Fundamental View
Given the strength of the NFP data on Friday the move lower in Treasury Yields on Monday was a surprise, even taking into account the slightly dovish tone from the Fed. The move higher in bond prices was lead initially by the bund which moved from 152.59 to 153.82, a move of over 100 ticks as global equities pulled lower. This dragged T-Notes higher through our entry short at 126.025 and stopped short just before our stop was hit, returning to the entry price heading into the close. The Pivot level on the S&P yesterday worked well to cap the upside and this morning European equities are trending lower on the back of uncertainty over Greece and the potential for the left wing Syriza party to win a national election next year.
Today’s View
This morning has been quiet on the data front, apart from a disappointing read on UK manufacturing. There are a few moves of note however. Oil has been supported by murmurings in the market that an emergency meeting may be held by OPEC in quarter one next year. This is a very different slant to prices to the nonchalance to sub $60 a barrel we have seen over the last two weeks. The fact is, many oil exporting nations cannot cope with such low prices and at the same time, they cannot cut government spending already committed to, so they will either have to borrow more, or get prices higher. For today’s strategy we will be short every asset apart from oil. This afternoon the only data of importance is US wholesale inventories at 15:00.
Alternative View
As I type US debt continues to be supported and further dovish commentary out of the FED would render our short strategies invalid.
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Editors’ Picks
EUR/USD declines below 1.0700 as USD recovery continues
EUR/USD lost its traction and declined below 1.0700 after spending the first half of the day in a tight channel. The US Dollar extends its recovery following the strong Unit Labor Costs data and weighs on the pair ahead of Friday's jobs report.
GBP/USD struggles to hold above 1.2500
GBP/USD turned south and dropped below 1.2500 in the American session on Thursday. The US Dollar continues to push higher following the Fed-inspired decline on Wednesday and doesn't allow the pair to regain its traction.
Gold slumps below $2,300 as US yields rebound
Gold extended its daily slide and dropped below $2,290 in the second half of the day on Thursday. The benchmark 10-year US Treasury bond yield erased its daily losses after US data, causing XAU/USD to stretch lower ahead of Friday's US jobs data.
Top 3 Price Prediction BTC, ETH, XRP: Altcoins to pump once BTC bottoms out, slow grind up for now
Bitcoin reclaiming above $59,200 would hint that BTC has already bottomed out, setting the tone for a run north. Ethereum holding above $2,900 keeps a bullish reversal pattern viable despite falling momentum. Ripple coils up for a move north as XRP bulls defend $0.5000.
Happy Apple day
Apple is due to report Q1 results today after the bell. Expectations are soft given that Apple’s Chinese business got a major hit in Q1 as competitors increased their market share against the giant Apple.