Yesterday was one of the busiest trading sessions in many months, packed full of data that led to some large intraday moves. ADP payrolls (better than expected) and the Non-manufacturing ISM (worse than expected) gave contrasting reads on the labour market, while the FOMC Minutes confirmed that a change to the reinvestment policy was likely later this year. Equities initially rose then fell along with US Treasury yields, while the US Dollar was broadly unchanged. On the FOMC Minutes, the US Treasury market focused in on the balance sheet comments with yields down 2.5 bps to 2.34%. The Fed said it was considering ending or slowing reinvestment of Treasuries and mortgages ‘later this year’ and there was no suggestion of actively selling assets. These comments were seemingly interpreted as implying less need for Fed rate hikes given a phasing down of the reinvestment policy could act as a defacto tightening, while the path of tightening could also be delayed as the Fed would want to assess the impact of the phasing down on the market (also conveyed by the Fed’s Dudley last week).

To mark my 1300th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1/4 updated emails throughout the trading day. This offer is open to both new and existing members and if anyone is interested can you please contact me on for details.

For anyone following my Platinum Service it made 183 points yesterday and is now ahead by 294 points for April, having made 1335 points in March, 1481 in February and 1734 in January. The previous seven months saw gains of 1351, 1971, 1582, 1142, 1782, 1682 and 2550 points respectively. Since I started this Platinum Service in June 2015 it has averaged a monthly gain of over 1750 points.

For me, comments on the uncertainty over the inflation outlook are also worth noting. “Several” participants noted inflation had not picked up despite a strengthening in the labour market, while “Other[s]” were concerned that if the labour market ran above its full-employment level then it “posed a significant upside risk to inflation”. How these camps interpret the improving labour market will thus be key for Interest Rates. The OIS market currently prices a 55% chance of a June hike, while 1.4 rate hikes are priced in for the rest of this year.

ADP Payrolls again shot the lights out, up 264k against expectations of a 185k rise. The correlation with Friday’s official Non-farm Payrolls has improved over the past year (see Chart) and is suggestive of upside risk. One caveat to this is a snowstorm in the northeast of the US in the week that Payrolls were surveyed, so it is possible official Payrolls are affected. The Atlanta Fed’s jobs calculator suggests it only takes 120k payrolls a month to keep the Unemployment Rate steady and anything north of this will still be viewed positively by the Fed.

The Non-Manufacturing ISM disappointed falling to 55.2, below the consensus of a rise to 57.0. Under the hood, the Employment Sub-Index was weak and registered a seven-month low of 51.6. At first glance that could be suggestive of payrolls growth slowing in the coming months. However, seasonal adjustment issues around Easter could have impacted. The commentary was also less positive with some noting gridlock in Washington over healthcare reform. Speaker of the House Paul Ryan seemingly reinforced this point late yesterday stating tax reform could take longer than health (which isn’t resolved yet).

In FX, Sterling was the clear outperformer up 0.4% to 1.2481 and within a hairs breadth of punching through 1.25. A better than expected Services PMI contributed with the PMI rising to 55 against expectations of 53.4. The US Dollar was broadly unchanged, while the Euro fell (-0.1%), and the Aussie rose (+0.1%). Comments by ECB governing council member Weidmann are worth noting ahead of today’s ECB Minutes even if they did not have a lasting impact on markets (German Bund yields ended the day up 0.1 bps to 0.26%). Weidmann advocated for tapering in the next year “not have the foot pressed down on the gas pedal, but to lift it slightly” and a full stop to purchases within a year.

Equity markets were lower on the day, with the S&P500 down 0.3% on the day (Eurostoxx also down by 0.3%), after trading much higher earlier in the afternoon.

This morning on the economic front we already had the release of German Factory Orders which came in lower than the consensus of a 4% rise with a +3.4% print. At 12.30 we have the ECB Minutes from the last Policy Meeting. The ECB Minutes will be closely watched for any discussion of tapering or of increasing the deposit rate. Yesterday Weidmann advocated for tapering and then a full stop to purchases within a year. However just as I am finishing this commentary ECB President Dragi has been speaking and he said ‘’reassessment of monetary policy stance is not warranted’’ which is now driving the Euro lower. At 1.30 pm we have the US Weekly Jobless Claims. Finally at 2.45 pm we have the Bloomberg Consumer Comfort Index.

Later this evening we have the US President Xi-Trump meeting, it is uncertain what outcomes will result. Geopolitically, it is encouraging they are meeting in the first place and if Trump’s weekend FT interview is to go by it could be more conciliatory then Trump’s recent rhetoric: “I would not at all be surprised if we did something that would be very dramatic and good for both countries and I hope so.” and “I don’t want to talk about tariffs yet, perhaps the next time we meet.” North Korea is likely to get a mention – especially after yesterday’s missile test.

June S&P 500

Yesterday was one of the wildest trading sessions since before Trump got elected last November with incredibly the S&P having hit my 2373 sell level with a 2375.50 print, subsequently fell 30 Handles to my 2348 buy level after a dramatic last 90 minutes of trading. As I was already short the Dow I waited to sell the S&P at the top of my sell range at 2373 before the market trading to an initial low at 2365 before rallying ahead of the FOMC Minutes. As is the norm, I wanted to be flat ahead of this release and I covered this short position at 2368.75. Just before the close the S&P hit my 2348 buy level before rallying to my 2353 T/P level and I am now flat. The S&P is again on the defensive this morning with key support not coming in until 2328/2334. I will be a buyer in this area with a 2323 stop. If I am taken long and subsequently stopped out of this position I will be a more aggressive buyer on any further dip to 2312/2318 with a 2307 support. The S&P should rally on any test of my second support especially with the NFP data due tomorrow. For these reasons I do not want to be short the S&P at this time.


My Euro plan worked well with the market initially hitting my 1.0655 buy level before rallying. Again as I wanted to be flat ahead of the Fed Minutes I covered this position at my revised 1.0670 T/P level. Subsequently I emailed my Platinum Members to re-buy the Euro at 1.0635 with a 1.0650 T/P level which was also filled and I am now flat. This morning on the back of Dragi’s comments the Euro is trading lower as it tests its three month uptrend . Today I will again look to buy the Euro on any dip lower to 1.0590/1.0620 with a 1.0560 stop. Given the importance of this support area I still do not want to be short the Euro at this time.

June Dollar Index

My Dollar plan worked well with the Dollar trading higher to my 100.85 sell level with a 101.00 high print before selling off to my revised 100.65 T/P level and I am now flat. Today I will again look to sell the Dollar on any rally higher to 100.90/101.20 with a 101.50 stop.

June DAX

It took a while but finally the DAX hit my 12150 buy level. This morning in an unprecedented seventh updated email to my Platinum Members to exit this position at 12180 and I am now flat. Subsequently the DAX is trading lower as it looks to test the next key support from 12045/12095. I will be a buyer in this area with a 11995 stop. Despite Monday’s Downside Key Day Reversal I do not want to be short the DAX at these levels especially ahead of the ECB Minutes later this afternoon.


Overnight the FTSE traded lower to my 7215 average buy level with a so far 7191 low print which is just ahead of the key 7180 support level as mentioned in my Daily Commentary over the past two days. I have now lowered my T/P level on this position to 7235. I will have a stop at 7175 on this position. Remember a break and close below 7180is a sell signal opening up a move lower to 7040 over the coming days.

Dow Rolling Contract

What a day for the Dow which spiked higher on the open to my 20815 average sell level before thankfully stopping two points short of my 20900 stop. As I wanted to be flat ahead of the Fed Minutes I covered this position for a small loss at 20825 and I am still flat. The Dow has strong support from 20470/20530 and I will be a buyer in this area with a 20405 stop which is just below the recent 20412 low print. I do not want to be short the Dow ahead of Trump this evening and the NFP data tomorrow.


Of my nine markets covered each day the Bund was the only call from yesterday not to get hit and I am still flat. Today I will lower my sell level slightly to 162.80/163.10 with a 163.35 stop. I will leave my buy level unchanged from 161.55/161.85 with the same 161.35 stop.

Gold Rolling Contract

My Gold plan worked well with the market trading lower to my 1248 buy level before eventually bouncing to a overnight high at 1258. As I am still long Silver I covered my long Gold position ahead of the Fed Minutes at 1250 and I am still flat. Today I will again look to buy Gold on any dip lower to 1238/1245 with a 1233 stop.

Silver Rolling Contract

No change as I am still long at 18.30 with the same 17.75 stop and 18.60 T/P level.