Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 17 JUNI 2016

• Gold prices recoil from 2-year high as sentiment trends correct
• Crude oil prices fail to capture risk-on rebound, fall for 6th day
• Lull in top-tier event risk to make for consolidative mood ahead

Gold prices were rejected downward after hitting a two-year high as sentiment trends reversed in US trading hours. Risk aversion had been the order of the day but markets switched gears into corrective mode after the last batch of the day’s US economic data crossed the wires.

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DAGELIJKSE MARKT ANALYSE 20 JUNI 2016

-How markets become disorderly creating volatile pricing
-Potential triggers for future event risk
-6 risks that grow prominent in an extremely volatile market environment

Over the past several years, we have seen some extraordinary events rattle markets and spark volatility to extremely large levels. For example, back on January 15, 2015, Swiss National Bank removed their peg on EUR/CHF causing the exchange rate to move 40% in a matter of seconds. To put this into perspective, the equities flash crash in May 2010 saw the Dow Jones Industrial Average move 9% in minutes. So a currency move of 40% in seconds was unprecedented.

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DAGELIJKSE MARKT ANALYSE 21 JUNI 2016

• Markets may be underestimating Euro-negative “Brexit” implications
• Barriers to UK market access to hurt Eurozone exports, overall growth
• Euro may plunge if “Brexit” seen as boosting Continental eurosceptics

The Euro has outperformed against the British Pound since the May 7 2015, when the Conservative Party won the UK general election and paved the way for EU membership referendum now looming on June 23. Sterling has lost 16 percent against its major counterparts while the single currency has shed 12.8 percent.

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DAGELIJKSE MARKT ANALYSE 22 JUNI 2016

• Gold prices drop most in a month, boosting case for double top
• Crude oil prices take aim at June high after third straight gain
• “Brexit” fear to limit impact of Yellen speech, inventories data

Crude oil prices managed to secure a third consecutive day of gains. The WTI contract was under pressure for most of the trading day but managed to find support as risk appetite firmed in New York trade, rising alongside stock prices. While shares failed to sustain gains into the closing bell on Wall Street, oil prices remained buoyant after weekly inventory numbers from API revealed a drop of 5.2 million barrels.

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DAGELIJKSE MARKT ANALYSE 23 JUNI 2016

• Crude oil prices snap winning streak, retreat from 2-week high
• Gold prices stall following largest one-day decline in a month
• Overnight risk-on dynamics may fade as “Brexit” vote begins

Crude oil prices turned lower as risk appetite softened on Wall Street, with the WTI contract following the benchmark S&P 500 index downward into the session close. Gold prices were little-changed after yesterday’s sharp selloff as Fed Chair Janet Yellen struck a familiar tone in testimony to the House of Representatives, offering little to alter the trajectory of established policy bets.

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DAGELIJKSE MARKT ANALYSE 24 JUNI 2016

• Financial markets come undone as UK opts for “Brexit”
• Record-setting volatility recorded across asset classes
• Markets envision drastic volatility risk in months ahead

Financial markets were caught wrong-footed as the UK opted for “Brexit”, with voters deciding by a 51.9 to 48.1 percent margin to take the UK out of the European Union. FX options suggested traders priced in a mere 19.6 percent probability of what has now transpired on the eve of the momentous referendum.

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DAGELIJKSE MARKT ANALYSE 27 JUNI 2016

• British Pound continues to sink as “Brexit” aftershocks plague the markets
• Yen and US Dollar gain, commodity currencies gap lower at trading open
• Risk sentiment trends may transition into corrective mode in the near term

Aftershocks from last week’s Brexit-inspired volatility continued to define currency market price action at the start of the trading week. The British Pound continued to underperform, losing around 2 percent against the majors. The sentiment-linked Australian, Canadian, and New Zealand Dollars traded downward while the safe-haven US Dollar and Japanese Yen dutifully moved in the opposite direction.

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DAGELIJKSE MARKT ANALYSE 28 JUNI 2016

- USD/CAD trading around the 1.30 handle after correcting lower alongside a rise in equities
- US Final GDP figures and June’s Consumer Confidence might have reduced impact

The USD/CAD is trading around the 1.30 handle after the pair corrected lower alongside equities following two days of significant advances on the backdrop of the “Brexit” decision. The sentiment linked Canadian Dollar suffered while the safety linked US counterpart strengthened in the aftermath of the referendum, as “risk off” appeared to be the order of the day. With that being said, the pair is trading lower today as corrective price action may be in order.

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DAGELIJKSE MARKT ANALYSE 29 JUNI 2016

- EUR/USD is trading in the confines of a well-defined short term triangle post “Brexit”
- German CPI, US PCE and the European Council Meeting in focus today, but doubts remain on short term influence

The EUR/USD is trading sideways as the pair continues to fluctuate in perceived indecision following the “Brexit” vote. Indeed, long term implications for the Euro following the referendum appear significant, but with those implications still very unclear it seems that the pair might be in a “wait and see mode”, while short term technical signs are suggesting something may be brewing below the surface.

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DAGELIJKSE MARKT ANALYSE 30 JUNI 2016

• US Dollar, Yen gain as NZ Dollar weakens amid corrective price action
• Markets to overlook UK GDP, Eurozone CPI as Brexit clouds policy bets
• Risk trends set to define G10 FX price action as markets digest volatility

The major currencies were little-changed in overnight trade, with markets seemingly settling into consolidation mode. The US Dollar and Japanese Yen corrected modestly higher having broadly underperformed against their top counterparts yesterday. The New Zealand Dollar dutifully pulled back having led the way higher in the prior session. Haven currencies retreated while higher-yielding alternatives found strength alongside stock prices on Wednesday as risk appetite recovered amid a lull in fresh fodder feeding Brexit-inspired volatility.

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DAGELIJKSE MARKT ANALYSE 1 JULI 2016

• Crude oil prices break from risk trends, recoil from range resistance
• Gold prices may find fuel to renew rally as yields fall in risk-off trade
• Eurozone PMI, US ISM data unlikely to command markets’ attention

Crude oil prices broke with broader risk sentiment trends yesterday. The WTI contract edged narrowly lower even as global share prices (as tracked by the MSCI World Stock Index) continued to recover. A discrete catalyst for the move did not readily present itself. Rather, price action may have reflected profit-taking into the end of the quarter following the best three-month performance since 2009.

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DAGELIJKSE MARKT ANALYSE 4 JULI 2016

- Sentix Investor Confidence Index fell to +1.7 from the prior +9.9, significantly lower than expected
- Report says the Euro-Zone is dangerously close to stagnation following “Brexit”
- Sentix comment that the ECB is now expected to ease further and Euro-break up probabilities have increased

Sentix Investor confidence Index fell -8.2 points in July to reach +1.7, which marked the lowest overall reading since January 2015. The index fell below the June reading of +9.9, and was significantly below economists’ expectations for a drop to +5.0.

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DAGELIJKSE MARKT ANALYSE 5 JULI 2016

- The Australian Dollar slightly lower versus other major currencies
- RBA keeps cash rate at record low 1.75%, as expected
- Further information to refine growth and inflation assessment for a possible adjusment to policy

The Australian Dollar saw an initial move higher overturned versus other major currencies (at the time this report was written) after today’s Reserve Bank of Australia (RBA) rate decision saw interest rates unchanged at record low 1.75%, as was expected by economists.

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DAGELIJKSE MARKT ANALYSE 6 JULI 2016

• Yen gains, British Pound sinks on Brexit-linked stokes growth fears
• Eurozone Retail PMIs unlikely to generate strong market response
• US Dollar response to ISM data may hint at post-NFP price action

Risk aversion carried over from Wall Street trade and into Asian hours. The sentiment-linked Australian, Canadian and New Zealand Dollars followed share prices lower. The anti-risk Japanese Yen and US Dollar outperformed. Tellingly, the British Pound proved weakest on the session, hinting that Brexit-related fears are pushing their way back to the forefront.

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DAGELIJKSE MARKT ANALYSE 7 JULI 2016

- July typically brings the second of a two-month summer lull for the US Dollar.
- Gold has fared well mid-year; Brexit vote boosts potential for gains.
- S&P 500 might see reprieve in July, but seasonality trends favor mid-year weakness.

The beginning of the month warrants a review of the seasonal patterns that have influenced forex markets over the past several years. For July, as we have done for all months in 2016, we have expanded our focus on the period of 1996 to 2015 in recognition of the evolving relationship between economic data, central banks, and financial markets.

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DAGELIJKSE MARKT ANALYSE 8 JULI 2016

- U.S. Non-Farm Payrolls (NFP) to Expand Less Than 200K for Fourth Consecutive Month.
- Average Hourly Earnings to Increase Annualized 2.7%- Highest Reading Since July 2009.

Despite forecasts for an uptick in the U.S. Unemployment rate, a 180K expansion in Non-Farm Payrolls (NFP) accompanied by an uptick in the Labor Force Participation Rate may spur a near-term decline in EUR/USD as the world’s largest economy approaches ‘full-employment.’

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DAGELIJKSE MARKT ANALYSE 11 JULI 2016

- USD/JPY trading above the 102 handle in early London trading hours
- Yen weakness follows Shinzo Abe’s election win and the possibility of further stimulus

The USD/JPY is trading above the 102 handle (at the time this report was written) after the pair saw a surge higher following the results of the upper house election in Japan. Prime Minister Shinzo Abe won a supermajority in the chamber, which might imply further easing by the BoJ down the line.

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DAGELIJKSE MARKT ANALYSE 13 JULI 2016

- USD/CAD trading in a narrow range in early London trading hours
- The Bank of Canada rate decision firmly in the spotlight as the pair appears to trade in anticipation

The USD/CAD is trading around the 1.3050 figure in early London trading hours, as the market appears to be trading sideways ahead of the major event risk on the docket.

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DAGELIJKSE MARKT ANALYSE 14 JULI 2016

• Pound soars with risky assets before Bank of England interest rate decision
• MPC rate cut may boost Sterling as financial stability overshadows yields
• NZ Dollar drops as RBNZ hints stage is set for interest rate cut in August

Risk appetite is swelling as markets turn their attention to the Bank of England monetary policy announcement. A narrow majority of economists polled by Bloomberg (31/54) expect the central will reduce the benchmark lending rate, with most projecting a 25bps cut to a record–low 0.25 percent. The anti-risk Japanese Yenis underperforming while the sentiment-geared Australian and Canadian Dollars are tracking share prices higher.

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DAGELIJKSE MARKT ANALYSE 15 JULI 2016

• Gold prices may erase intraday losses after BOE opts against rate cut
• Crude oil prices treading water in a narrow range above $44/bbl figure
• Upbeat US data may boost risk appetite, punish gold as crude oil gains

Gold prices recovered to erase most intraday losses and crude oil prices retreated from session highs alongside stock prices after the Bank of England opted against an interest rate cut yesterday. The move appeared to undermine risk appetite among traders yearning for something to soother post-Brexit jitters.

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