Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 30 JUNI 2017

• EIA monthly report may reignite crude oil price volatility
• Gold prices may rise as soft inflation sours Fed rate hike bets
• Retail traders are long gold. See the trend implications here

A lull in pertinent news-flow allowed space for crude oil prices to consolidate having rebounded to a two-week high. The respite may prove short-lived as the EIAmonthly report on output and supply trends is released. A turn lower will probably be in the cards if the release stokes speculation that swelling swing supply will offset OPEC-led efforts to trim output.

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DAGELIJKSE MARKT ANALYSE 3 JULI 2017

- EUR/USD sailed into fresh yearly highs last week, and may have a new bullish catalyst to work through the summer months.
- The only EUR-cross that was negative last week was EUR/GBP, which was diverted thanks to surprising central bank commentary (but not from the ECB).

After several weeks of sideways trading, the Euro finally picked a direction. The Euro gained versus every major currency last week save for the British Pound, as European Central Bank President Mario Draghi’s commentary on Tuesday sent the single currency higher across the board through the end of the week. The sudden shift in tone by the head of the ECB at the end of the month and the quarter has now given the Euro the bullish catalyst it has been sorely lacking in previous weeks.

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DAGELIJKSE MARKT ANALYSE 4 JULI 2017

• Gold prices drop as ISM data helps reboot Fed rate hike speculation
• Crude oil prices continue to correct higher as US production slows

Gold prices suffered the largest decline in over seven months as US Treasury bond yields rose alongside the US Dollar, sapping the appeal of anti-fiat and non-interest-bearing assets. A hawkish shift in Fed policy expectations probably accounted for the move.

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DAGELIJKSE MARKT ANALYSE 5 JULI 2017

• FTSE 100 breaks multiple levels of support, most importantly a long-term slope
• The current bounce is set to turn back lower either from current levels of just a little higher
• Recent swing-low first targeted, looking likely a push towards Feb ’16 trend-line to take shape

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When we last looked at the FTSE 100 it was trading at the all-important 2013 top-side trend-line, which up until recent sessions held steady as support. During the process of breaking one key level of support the 6/15 low was taken out along with the June/’Brexit’ trend-line. This has the market poorly postured moving forward.

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DAGELIJKSE MARKT ANALYSE 6 JULI 2017

• Silver price showing unrelenting weakness
• Looking for a move towards the December low soon
• Outlined scenarios for taking advantage of further weakness

Gold has found a little buying interest around the May low, while the price action in silver price has been weaker, with offers coming in on every uptick. A theme which is unsurprising given the general relative weakness we’ve seen in silver compared to gold in recent months. Silver is only a bad day away from the December low while gold still needs to drop $100. This disparity makes silver the preferred short between the two major precious metals.

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DAGELIJKSE MARKT ANALYSE 7 JULI 2017

• Yen drops as BOJ strikes at yields, Pound down on soft data
• US Dollar may rise if June’s employment data tops forecasts
• G20 summit threatens kneejerk volatility as key issues linger

The Japanese Yen underperformed in overnight trade after the BOJ stepped in to push back against rising long-term bond yields. The British Pound also traded lower, falling alongside front-end UK borrowing costs. The move followed a disappointing round of industrial production and trade figures that seemingly weighed against near-term BOE rate hike expectations.

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DAGELIJKSE MARKT ANALYSE 10 JULI 2017

• Yen drops as risk appetite firms, BOJ’s Kuroda helps
• Stock index futures suggest mode of the same is ahead
• Aussie Dollar up after Chinese inflation undershoots

The Japanese Yen underperformed in otherwise quiet overnight trade. Stock prices rose across Asian bourses, pointing to a swell in risk appetite that undermined support for the standby funding currency. Indeed, the unit moved inversely of a rise in Japan’s baseline Nikkei 225 index.

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DAGELIJKSE MARKT ANALYSE 11 JULI 2017

• Australian, NZ Dollars match divergence in local bond yields
• Pound may fall if BOE officials echo dovish Governor Carney
• US Dollar may rise as Fed’s Brainard backs FOMC consensus

The New Zealand Dollar underperformed in overnight trade, falling against all of its G10 FX counterparts. The move lower tracked a drop in local front-end bond yields, hinting that a dovish shift in RBNZ policy expectations was the culprit behind the selloff. Soft card spending numbers seem too flimsy of a catalyst for the move however, making a mystery of the reason for investors’ change of heart.

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DAGELIJKSE MARKT ANALYSE 12 JULI 2017

• Japanese Yen gains as stocks fall in Asia, Euro corrects lower
• Canadian Dollar on the defensive ahead of BOC rate decision
• US Dollar may move more on hawkish vs. dovish Yellen tone

The Japanese Yen outperformed in otherwise quiet overnight trade as stocks declined, offering support to the perennially anti-risk currency. The Euro corrected lower having bested all of its G10 FX counterparts yesterday. The Canadian Dollar also edged down in a move that probably reflected protective pre-positioning ahead of the upcoming BOC monetary policy announcement.

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DAGELIJKSE MARKT ANALYSE 13 JULI 2017

• Gold prices aim at key chart resistance as Day 2 of Yellen testimony looms
• Crude oil prices may take cues from sentiment trends amid event risk lull

Gold prices rose after markets concluded that Fed Chair Janet Yellen adopted a dovish posture in testimony before a House of Representatives panel yesterday. She seemed wary of recently slowing inflation and suggested that rates won’t need to rise much further to get to a neutral setting. That sent the US Dollar lower alongside Treasury bond yields, boosting the appeal of anti-fiat and non-interest-bearing assets.

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DAGELIJKSE MARKT ANALYSE 14 JULI 2017

- U.S. Consumer Price Index (CPI) to Narrow for Fourth Consecutive Month in June.
- Core Rate to Hold Steady at Annualized 1.7%- Slowest Pace of Growth Since 2015.

Another downtick in the U.S. Consumer Price Index (CPI) may spur a rebound in EUR/USD as the Federal Open Market Committee (FOMC) appears to be scaling back its hawkish outlook for monetary policy.
Even though U.S. Retail Sales are projected to increase in June, the prepared remarks for the Humphrey-Hawkins testimony appears to have rattled interest-rate expectations as market participants scale back bets for a December rate-hike.

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DAGELIJKSE MARKT ANALYSE 17 JULI 2017

• US Dollar steadies after hitting 10-month low vs. major currencies
• Euro may shrug off CPI revision as ECB rate decision looms large
• Lull in top event risk, neutral risk trends make for clouded outlook

The US Dollar traded broadly higher to start the week. The move appeared to be corrective following Friday’s sharp selloff amid cooling Fed rate speculation in the wake of another round of disappointing economic data. The yield-sensitive Australian and New Zealand Dollars suffered outsized losses, tellingly dropping as US front-end rates edged up after touching a monthly low in the prior session.

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DAGELIJKSE MARKT ANALYSE 18 JULI 2017

• Crude oil prices decline as oversupply worries take center stage again
• Gold prices aim to extend gains as “Trump trade” unwinding heats up

Crude oil prices fell amid reports that compliance with the OPEC-led production cut accord fell to 92 percent in June from 110 percent in the prior month. That was compounded by the EIA saying US shale output will hit 5.58 barrels per day in August, an all-time high, as well as news ofan increase in output from Libya.

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DAGELIJKSE MARKT ANALYSE 19 JULI 2017

• Euro lower amid correction in anti-USD flows, Aussie Dollar holds up
• Lull in top-tier economic data flow may put sentiment trends into focus
• Risk-on mood seen ahead but US politics still a potent volatility threat

The Euro corrected lower in Asian trade. The move played out inversely of a rebound in front-end US Treasury bond yields, suggesting weakness reflected a correction in anti-USD flows triggered as the unwinding of the so-called “Trump trade” dealt another blow to Fed interest rate hike prospects.

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DAGELIJKSE MARKT ANALYSE 20 JULI 2017

• Euro may fall as ECB disappoints hopes for QE taper guidance
• Australian Dollar broadly lower despite upbeat employment data
• Yen down as BOJ signals lasting commitment to a dovish stance

All eyes are on the European Central Bank. Recent comments from ECB officials have confounded the markets, stoking volatility. First, President Mario Draghi hinted that maintaining a neutral policy stance amid improving economic conditions may require tweaks, which the markets read as hinting at a reduction in QE asset purchases. The very next day, other ECB officials walked back the comments.

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DAGELIJKSE MARKT ANALYSE 21 JULI 2017

- Canada Consumer Price Index (CPI) to Slow for Second Month in June.
- Core Inflation to Hold Steady at Annualized 1.3% for Six Consecutive Months.

Another slowdown in Canada’s Consumer Price Index (CPI) may tame the sharp depreciation in USD/CAD as it encourages the Bank of Canada (BoC) to adopt a more gradually path in normalizing monetary policy. Signs of softer-than-expected inflation may push the BoC to the sidelines as ‘very strong growth of the first quarter is expected to moderate over the balance of the year,’ and Governor Stephen Poloz and Co. may endorse a wait-and-see approach at the next meeting on September 6 as ‘geopolitical uncertainty still clouds the global outlook.’

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DAGELIJKSE MARKT ANALYSE 24 JULI 2017

- The composite purchasing managers’ index for the Euro-Zone in July fell to 55.8, below both the forecast 56.2 and the previous 56.3.
- EURUSD lost ground, though its upward trend remains in place.

The Euro eased against the US Dollar Monday as the “flash” composite purchasing managers’ index for the Euro-Zone dropped in July to a six-month low of 55.8 from June’s 56.3, beneath the 56.2 predicted by analysts. That was due principally to a drop in the PMI for the manufacturing sector as the services sector held up well.

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DAGELIJKSE MARKT ANALYSE 26 JULI 2017

• US Dollar may struggle to capitalize despite confident FOMC posture
• Aussie Dollar drops on CPI miss, NZ Dollar gains before Fed meeting

The Australian Dollar fell as disappointing second-quarter CPI data pushed back against RBA rate hike speculation. Central bank Governor Philip Lowe echoed the dovish sentiment outlined by his deputy Guy Debelle last week as expected, compounding selling pressure.

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DAGELIJKSE MARKT ANALYSE 27 JULI 2017

• US Dollar down as Aussie, Kiwi gain as Asia digests FOMC outcome
• Quarles confirmation hearing, US durables data in the spotlight ahead

The US Dollar underperformed in Asian trade as regional investors took their turn to respond to what has been an FOMC policy announcement that the markets have interpreted as dovish. The Australian and New Zealand Dollars duly rose, reveling in support from yield-seeking capital flows as US Treasury yields edged down alongside the greenback.

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DAGELIJKSE MARKT ANALYSE 28 JULI 2017

• Euro at risk if German CPI disappoints, cools ECB tightening speculation
• US Dollar may rise as Q2 GDP rekindles 2017 Fed interest rate hike bets

The preliminary set of July’s German CPI figures headlines the economic calendar in European hours. The headline year-on-year inflation rate is expected to tick down to 1.5 percent, revisiting the six-month low set in May. A weaker outcome echoing a sting of disappointing data in recent weeks may hurt the case for ECB stimulus reduction. That may weigh on the Euro, though it has been remarkably resilient lately.

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