the mix, Moody’s has warned over any prospective debt repayment as having negative ratings implications. Early October might be the “x-date” when funds dry up and with debt obligations coming up in mid-October.
Finally, in the lead up to Jackson Hole, the USD has been steadier with US Treasury yields a little higher.
This morning on the Economic Front we have the German IFO Survey at 9.00 am. This is followed at 1.30 pm by the US Durable Goods Orders. At 3.00 pm Fed Chair Janet Yellen speaks at Jackson Hole on ‘’Financial Stability’’. US financial conditions are currently very easy, despite the fact that we have had two Fed rate hikes this year, hence there is a risk that she notes that it is not just evidence of of higher inflation that is going to be driving decisions on further Fed tightening. Any comments along this line could push the US Dollar and front end US Treasury Yields higher.
Finally on what promises to be a volatile trading session into the New York close the ECB President will speak at the same conference at 6.00 pm.
September S&P 500
Thankfully the S&P was trading at my original 2442 T/P level by the time you got yesterday morning’s Daily Commentary which was a nice gain for anyone who had bought the market late on Wednesday at my second 2437 buy level. It took a while but after a volatile trading session the S&P did eventually hit my 2435 buy level with a 2434.25 low print before rallying back above 2442. As I had to catch a flight I covered my long position at 2436.50 and I am still flat. I am going to stay flat until we get Fed Chair Yellen’s speech at Jackson Hold this afternoon. If the S&P dips after she speaks I will again look to buy the market from 2427/2434 with a 2422 stop. If I am taken long and subsequently stopped out of this position I will be a more aggressive buyer in front of 2417 with a 2410 stop. Despite the weak price action I still do not want to be short the market at this time.
EUR/USD
The Euro traded in a narrow range yesterday as we wait for Yellen and Dragi to speak this afternoon. I am still flat the Euro and I will continue to look to buy the market on any dip lower to 1.1690/1.1730 with the same 1.1660 stop. I still do not want to be short the Euro at this time despite how overbought the market is trading preferring instead to continue to buy the Dollar Index on dips.
September Dollar Index
The Dollar just missed my 93.05 buy level yesterday with a 93.10 low print and I am still flat. Buying the dip in the Dollar has worked really well over the past few months and today I will use any dip lower to 92.50/92.85 to buy the Dollar with a 92.20 tight stop. Given how oversold the Dollar is trading I still do not want to be short the market at this time.
September DAX
The DAX also just missed my initial buy level before rallying as expected ahead of both Yellen and Dragi this afternoon and I am still flat. Today I will lower my buy level slightly to 12020/12080 with an 11970 stop. Despite the weak price action I still do not want to be short the DAX at this time.
September FTSE
As I have mentioned consistently over the past few weeks with the continued weakness in Sterling there is no point in been short the FTSE Market. Yesterday the FTSE again missed my buy level before rallying into the close and I am still flat. Today I will again raise my buy level to 7330/7365 with a 7300 stop.
Dow Rolling Contract
Unfortunately and frustratingly the Dow missed my 21740 buy level with a 21761 low print before finally rallying strongly into the close and I am still flat. Just like the S&P above I will stay flat until we get Yellen’s key speech out of the way. If The Dow subsequently sells off I will again look to buy the Dow on any dip lower to 21670/21730 with a 21620 stop. Ahead of the weekend I still do not want to be short the Dow at this time especially with month-end next Thursday.
September BUND
No change as I am still a seller of the Bund on any rally higher to 164.95/165.25 with the same 165.50 stop. The yield on the Bund is insane especially given the recent pick up in German growth and we have to be patient in waiting to put on a more macro short position.
Gold Rolling Contract
Gold continues to trade in a narrow range since we broke the previous 1265/1275 resistance level with the market so far unable to break the key 1300/1310 next resistance level. I am still flat and today I will continue to look to buy the market on any dip lower to 1268/1275 with the same 1263 stop.
Silver Rolling Contract
My Silver plan worked well with the market again hitting my 16.85 buy level before bouncing back above 17.00 in what was another uneventful trading session for the precious metals. Again in keeping my theme of trying to bank points every day for the least amount of risk I used this rally to cover my long position at my revised 16.96 T/P level and I am now flat. Today I will now look to buy Silver on any dip lower to 16.45/16.75 with a lower 16.25 tight stop.
Recent Comments