U.S. Indexes closed mixed on Wednesday, with the tech-heavy NASDAQ 100 underperforming, while sectors saw an upward bias; Industrials, Technology, Financials, and Energy were in the red, with Health outperforming and buoyed by Moderna surging in excess of 165% after a cancer breakthrough drug trial with Merck. Nonetheless, the main story on Wednesday was the US Treasury announcing it is increasing, by at least double, the size of liquidity support buyback operations for longer-dated nominal coupon securities, from the current USD 2 billion to at least USD 4 billion. Following this update, US Treasury yields fell, particularly in the long end, while the Dollar saw notable pressure. Given this, all G10 FX peers gained versus the Greenback, with the Swiss Franc outperforming. WTI and Brent eked out slight strength as a US/Iran deal seems no closer, although geopolitical newsflow was light on Wednesday. There was no US data or Fed speak, and the latest FOMC Minutes were largely as expected with few shocks (review below). Precious metals surged on the aforementioned news, while crypto saw a rally through the US session. The FOMC Minutes were largely as expected, as they noted that most participants at the July confab supported keeping interest rates unchanged, while several favoured an increase, as we know due to the three hawkish dissenters. Within those dissenters, a few participants judged doing so would likely help forestall the need for further hikes. Most participants assessed higher rates would likely be necessary if inflation did not fall, but that is a pretty consensus view given recent rhetoric and the importance the Committee have stressed of getting inflation back to target. Almost all FOMC members agreed it was appropriate to retain the policy statement affirming FOMC ‘will deliver price stability’, but no caveat was issued into what the others saw or the reasoning. Fed staff economic outlook showed inflation outlook was similar to one prepared for June meeting, but economic outlook was ‘a touch weaker’. On the meeting schedule, Chairman Warsh said six scheduled meetings per year, held roughly every two months, would allow more information to accumulate between meetings, but no decision was made and Warsh indicated no change to the 2026 schedule. All in all, the latest Minutes were dwarfed by recent data, which has no doubt been dovish and shifted money market pricing to favour a hold instead of a hike. One of the unknowns remains the US/Iran war. Nonetheless, Pantheon Macroeconomics notes, as things stand, it is unlikely any other FOMC members will be joining the three hawks, and they continue to think that a majority of members will vote to keep policy unchanged through the fall and winter, as the labour market stays weak and domestically-generated inflation continues to cool. Elsewhere, Gold surged, ending Wednesday’s session with a 3.64% gain while Oil was flat.
To mark my 3425th 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 25 points yesterday and is now ahead by 1885 points for August after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points 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 previous 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 0.21% higher at a price of 7707.
The Dow Jones Industrial Average closed 119 points higher for a 0.22% gain at a price of 53,463.
The NASDAQ 100 closed 0.22% lower at a price of 29,426.
The Stoxx Europe 600 Index closed 0.03% lower.
This Morning, the MSCI Asia Pacific closed 0.6% higher.
This Morning, the Nikkei closed 1.36% higher at 66,216.
Currencies
The Bloomberg Dollar Spot Index closed 0.83% lower.
The Euro closed 0.82% higher at $1.1671.
The British Pound closed 0.54% higher at $1.3606.
The Japanese Yen rose 0.81% closing at $158.30.
Bonds
U.K.’s 10-Year Gilt closed 4 basis points lower at 5.05%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 3.25%
U.S.10 Year Treasury closed 4 basis points lower at 4.66%.
Commodities
West Texas Intermediate crude closed 0.12% higher at $84.24 a barrel.
Gold closed 3.64% higher at $4492.10 an ounce.
This morning on the Economic front we already had the release of German PPI which rose 1.1% versus +0.5% expected. At 10.00 am we have Euro-Zone Construction Output. Next, we have U.S. Weekly Jobless Claims and the Philly Fed Manufacturing Index at 1.30 pm. Finally, we have U.S. Leading Index at 3.00 pm.
Cash S&P 500
Interest Rates fell sharply on the day after the Treasury said it would double the size of its bond purchases to $4 billion from $2 billion for 10-, 20-, and 30-year Treasuries. The bond purchases send a pretty clear signal that things in the off-the-run market were very illiquid and that we were likely seeing bid-ask spreads widen. Off-the-run Treasuries are anything that is not the most current issue, and they tend to have lower liquidity and trading volume to start with. It could be due to the absence of buyers for those issues; it is hard for me to say. But clearly, for the Treasury to do this just two weeks after the quarterly refunding announcement would suggest to me that something changed materially over that time, and the sell-off in the rates may be a bit of a liquidity issue. Is the sell-off in bonds over? Probably not. Could the 30-year yield fall to 5.1% in the interim? Sure. It is also not QE in any way, shape, or form. The Treasury will have to issue debt at the front of the curve to finance the purchases on the back of the curve. The US Dollar did not respond well to Wednesday’s news, and the KRW was already stronger on the day. Following the news, that strength only grew, with the USD/KRW dropping by 1.7% on the day. It is clearly oversold, trading below its lower Bollinger Band and with an RSI below 30. So I would think it either bounces back to the 20-day moving average or consolidates sideways. This is probably not good for either the KOSPI or the AI trade in general. A tremendous amount of money from Korea has been put into the market since the April 2025 sell-off, and the stronger KRW is likely a reflection of outflows from US-Dollar assets back into Korea. The S&P 500 was largely supported by options positioning yesterday, which was really no different from Tuesday. The same can be said of the SMH, with the ‘Put Wall’ at $560 holding. But the issue for the SMH is all the open call positions at higher prices, particularly around $600, that will start to melt if the SMH can’t begin to climb. Once the put wall at $560 is chewed up, we could see the SMH decline much more sharply, especially if the strong won reflects Korean liquidity leaving U.S. markets. Finally, credit spreads continued to widen for Broadcom and Nvidia. When combined with the whole KRW situation, it just continues to suggest to me that the semis are vulnerable to a steeper pullback. I am still flat the S&P as the market never cam close to my buy/sell ranges. Today, I will lower my sell level to 7760/7785 with a lower 7811 ‘Closing Stop’. I will also raise my buy level to 7635/7660 with a higher 7614 ‘Closing Stop’. If I am taken short, I will have a T/P level at 7738. If I am taken long, I will have a T/P level at 7686.
EUR/USD
The Euro exploded to the upside following the surprise Treasury Announcement. This move higher sees the Euro trading at a three-month high at 1.1680 this morning. The 14-Day RSI is overbought, closing at 73 last night. Today, I will be a small seller from 1.1720/1.1790 with a 1.1865 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1650. I no longer want to be a buyer of the Euro at this time.
Dollar Index
Wrong! Wednesday’s 1% sell-off in the Dollar saw my 99.35 stop triggered on my 100.45 average long position and I am now flat. The Dollar has short-term support from 97.80/98.60 where I will be an aggressive buyer with a 96.95 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 99.30.
Russell 2000
Wednesday’s early sell-off saw my 3015 T/P level triggered on my latest 3020 average short position and I am now flat. This morning, the Russell is trading at a price of 3038. The Russell has short-term resistance from 3060/3130 where I will be an aggressive seller with a higher 3205 ‘Closing Stop’. If I am taken short, I will have a T/P level at 3005.
FTSE 100
I am still flat as the FTSE traded in a narrow range over the past 24 hours. The FTSE has short-term support from 10580/10660 where I will continue to be a strong buyer with the same 10505 ‘Closing Stop’. If I am taken long, I will have a T/P level at 10730.
Dow Rolling Contract
I am still flat. I will not chase the Dow lower as I continue to be a seller on any further rally to 53900/54200 with the same 54505 ‘Closing Stop’. If I am taken short, I will have a T/P level at 53620. I still do not want to be a buyer of the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Despite the aggressive move to support long-term rates by the U.S. Treasury the NDX reversed earlier gains on Wednesday to close lower. The NDX has short-term support from 29050/29250. I will raise my buy level to this area with a higher 28895 ‘Closing Stop’. If I am taken long, I will have a T/P level at 29430.
December BUND
I am still long the Bund from Tuesday at a price of 123.70 with the same 124.30 T/P level. I will add to this position on any further move lower to 122.90 while leaving my 122.15 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold exploded on Wednesday and I am still flat. Today, I will raise my buy level to 4300/4380 with a higher 4225 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4450. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
The weaker Dollar led to a 4% rally in Silver on Wednesday. This move higher saw my 65.60 T/P level triggered on my latest 64.30 long position and I am now flat. This morning, Silver is trading higher at 66.50 having hit an overnight high of 67.35. Today, I will be a small buyer from 62.00/65.00 with a higher 60.35 ‘Closing Stop’. If I am taken long, I will have a T/P level at 66.80.
Recent Comments