Euro sheds a penny. The lifeless yen trade revives. The Aussie falls to risk-off exuberance. Caution on the Canadian this week. 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 calendar.
Euro (December)
Fundamentals: “I am a Tariff Man.” The phrase tweeted by President Trump that sent ripples through global markets Tuesday morning. The euro shed a penny from the session high on what started as Brexit fears overnight and turned into a global de-risking. On the currency front it reinvigorated the safe-haven winds in the sails of the U.S. dollar. The largest move came at 10:00 am EDT after NY Fed President Williams said the Fed should continue hiking interest rates “over the next year or so” and that the economy is “on a strong path with a lot of momentum.” As the euro remains rangebound at the lowest level since last June, this ups the ante on Friday’s Nonfarm Payroll report. Volume could be lighter Wednesday given the U.S. holiday, a national day of mourning in honor of President Bush 41.
In Europe, ECB President Draghi speaks at 3:30 am EDT, Composite and Services PMI are due at 4:00 am EDT and Retail Sales are out at 5:00 am EDT. All U.S government data including ISM Non-Manufacturing and the private ADP Payrolls has been pushed to Thursday except for the Beige Book which is still expected at 2:00 pm EDT.
Technicals: Despite the wide range, today brought little clarity to the aforementioned directional move (in yesterday’s FX Rundown). Of course, the short-lived ...
Yen (December)
Fundamentals: From the Sunday night open and into Tuesday morning, investors’ risk appetite continued to contract, and the Japanese yen was a key beneficiary. Just as we said yesterday, look for a close below the 200-day moving average in the S&P (SPX) to invigorate what has been a lifeless yen trade. The currency posted what appears to be its best day since July as the S&P sliced through strong support near the 200-day moving average and lost more than 3%. Treasury prices which can be a directional indicator for the yen surged higher. The Nikkei lost 1000 points or 4.5% today and a session like this should lead to continued volatility, something that yen longs can look to capitalize on.
Technicals: Yesterday, after a waffling test of major three-star support at ...
Aussie (December)
Fundamentals: The RBA left interest rates unchanged yesterday and RBA Governor Lowe gave a very upbeat synopsis of the economy and pointed to inflation and wages picking up. After finishing off its high of .7396 yesterday, the Aussie trekked all the way back overnight to fail by 1 tick before falling as a casualty to a global risk-off move as the exuberance on U.S and China trade quickly dissipated behind President Trump’s “I am a Tariff Man” tweet. Tonight, Aussie Q3 GDP is due at 7:30 pm EDT.
Technicals: Price action has again failed to trade out above first key resistance at ...
Canadian (December)
Fundamentals: Risk-on quickly flipped to risk-off and the Canadian finds itself less than a quarter of a penny from where it finished Friday after its GDP figures. Labor Productivity data today came in weaker than expected but this wasn’t the driver, it was the failure at the 200-day moving average in the S&P which was the result of President Trump’s tweet. We will be extremely cautious this currency ahead of Friday’s U.S and Canadian jobs report.
Technicals: Major three-star resistance at ...
Bill Baruch’s Midday Market Minute short video for Dec. 4 here.
View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.
Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.
