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. 30 here.
Is the stock selloff over?
Euro (December)
Session close: Settled at 1.14345, down 20 ticks.
Fundamentals: The euro traded within Friday’s range. Currencies largely ignored the whipsaw in equity markets; the S&P (SPX) traded in a range of more than 100 points and lost 1%. Typically, risk-off sentiment bleeds into currencies and this did not happen. The big news of the day is German Chancellor Angela Merkel stepping down from the head of the Christian Democratic Union party.
Helping the euro was S&P not downgrading Italy’s credit. On the data front, today was quiet; the Federal Reserve’s preferred inflation indicator, the PCE Index is a big number but it was in line with expectations.
This is a very pivotal week and tomorrow brings the first look at Eurozone Q3 GDP, Wednesday is the first look at Eurozone CPI and Friday is the U.S Nonfarm Payroll report. Tomorrow, French GDP is due at 2:30 am EDT, French Consumer Spending at 3:45 am, Spanish CPI at 4:00 am, German Unemployment at 4:55 am, Eurozone GDP is at 6:00 am along with Consumer Confidence and Business Climate. German CPI is due out later in the morning at 9:00 am CT. From the U.S, Case Shiller Home Price Index is due at 9:00 am EDT.
Technicals: Price action continues to battle valiantly at the August 15 December contract low, but it is important to remember the front-month September contract traded to 1.13275. Our rare major four-star level comes in at ...
Yen (December)
Session close: Settled at .89315, down 42 ticks.
Fundamentals: The yen finished lower on the session and gave little care to the sharp drop in equity markets. Traders are clearly preparing for the Bank of Japan’s policy meeting Tuesday night and given the expected continued divergence in policy between the Federal Reserve and the BoJ, no one is trying to get caught long the yen. They are expected to leave policy unchanged but let’s face it, the BoJ has gotten only more dovish since potentially hawkish comments in January. Furthermore, with global equity markets in the midst of a sharp downturn and the international trade conflict escalating, there is no reason for the Bank of Japan to change their path. Jobs data is due out of Japan tonight at 7:30 pm EDT.
Technicals: The yen finished right at our pivot level and below here we feel the bulls have little hope because it’s only a matter of time that it takes out major three-star support at ....
Aussie (December)
Session close: Settled at .7064, down 31 ticks.
Fundamentals: On Friday, the Aussie traded to the lowest level since February 2016 and today only introduced fresh questions after a bad finish for equity markets and reports that the White House is ready to impose additional tariffs on China in December if a meeting between President Trump and President Xi fails to yield anything in November. There is no clear edge here in the Aussie. Building Approvals data is due at 8:30 pm EDT and RBA Assistant Governor Bullock speaks at 11:10 pm EDT.
Technicals: Though the Aussie has not followed through to the downside, it has failed in each of the last four sessions at major three-star resistance at ....
Canadian (December)
Session close: Settled at .76245, down 21 ticks
Fundamentals: Although the Canadian has been dragged by global risk-sentiment, there is a backdrop to believe this currency can head higher. The first question one must ask themselves is whether they believe the U.S dollar has further upside and if commodities have further downside. Our belief is that each is very limited, and we expect to see fresh tailwinds in Canadian economic data on the heels of a NAFTA deal. This is our belief despite the global risk-off sentiment. Yes, this risk-off sentiment will drag the Canadian, but the longer-term upside is much greater. Still, those who decide to step into a volatile long must manage risk. Bank of Canada Governor Poloz speaks tomorrow at 3:30 pm EDT.
Technicals: Price action is unenthusiastic at best but is holding a secondary trend line from the July 20th low. There is tremendous support with our major three-star level that has been adjusted to...
View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.
Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.
