Highlights:

Market Recap: Markets dropped significantly yesterday as the Chinese Yuan weakened against the U.S. dollar. Although many believe China devalued their currency, they actually stopped propping it up yesterday. That is a major deflationary pulse and it was felt across asset classes. The S&P 500 was down -3.01% on the day.  Oil was down -1.74%. U.S. 10 Year-Treasury note yields dropped 11 basis points, finishing the day at 1.75%. 

Market Recap

 

Economic Data: While markets were largely focused on trade and currency wars, the U.S. ISM Non-Manufacturing Index dropped to new lows, declining to 53.70. Despite the noise, growth has been slowing since the fourth quarter of 2018 and that affects markets.

Economic Data

 

Volatility: The VIX rallied nearly 40% yesterday.  This is after a rally of over 40% last week.  The VIX has broken above the May highs which may imply that the S&P 500 could challenge or break below the lows it set in June.

Volatility

 

U.S. 10-Year Yields: 10-year yields broke to new lows and have accelerated downward.  Yields are way below their 200-day moving average.  How low will they go?  We think over the course of the next year, a lot lower.

U.S. 10-Year Yields

 

Emerging Markets: Emerging markets crashed through their 200-day moving average (EEM).  Emerging markets failed to confirm the S&P 500 as it broke to new all-time highs.  Now, emerging markets are close to testing the 2018 lows. 

Emerging Markets

 

Chart of the Day: The U.S. Dollar rallied to new highs relative to the Chinese Yuan, as China failed to prop up their currency yesterday.  If China were to fail to stabilize their currency, it could drop 30-40% according to hedge fund manager Kyle Bass.  The implications of this are deflationary for the U.S.

fxsoriginal

 

Source: Raoul Pal

Futures Summary: 

FutureSummary

 

News from Bloomberg:

China moved to stabilize the yuan, bringing some relief to markets in the wake of yesterday's rout, which deepened after the Treasury Department labeled Beijing a currency manipulator. China's central bank set the daily currency fixing stronger than expected and announced a sale of yuan-denominated bonds in Hong Kong, while denying the U.S. accusation. Read this QuickTake on why the U.S. officially took the step.

North Korea fired more missiles and renewed its threat to follow a "new road" after the U.S. and South Korea began joint military drills yesterday. The Foreign Ministry said the two countries would pay a "heavy price" if they continued the exercises, which it called a "flagrant violation" of last year's pact between Kim Jong Un and President Trump.

The U.S. further sanctioned Venezuela, freezing assets and curbing immigration to increase pressure on Nicolas Maduro's regime. The steps put the country on the same footing as North Korea and Iran. National Security Adviser John Bolton speaks in Lima today at a conference of nations that see Juan Guaido as the rightful leader.

China urged Hong Kong citizens to stand up to protesters after a general strike that led to a day of traffic chaos, mob violence, tear gas and canceled flights. Beijing reiterated support for city chief Carrie Lam, defended police action and said those who play with fire will perish by it. Check out our live blog of the press event and take a look at the triad gangs linked to the protester attacks.

Bill Ackman sold his stake in United Technologies, abandoning efforts to fight its takeover of Raytheon, a person familiar said. Pershing Square also liquidated its position in payroll processor ADP, the last company where he waged a proxy fight, he told co-investors in a letter. The investment returned about 50% for those involved. He's also built a stake in another unidentified company.

WealthShield is a division of Emerald Investment Partners, an SEC Registered Investment Advisor. Advisory services are only offered to clients or prospective clients where WealthShield and it’s representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by WealthShield unless a client service agreement is in place. Before investing, consider your investment objectives and WealthShield’s charges and expenses.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD: bears pressuring, 1.0980 critical support

Risk aversion took over the FX board on Friday, weighing on high-yielding assets. The EUR/USD pair, finished the week just a handful of pips above the 1.1000 figure amid mounting tensions between the US and China.

EUR/USD News

GBP/USD: at risk of losing more ground in the short-term

The GBP/USD pair advanced up to 1.2581, it highest in over two months, but was unable to sustain gains, ending the week around 1.2470. Cable could keep losing ground on a break below 1.2460, the immediate support.

GBP/USD News

USD/JPY: at a bring of breaking lower

Fresh risk-off flows resulted in the USD/JPY pair trimming weekly gains on Friday, ending the week at 107.55. The pair barely holding above a critical Fibonacci support at 107.45. Japan’s National inflation steady at lows in August.

USD/JPY News

Top 3 price prediction Bitcoin, Ripple, Ethereum: Ethereum points to the Moon as Bitcoin takes a break

ETH/USD exceeds $220 and is bidding to lead the market. Bitcoin sets a bear trap and recaptures $10,000. XRP stalls between technical levels and fails to consolidate $0.30.

Read more

Gold climbs further beyond $1500 mark, lacks follow-through

Gold edged higher for the second consecutive session on Friday, albeit remained well within a familiar trading range held over the past two weeks or so.

Gold News

Forex Majors

Cryptocurrencies

Signatures