Bill Baruch, president and founder of Blue Line Futures, previews E-mini S&P, Gold, Crude, and Treasury markets and today’s economic report calendar. Follow his reports Monday-Friday on MoneyShow.com and short Midday Markets video.
Bill Baruch’s Midday Market Minute short video for Sept. 5 here.
Stocks, including tech and S&P 500, continue to retreat. Is it time to buy?
Euro (September)
Session close: Settled at 1.15905, down 18.5 ticks.
Fundamentals: Economic data out of Europe over the last 36 hours has been generally soft. On Monday, Manufacturing PMI out of Germany, France and Italy all missed though Spain beat, and the overall Eurozone read matched expectations.
With the U.S markets closed for Labor Day, Monday was quiet, but the euro fell out of bed around 1 am EDT. Driving the euro more than anything was a drop in Italian yields after the coalition government promised to respect EU deficit rules. Ultimately, this attracted buyers to prices and those buyers came from the U.S.
With U.S yields then rising upon fewer buyers (on prices), the U.S. dollar firmed up. Adding further strength to the dollar Tuesday morning was a blowout ISM Manufacturing read.
However, such a big number did cause a capitulation of sentiment as buyers rushed to the dollar and sellers rushed to the euro; the low in the euro was then in for the session.
Technicals: Weakness in the euro truly began to develop technically in the latter half of last week. Major three-star resistance at ...
Economic calendar
Tomorrow, we look to regional Services PMI data early before the Eurozone read at 4:00 am EDT along with Retail Sales at 5:00 am.
ECB official Praet speaks at 5:30 am EDT.
This is a big week of data from the U.S with Friday bringing Nonfarm Payroll.
Tomorrow, Fed officials Williams, Kashkari and Bostic all speak.
Yen (September)
Session close: Settled at .8978, down 39 ticks.
Fundamentals: U.S Treasury yields had begun jumping around 1 am EDT and that was when the dollar increased further against all major currencies. The yen has remained suppressed despite weakness in global equity markets.
Given today’s reliance on bond yields around the world, tonight’s 10-year JGB auction at 11:35 pm EDT is nothing to sleep on.
Traders also must keep an ear to the ground for any official statement from the White House tomorrow on the third wave of tariffs on China worth $200 billion.
The yen has not responded to safe-haven demands because of Japan’s proximity to China, instead the U.S dollar has been the safe-haven of choice; heightened tension and a rising dollar would likely weigh on the yen.
Technicals: Price action has dipped and settled below a key level at ...
Aussie (September)
Session close: Settled at .7180, unchanged.
Fundamentals: The RBA left interest rates unchanged as expected. However, upbeat comments on the economy were not enough to keep the Aussie from trekking to the lowest level since December 2016.
RBA Governor Lowe pointed to low-interest rates continuing to support the economy. Furthermore, the statement spoke of the Aussie weakening against the U.S dollar. Essentially, the RBA views the recent weakness as supporting the economy.
Additionally, Westpac hiked mortgage rates last week and other institutions are expected to follow; this is a tightening of financial conditions.
GDP data is due tonight at 9:30 pm EDT. Weakness is not a new trend, in fact, last week we said that bears can jump on this weakness and risk a stop above the recent swing high.
Technicals: Price action is edging closer and closer to our rare major four-star level at ...
Canadian (September)
Session close: Settled at .7590, down 74.5 ticks.
Fundamentals: After failing at a major technical level, not securing a new NAFTA deal sent the Canadian sharply lower on Friday. Those losses were extended through today on a slow bleed as President Trump continues to show a lack of concern for leaving Canada out of a trade deal.
Furthermore, he added that Congress “should not interfere.”
To add further pressure was a disappointing session from Crude which was up 2% early on the potential landfall of a Gulf hurricane to finish in the red.
Labor Productivity data and Trade Balance is due at 8:30 am EDT. The two highlights are the resumption of trade talks with Canada and the U.S and the conclusion of the Bank of Canada policy meeting at 10:00 am EDT (they are expected to leave interest rates unchanged).
Technicals: Today’s drop pushed the Canadian into and almost below major three-star support at ...
View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.
Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.
