A much stronger than expected ADP Report saw Bond Yields sharply higher across the board yesterday. The 2-year ended Thursday 10 basis points higher, to its highest level since 2007 while 10-year Treasuries closed at 4.05% which is its highest close since 2000. Equity Markets were slammed as a result with the DOW leading the fall, closing lower by 1.07%. The VIX which was 20% higher at one point, closed 9% higher at a price of 15.44. This report will not dissuade the Fed from further tightening especially if we see a strong NFP Report this afternoon. U.S. Treasury Secretary Janet Yellen arrived in Beijing earlier yesterday with the aim of establishing common ground and enhancing communication between the U.S. and China. This visit represents a significant test of the policy framework outlined by Yellen in April, which focuses on safeguarding national security interests while maintaining economic engagement with China. Yellen’s arrival comes at a time of heightened tensions between the two largest economies in the world. Recently, China imposed restrictions on the export of two metals essential to key technology industries. This move is seen as a further escalation in the ongoing trade war, which began to intensify last year with the imposition of U.S. export controls on semiconductors and chipmaking equipment. In a significant development, Tesla (TSLA) and several top Chinese automakers have made a commitment to uphold fair competition and avoid engaging in “abnormal pricing” in the world’s largest electric vehicle (“EV”) market. This move indicates a potential resolution to the price war that has unsettled the industry in China this year. By making this commitment, the companies aim to foster a more stable and competitive environment in China’s booming EV market, benefiting both the industry and consumers alike. European Markets closed sharply lower. A recent survey has revealed that U.K. companies are anticipating inflation to exceed the Bank of England’s target rate by almost double in three years’ time. In response, traders are fully pricing in the expectation that the Bank of England will raise its key lending rate by an additional 150 basis points to 6.5%. If this projection materialises, it will bring interest rates in the U.K. to the highest level since 1998. In Asia, Chinese investors are increasingly moving their funds offshore and utilising Hong Kong as a haven to make deposits and insurance purchases. This trend highlights concerns about China’s economic recovery, which has been sluggish despite hopes for a post-pandemic rebound and reflects a lack of confidence in the domestic economy. Analysts caution that this could further strain the Yuan, which is already hovering near eight-month lows. This morning the Nikkei closed a further 1.08% lower. The Nikkei has now fallen 4.5% since Monday’s 33-year high print. Elsewhere, Oil closed flat, while Gold fell 0.4%.
To mark my 2800th 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 lost 148 points yesterday and is now ahead by 2 points for July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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&P 500 closed 0.79% lower at a price of 4411.
The Dow Jones Industrial Average closed 366 points lower for a 1.07% loss at a price of 33,922.
The NASDAQ 100 closed 0.75% lower at a price of 15,089.
The Stoxx Europe 600 Index closed 2.42% lower.
This morning, the MSCI Asia Pacific closed 0.7% lower.
This morning, the Nikkei closed 1.06% lower at a price of 32,427.
Currencies
The Bloomberg Dollar Spot Index closed 0.20% higher.
The Euro closed 0.1% higher at $1.0872.
The British Pound closed 0.2% higher at 1.2732.
The Japanese Yen fell 0.3% closing at $144.21.
Bonds
Germany’s 10-year yield closed 15 basis points higher at 2.63%.
Britain’s 10-year yield closed 20 basis points higher at 4.69%.
U.S.10 Year Treasury closed 12 basis points higher at 4.06%.
Commodities
West Texas Intermediate crude closed 0.01% higher at $71.80 a barrel.
Gold closed 0.4% lower at $1909.10 an ounce.
This morning on the Economic Front we already had the release of German Industrial Production which fell 0.2% versus 0.0% expected. At 9.00 am we have a speech from ECB Member De Guindos. This is followed at 1.30 pm by U.S. Non-Farm Payrolls, including the Unemployment Rate and Average Earnings. Finally, at 3.00 pm we have a speech from ECB President Lagarde.
Cash S&P 500
Yesterday, was the first session in many weeks when there was real fear in the market. It is rare that we see a 20%+ rally in the VIX as the market got slammed following the huge ADP Employment Report. Bond Yields surged and for the first time in many months the equity market reacted negatively to rising Bond Yields. The 10-year hit its highest level since 2000 before easing slightly into the close. This move lower saw the whole of my S&P buy level triggered, for a 4404 average long position. The S&P hit an afternoon low at 4385 before bouncing 26 Handles into the close. As I was caught offside on so many long positions I exited this S&P position at 4407 and I am still flat. All eyes will be on the NFP Report to see if yesterday’s monster ADP Report is reflected in today’s Employment Report. The S&P has support from 4365/4383 where I will be a strong buyer with a fixed 4349 stop. If stopped, I will be an aggressive buyer from 4320/4336 which is the August highs with a 4309 ‘’Closing Stop’’. Ahead of the weekend I do not want to be short the S&P.
EUR/USD
Despite the sell-off in equity markets the Euro is attracting bids below 1.0850. I am still long at 1.0900 with the same 1.0785 ‘’Closing Stop’’. I will continue to look to add to this position at 1.0830 while leaving my 1.0940 T/P level unchanged.
June Dollar Index
The Dollar is opening slightly lower at 103.02 this morning. I will continue to be a buyer on any dip lower to 102.00/102.60 with the same 101.60 ‘’Closing Stop’’. If triggered, I will have a T/P level at 103.10.
Cash DAX
Wrong! The DAX is got slammed yesterday falling 350 points from where I marked prices 24 hours ago. This is the biggest one-day fall since early May. I bought the DAX at an average rate of 15690 before being stopped out of this position near the New York close at 15575 and I am now flat. This DAX has further support from 15340/15440 where I will again be a buyer with a 15265 ‘’Closing Stop’’. If triggered, I will have a T/P level at 15550.
Cash FTSE
Wrong! Gilt yields rising by a huge 20 basis points saw the FTSE suffer its worst day since late February. This move lower saw me stopped out of my 7425 average long position at 7313 and I am now flat. The FTSE is oversold following yesterday’s aggressive sell-off. We have support from 7160/7220 where I will again be a buyer with a tight 7110 ‘’Closing Stop’’.
Dow Rolling Contract
Yesterday’s aggressive sell-off saw the Dow hit my second buy level at 33920 for a now 34040 average long position. The Dow hit an afternoon low at 33770 before bouncing 150 points off this low print into the close. I am still long. I will now lower my exit level on this position to a small loss at 34,000. Meanwhile I will leave my 33795 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My latest 15230 short NDX position worked well as the market traded lower to my 15110 T/P level and I am now flat. Yesterday was the first session when we saw the NDX fall on higher Bond Yields. Treasury Yields have been rising steadily over the past few weeks but until yesterday this was ignored. The NDX has resistance from 15140/15240. I will be a seller on any rally to this area with a lower 15335 ‘’Closing Stop’’. I still do not want to be long the NDX at this time.
September BUND
Wrong! It has been a while since I lost points on the Bund. However, the aggressive move higher in U.S. Treasury Yields saw my 132.85 average long position stopped at 131.30 and I am now flat. Ahead of the NFP this afternoon, I am going to stay flat the Bund. Given how oversold the Bund is trading I cannot be a seller while Bund Yields are much lower than both the U.S. and the U.K. preventing me from being a buyer at this time.
Gold Rolling Contract
My Gold plan worked well as the market traded lower to my 1904 buy level before rallying to my revised 1912.50 T/P level and I am now flat. With the Euro attracting bids on dips, I am not convinced that Gold will fall much further from here. We have support from 1880/1895 where I will be an aggressive buyer with a 1869 ‘’Closing Stop’’.
Silver Rolling Contract
Silver had a small fall yesterday. I am still long at an average rate of 23.63 with the same no stop policy. I will leave my 24.20 T/P level unchanged for now. If this changes I will be back with a new update for my Platinum Members.
Recent Comments