At last week’s Central Bank Summit, Fed Chair Powell said that while rates are in restrictive territory now, the downside risk of doing too little (not raising rates or keeping them high) is still greater than doing too much (raising rates to a level that is detrimental), even if that balance is inching toward equilibrium. This is one of the more sobering comments of the day as Powell says core inflation is a long way from returning to 2% and is likely not going to occur until 2025. Powell’s comment here may get swept under the rug from many, but to me this is a clear indication that investors should expect elevated rates for an extended time. Those two decades saw the highest average rates and more proactive policy than any other time since 1950. A surprise quote struck me the most from ECB President Lagarde because it shows a stark contrast to how the ECB is viewing a digital currency compared with the Fed. The ECB is actively further along in the planning process and has admitted that it already has a legislative framework to begin building off of. Meanwhile, the Fed has acknowledged the inquiry into a digital dollar but admitted that an act of Congress would be a prerequisite to its adoption. As the annual symposium concludes for 2023, it is clear that the global outlook and perspective on rate policy is changing. As this shift evolves, investors should closely monitor these central banks’ actions and statements in order to understand potential implications on the financial markets. Bank of Japan Governor Ueda highlighted that underlying inflation in Japan remains below 2%, but the BOJ is prepared to shift policy if signs of increased inflation emerge, potentially even within this year. This readiness to adapt demonstrates the massive shift in the BOJ’s stance in managing monetary policy, which has not seen significantly restrictive policy in roughly three decades. European Markets closed mixed while in Asia, the Nikkei closed 0.25% lower this morning. Elsewhere, both Oil and Gold were flat.
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 was flat yesterday and is still ahead by 45 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 0.12% higher at a price of 4455.
The Dow Jones Industrial Average closed 10 points higher for a 0.03% gain at a price of 34,418.
The NASDAQ 100 closed 0.19% higher at a price of 15,208.
The Stoxx Europe 600 Index closed 0.06% lower.
This morning, the MSCI Asia Pacific closed 0.3% lower.
This morning, the Nikkei closed 0.25% lower at a price of 33,338.
Currencies
The Bloomberg Dollar Spot Index closed 0.20% higher.
The Euro closed 0.3% lower at $1.0871.
The British Pound closed 0.3% higher at 1.2705.
The Japanese Yen fell 0.1% closing at $144.71.
Bonds
Germany’s 10-year yield closed 2 basis points higher at 2.46%.
Britain’s 10-year yield closed 2 basis points lower at 4.42%.
U.S.10 Year Treasury closed 2 basis points higher at 3.85%.
Commodities
West Texas Intermediate crude closed 0.1% lower at $70.81 a barrel.
Gold closed 0.1% lower at $1924.10 an ounce.
This morning on the Economic Front we have a speech from Bundesbank President Nagel at 8.00 am. Next, we have U.K. Composite PMI at 9.30 am and Euro-Zone Industrial Production at 10.00 am. This is followed by U.S. MBA Mortgage Applications. At 12.00 pm. Finally, we have the FOMC Minutes from last Month’s meeting at 7.00 pm and a speech from Fed Member Williams at 9.00 pm.
Cash S&P 500
No Change. I am still flat the S&P as the market traded in a narrow range. This is no surprise with most investors taking the week off for the July 4th Holiday. I have written enough as to why I believe the market is overvalued but I am also conscious that any sell-off will be short-lived given the July positive seasonality. The S&P Has resistance from 4462/4480 where I will continue to be a seller with a 4491 ‘’Closing Stop’’. We have support from 4410/4425 where I will be a small buyer with a 4399 ‘’Closing Stop’’.
EUR/USD
No Change. I am still long at 1.0900 with a now lower 109.40 T/P level. I will continue to look to add to this position at 1.0830 while leaving my 1.0785 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
June Dollar Index
The Dollar is trading higher at 103.20 this morning. I will now raise my buy level to 102.20/102.80 with a higher 101.60 ‘’Closing Stop’’. If triggered, I will have a T/P level at 103.20.
Cash DAX
The DAX is trading 100 points lower from where I marked prices 24 hours ago. We have short-term support from 15730/15830. I will be a small buyer on any further dip to this area with a 15625 ‘’Closing Stop’’.
Cash FTSE
I am still flat the FTSE as the market again traded in a narrow range. I will now lower my buy level to 7400/7460 with a lower same 7355 ‘’Closing Stop’’.
Dow Rolling Contract
I am still flat. I will not chase the Dow higher, leaving my 33950/34200 buy level unchanged with the same 33795 ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
I am still short from Monday at 15230. I will continue to look to add to this position at 15370 with the same 15505 ‘’Closing Stop’’. Meanwhile, I will raise my T/P to 15125. If this view changes I will be back with a new update for my Platinum Members.
September BUND
The Bund traded in a narrow range yesterday. I am still long at 133.20 with the same 133.70 T/P level. I will add to this position at 132.50. I will leave my 131.95 ‘’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
I am still a small buyer on any dip lower to 1897/1912 with a higher 1885 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. Thankfully, we are now back above $23. I am still long at an average rate of 23.63 with the same no stop. I will now lower my T/P level to 24.20. If this changes I will be back with a new update for my Platinum Members.
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