Bill Baruch, president and founder of Blue Line Futures, reviews and previews the euro, Japanese yen, Chinese yuan, Aussie and Canadian and the upcoming 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 Oct. 24 here.
Stocks soften up again, is there a bigger move coming?
Euro (December)
Session close: Settled at 1.1517, unchanged.
Fundamentals: Currency markets traded in a surprisingly subdued manner given volatility across other asset classes, mainly equity markets. First, as expected, the EU officially rejected Italy’s budget plans and gave the country three weeks to revise. The EU has never officially rejected a member’s budget.
The euro has hugged a technically significant support level, but today’s news came as no surprise. With U.S. benchmarks showing the first true signs of vulnerability since the first half of the year, the U.S. dollar trickled weaker on the session as this was seen to potentially rein in the Federal Reserve’s hawkish rhetoric. Out of five Federal Reserve speakers today, Atlanta Fed President is the only one to vote in December. He expects growth to trend upwards and showed no signs of wavering from a gradual pace of hikes due to today’s volatility. Voters next year, Chicago Fed President Evans and Kansas City Fed President George, speak this evening.
Tomorrow is the first big day of data this week with Flash PMIs from Europe early; France 3:15 am EDT, Germany 3:30 am and eurozone at 4:00 am. From the U.S., given recent housing data, House Price Index due at 9:00 am EDDT might be watched more closely than usual. U.S. flash PMIs are released at 9:45 am EDT and New Home Sales are at 10:00 am. Fed members Bullard, Bostic and Mester speak in the afternoon. Fears of slowing data in Europe outweigh those fears for the U.S., Flash PMIs will be crucial to tomorrow’s activity.
Technicals: Here yesterday, we expected the euro to test lower given the reversal from session highs and weak close. Today’s tape tested and held major three-star support at ...
Yen (December)
Session close:
Fundamentals: The yen, along with Gold and Treasuries, responded to safe-haven demands overnight and into this morning as the S&P 500 (SPX) traded to the lowest level since June. However, all three asset classes gave back a large chunk of gains as things stabilized into the afternoon. In fact, the NQ hit green for a moment. The question now is, whether this rally from the lows in equity markets sticks overseas and carries into tomorrow. Flash PMIs out of Europe will either help or hurt a risk-on sentiment while the U.S. reads would directly affect the yen.
Technicals: The yen spiked through first key resistance that aligns with a trend line from the highs last week for a brief time this morning but was unable to hold out above. Moving forward, first key resistance now comes in at ...
Aussie (December)
Session close: Settled at .7089, up 2 ticks.
Fundamentals: The Aussie held its October 8 low, the lowest level since February 2016 by 14 ticks today before turning a corner. With 48 trading hours removed from the Aussie elections, there seems to be little concern for the currency front. The major focus is now whether risk-on sentiment carries a tailwind into tomorrow.
How do Asian markets respond to a firm recovery from U.S benchmarks? Furthermore, as volatility picks up, the White House is seen to emphasize trade talks with China and this brings a fundamental backstop if any fresh weakness in the Aussie is seen as globally broad-based. There is no data out of Australia tonight.
Technicals: Price action held the low which is first key support at .7045. Furthermore, the tape notched a settlement above .7088, leaving a tail on the session. We are looking for firm price action to carry the Aussie into major three-star resistance at...
Canadian (December)
Session close: Settled at .7649, up 9.5 ticks.
Fundamentals: The Canadian seemed unfazed by global turmoil overnight and into this morning and showed the desire to move higher upon any U.S. dollar weakness. Furthermore, Crude Oil shed another $3.00 today and finished nearly $10 from its recent high. This is not supportive to the Canadian, yet the Canadian did not trade lower. We find this very fundamentally constructive ahead of tomorrow’s Bank of Canada meeting. Of course, there are the risks of a “buy the rumor, sell the fact” reaction to any rate-hike that is priced in with a probability of greater than 90%.
However, we find some of the lackluster data more transitory due to the dragging out of NAFTA and if officials express this and emphasis strong confidence numbers, the Canadian should respond in a big way.
Technicals: Price action did not close above our pivot and thus it is not in the clear. Traders must watch this level and major three-star resistance at ...
Bill Baruch’s Midday Market Minute short video for Oct 23 here.
Is the bottom near for Crude and stocks Tuesday, asks Bill Baruch. Equities are getting slammed. Crude is biggest loser of the day, more than $3.
Bill Baruch: Equities, Crude slammed on Saudi saga today. Gold safe haven here.
View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.
Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.
