U.S. saw two-way trade on Wednesday with morning weakness offset after a strong cash open before selling off best levels into the closing bell. Sectors were mixed, Energy, Consumer Discretionary, Financials and Tech outperformed, while Utilities, Real Estate and Consumer Staples lagged. There were several noteworthy developments. On geopolitics, Axios reported that President Trump has moved closer to a major war with Iran, reigniting concerns in the region, resulting in oil prices rallying. Meanwhile, US data was overall strong with Durable Goods, Housing Data and Industrial Production beating analyst expectations. Meanwhile, the FOMC Minutes continue to show a divide on the rate outlook at the Fed, but several preferred two-sided guidance, noting upward adjustments could be appropriate if inflation remains above target. The strong data and geopolitical developments supported the Dollar, seeing it outperform, while the New Zealand Dollar lagged after a dovish RBNZ Meeting hold overnight. T-notes were lower across the curve on the data and upside in energy prices, while a weak 20-year auction did no favours. There was little reaction to the FOMC minutes, aside from some chop in USD/JPY. It noted that rate checks conducted by the New York Fed heading into the meeting were solely on behalf of the US Treasury, and it confirmed that there were no intervention operations in foreign currencies during the intermeeting period. Gold and Silver prices rallied on Wednesday, while Bitcoin saw further pressure. The FOMC’s January Meeting Minutes showed a broad agreement to hold rates at 3.50-3.75%, with almost all participants backing no change, while a couple preferred a 25 basis points cut on the grounds that policy remained restrictive and labour market risks persisted (Miran and Waller). Those favouring a steady stance argued that, after 75bps of easing last year, policy was within estimates of neutral, and most expected supportive financial conditions and fiscal settings to underpin growth. However, views diverged on the path ahead: several indicated further cuts would likely be appropriate if disinflation progresses as expected, whereas others judged easing should await clearer evidence that inflation is firmly returning to target. Meanwhile, several favoured two-sided guidance, noting upward adjustments could be appropriate if inflation remains above target. However, all agreed policy was not on a preset course and would be informed by a wide range of incoming data, the evolving economic outlook, and the balance of risks. Inflation was seen as markedly lower than its 2022 peak but still somewhat elevated, with core goods, including tariff effects, cited as key drivers, and risks of persistence viewed as meaningful. Labour market conditions were described as stabilising, with low layoffs but subdued hiring, and downside employment risks judged to have diminished, though not disappeared. On the US Dollar, the Minutes noted a marked Dollar depreciation ahead of the meeting after reports that the Desk had conducted “rate checks” on the USDJPY pair, signalling heightened market sensitivity to potential intervention. However, the Committee confirmed that no foreign currency operations were undertaken for the System’s account during the intermeeting period. The manager noted that quotes were requested solely on behalf of the US Treasury in the NY Fed’s role as the fiscal agent for the US. Durable Goods for December fell 1.4% M/M, but less than the expected -2%, against November’s rise of 5.4%. Ex-Defense fell 2.5% M/M (prev. +6.6%), while Ex-Transport rose 0.9% from 0.4%, more than the consensus of 0.3%, and also above the top end of the forecast range. The headline was down, as expected, but Oxford Economics notes the more important development was another upside surprise in core orders, which provides a clearer signal of future business spending and bolsters its forecast for solid equipment investment in 2026. OxEco adds that while orders are the more forward-looking measure, shipments are what count towards GDP, and these were relatively stronger. As such, the consultancy is to its nowcast of solid Q4 business equipment investment, but subject to change with Thursday’s trade data. Industrial Production rose 0.7% in January, above the 0.4% forecast and accelerating from the downwardly revised 0.2% December reading. Manufacturing production rose 0.6%, above the 0.4% forecast, and also accelerating from the downwardly revised flat print in the previous report. Capacity utilisation rose to 76.2% from 75.7% but fell short of the 76.5% forecast. Within the report, Oxford Economics note that “Extreme winter weather effects predictably lowered mining output but boosted utilities production. The upside surprise was concentrated in manufacturing. OxEco expect “manufacturing to continue growing this year thanks to the AI tailwind, which will benefit not only computers and electronics but also electrical equipment”. The desk also highlights that a fiscal boost, plus lower interest rates “will allow non-AI sectors to find their stride as well, and the potential for further tariff reductions is an upside risk for which to watch out.” Elsewhere, both Oil and Gold surged, closing higher by 4.65% and 2.35% respectively.
To mark my 3325th 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 120 points yesterday and is now ahead by 5082 points for February, after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 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 0.56% higher at a price of 6881.
The Dow Jones Industrial Average closed 129 points higher for a 0.26% gain at a price of 49,662.
The NASDAQ 100 closed 0.80% higher at a price of 24,898.
The Stoxx Europe 600 Index closed 1.19% higher.
Yesterday, the MSCI Asia Pacific closed 0.6% higher.
Yesterday, the Nikkei closed 1.02% higher at a price of 57,143.
Currencies
The Bloomberg Dollar Spot Index closed 0.54% higher.
The Euro closed 0.57% lower at $1.1784.
The British Pound closed 0.47% lower at $1.3500.
The Japanese Yen fell 1.03% closing at $154.84.
Bonds
U.K.’s 10-Year Gilt closed 1 basis points lower at 4.37%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 2.73%
U.S.10 Year Treasury closed 4 basis points higher at 4.08%.
Commodities
West Texas Intermediate crude closed 4.65% higher at $65.23 a barrel.
Gold closed 2.35% higher at $4992.10 an ounce.
This morning on the Economic Front we have Euro-Zone Economic Bulletin at 9.00 am and Construction Output at 10.00 am. This is followed by U.K. CBI Industrial Trends Orders at 11.00 am. Next, we have U.S. Weekly Jobless Claims, Philly Fed Manufacturing Index and the Trade Balance at 1.30 pm. At 3.00 pm we have Pending Home Sales and Euro -Zone Consumer Confidence. Finally, we have speeches from Fed Members Kashkari and Goolsbee at 2.00 pm and 3.30 pm respectively.
Cash S&P 500
Despite both European Indexes and the FTSE closing at new all-time highs, momentum again stalled for the S&P following a near 60 Handle sell-off after hitting an intra-day high at 6910. This move higher saw my 6898 sell level triggered before the market sold off to my 6875 revised T/P level and I am still flat. I wrote in detail about the underperformance of the S&P in Wednesday’s commentary which was good timing given yesterday’s late reversal. Today, I will again be a seller from 6915/6940 with a higher 6961 ‘Closing Stop’. My only interest in buying the S&P is on a further move lower to 6748/6773 with a lower 6729 ‘Closing Stop’. If I am taken short, I will have a T/P level at 6885. If I am taken long, I will have a T/P level at 6798. If any of these views change, I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat as the Euro finally tested and broke 1.1800 following Wednesday’s FOMC Minutes. Ahead of the weekend, I will now lower my buy level to 1.1650/1.1730 with a lower 1.1575 ‘Closing Stop’. I will also lower my sell level to 1.1900/1.1980 with a lower 1.2155 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1800. If I am taken short, I will have a T/P level at 1.1830.
Dollar Index
The Dollar never came close to yesterday’s buy range before ending Wednesday’s session with a gain of 0.5%. Today, I will raise my buy level to 96.40/97.20 with a higher 95.85 ‘Closing Stop’. If I am taken long, I will have a T/P level at 97.80.
Russell 2000
The Russell rallied to my 2685 sell level. I will continue to look to add to this position on any further move higher to 2745 while leaving my 2795 ‘Closing Stop’ unchanged. I will now raise my T/P level to 2645. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
Wrong! Much to my consternation the FTSE continues make new all-time highs, helped by Wednesday’s 1.2% rise. This move higher saw my second sell level at 10610 triggered for a 10565 average short position before stopping out of this position at 10675 and I am now flat. Given both the economic and political backdrop I am completely at a loss why the FTSE continues to make new all-time highs with no two-way price action as anyone shorting the market is forced to cover their positions. I will stay flat the FTSE until I feel I have a better edge in this market. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
I am still flat as the Dow never came close to either my buy/sell levels on Wednesday. The Dow has short-term support from 48850/49150 where I will continue to be a small buyer with the same 48595 ‘Closing Stop’. Meanwhile, I will continue to be a seller from 50150/50450 with the same 50705 ‘Closing Stop’. If I am taken long, I will have a T/P level at 49390. If I am taken short, I will have a T/P level at 49830. If this view changes I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NDX just fell shy of my initial 25150 sell level before falling 300 points and I am still flat. Today, I will leave my sell level unchanged from 25100/25300 with the same 25505 ‘Closing Stop’. If I am taken short, I will have a T/P level at 24940. The NDX has short-term support below from 24150/24350 where I will be a strong buyer with a 23995 ‘Closing Stop’. If I am taken long, I will have a T/P level at 24570.
December BUND
No Change: Since 2012. Investors in Japanese Government Bonds have lost roughly half their money in US Dollar terms. By any standard, this is a terrible outcome. While the Japanese Yen has recently bounced, over the past 12 months JGBs remain the only major bond market still delivering negative returns to investors. So far, higher yields have not so far been sufficient to lure investors back into JGBs. Moreover, the aggressive fiscal spending plans of the Takaichi Government are unlikely to generate much enthusiasm for Japanese Bonds. As a result, the path of least resistance for JGBs is likely higher. In turn, this raises a genuine quandary for other Sovereign Bond Markets. As seems likely, JGB Yields continue to creep higher, can US, German and UK Bond Yields fall meaningfully. This is the main reason why I cannot chase the Bund Yield lower. The Bund has short-term resistance from 129.70/130.50 where I will be a seller with a 131.25 ‘Closing Stop’. I no longer want to be a buyer of the Bund at this time.
Gold Rolling Contract
Gold reversed all of Tuesday’s losses yesterday and I am still flat. I still do not trust the price action in Gold as I prefer to wait for a sell-off before initiating a long position. Today, I will leave my 4700/4780 buy level unchanged with the same 4595 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4895. If this view changes I will be back with a new update for my Platinum Members.
Silver Rolling Contract
No Change: I am still flat. Silver has short-term support from 67.10/71.50 where I will continue to be a buyer with the same 64.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 74.10
Please Note: There will be no Daily Commentary tomorrow. Any of my calls that are not triggered today and are subsequently executed on Friday will see me return with updated emails for my Platinum Members.
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