European Union leaders last night broke a three-day summit deadlock by unexpectedly nominating Germany’s defence minister as the next European Commission president. Ursula von der Leyen, a centre-right minister and the first woman in Germany to serve in the defence post, will be joined in the “top jobs” package by Christine Lagarde, who will head the European Central Bank. European Council president Donald Tusk, who brokered the deal between the national leaders on the council, will be replaced by Belgium’s acting prime minister, the liberal Charles Michel.
U.S. Equities edged higher to a fresh record, while haven assets from Treasuries to Gold resumed rallies as investors awaited a slew of economic data around the Fourth of July holiday. The Euro erased gains after Christine Lagarde was nominated to lead the European Central Bank. The S&P 500 swung between gains and losses before rising into the close for a second straight all-time high. The 10-year Treasury yield slumped to 1.98% and Gold surged back above $1,425 an ounce. Demand for riskier assets ebbed after a Federal Reserve official said she is not ready to support a rate cut and news broke that House Democrats are stepping up their investigation into the president’s taxes. U.S. markets close early today and are shut Thursday for the Fourth of July holiday. Data on private hiring, factory orders and the services sector are due Wednesday, with June’s Government Jobs Report coming the final day of the week. The Japanese Yen rose and crude plunged more than 4% in New York.
To mark my 1850th 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 made 72 points yesterday and is now ahead by 212 points for July, having made 1346 points in June,1722 points in May, 955 points in April, 1027 points in March, 1013 points in February and 1671 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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Equities
Everything’s two-fold oriented: what’s the Fed going to do in July with interest rates and then everything geopolitical is basically an everyday headline. Every time the market stalls, anxiety skyrockets and goes through the roof. There is just a lot of fear out there. Yet this ‘’Fear’’ is not reflected in the VIX which fell 8% for the second consecutive session to close at 12.93, which is near the lows for the year. The S&P 500 Index rose 0.3% to close at a new all-time high at 2973. The Nasdaq 100 Index added 0.4% and the Dow Jones Industrial Average gained 0.3%. The Stoxx Europe 600 Index extended a modest advance while U.K. shares climbed to the highest in nine months.
Currencies
Here is a summary of the main changes in F.X. Markets:
The Euro was flat at $1.1284.
The Japanese yen strengthened 0.5% to 107.887 per dollar, the biggest increase in more than a week.
The Australian dollar advanced 0.4% to 0.699 per dollar, the largest rise in more than a week. This move higher came despite the RBA cutting Interest Rates by 0.25% to 1.00%
Bonds
U.S. Notes nudged up with most government bonds in Europe, where the yield on two-year Italian debt briefly dipped below zero. The yield on 10-year Treasuries declined four basis points to 1.98%. The two-year rate lost three basis points to 1.75%, Germany’s 10-year yield fell one basis point to -0.367%, while U.K. gilts rallied as construction data disappointed.
Commodities
Gold futures gained 1.5% to $1,409.30 an ounce at the close in New York last night. This morning Gold has rallied another 1% to sit at %1425 in London as I go to press. Meanwhile, West Texas Intermediate crude fell 3.4% to $57.12 a barrel.
This morning on the Economic Front we have German, Euro and UK Markit Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. At 12.00 pm we have US MBA Mortgage Applications and this is followed at 1.30 pm by the Trade Balance and the Weekly Jobless Claims. Next we have US Markit PMI at 2.45 pm, followed by Factory Orders and ISM Non-Manufacturing PMI at 3.00 pm. Remember the US Cash Equity Markets close at 6.00 pm and the Futures Markets at 9.15 pm this evening.
September S&P 500
Frustratingly the S&P again just missed my 2957 buy level before rallying to close at a new all-time high of 2978 as this relentless 10- year bull market accelerates higher. This market will go more un-balanced the higher we rise especially after we trade into my 3020/3070 target area. Despite the fact the US Markets are on a half-day today and closed all-day tomorrow, they will re-open on Friday, where we will have the Non-farm Payrolls. Today I will raise my S&P buy level to 2950/2960 with a 2942 stop. My only interest in selling the market is from 2995/3005 with a 3013 stop.
EUR/USD
Shortly after I posted the Euro rallied to a high of 1.1322 which enabled me to cover my 1.1285 long position at my 1.1300 T/P level and I am now flat. The Euro has strong support from 1.1210/1.1250 and I will be a buyer on any dip to this area with a 1.1170 stop.
September Dollar Index
No Change as I am still a small buyer from 95.50/95.90 with the same 95.25 tight stop.
September DAX
The DAX just missed my 12460 buy level by 10 points before rallying into the close and I am still flat. Today I will lower my buy level slightly to 12380/12440 with a lower 12325 stop. As long as the key 12400 level is not broken I will abstain from selling the DAX.
September FTSE
After the FTSE traded higher to my 7480 sell level, I emailed my Platinum Members to exit this position at my revised 7465 T/P level and I am now flat. This morning the FTSE is trading at nine-month highs at 7520 in the September Contract and at 7585 in the Cash FTSE. This move higher is helped by the fact that the Pound cannot rally with Cable trading at new lows for the year at 1.2560 this morning. The FTSE has resistance from 7550/7590 and today I will be a seller in this area with a 7625 stop.
Dow Rolling Contract
The Dow also just missed my 25600 buy level before rallying in to the close. We still have this negative divergence with the S&P and this will continue until we break the October 2018, all-time high of 26951. Today I will leave my 26450/26600 buy level unchanged with the same 26380 stop.
September NASDAQ
No Change as I am still a seller from 7870/7920 with a 7965 stop.
September BUND
I was lucky yesterday as shortly after I posted the Bund traded lower to my 172.98 buy level before making new all-time highs into the close. I emailed my Platinum Members to sell the Bund again from 173.60/174.00 and this morning the Bund opened in the middle of this sell range. I am now short in small size at 173.80 with a 174.25 stop. I will also raise my T/P level on this position to 173.55.
Gold Rolling Contract
Unfortunately Gold just missed my 1378 buy level with a 1383 low print before reversing all of this week’s sell-off to trade to an overnight high of 1438. Technically the re-test of the 1380 level this week is perfect for a breakout to the upside especially if we can close over 1450. Today I will raise my buy level to 1400/1410 with a 1391 stop.
Silver Rolling Contract
My Silver plan worked well with the market trading lower to my 15.05 buy level before rallying to my 15.25 T/P level. Silver continues to underperform Gold and today I will now look to buy the market from 14.95/15.25 with a 14.65 stop.
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