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GS note CNH, and other Asian currencies, strength approaching the G20 meeting next week (June 28 and 29), and are looking to short CNH.

Citing that even if there is some sort of easing in trade tensions at the G20 they will not disappear entirely:

  • likely to “ebb and flow”
  • still see additional tariffs as “more likely than not”

GS also say yen looks attractive still (Fed rate cuts, signs of slower US economic growth to chip away at USD strength).

Yuan had a good one last week, following the PBOC holding it fairly steady since mid-May  despite market expectations it would fall:

GS note CNH, andother Asian currencies, strength approaching the G20 meeting next week (June 28and 29), and are looking to short CNH.

Week ahead: Trump-Xi meeting, Fed, SpaceX

Investors are hoping a highly anticipated meeting next week between President Donald Trump and his Chinese counterpart, Xi Jinping, will lead to a breakthrough in contentious trade negotiations between the world’s two most important economies.

A line-up of Federal Reserve speakers, fresh economic data and a SpaceX rocket launch will also draw attention in the coming week. Here’s what to watch.

G20 meeting

Geopolitical tensions have taken centre stage for investors in recent days, with Iran’s downing of a US drone driving oil prices higher amid worries of a growing conflict.

Add global trade back into the mix next week as Mr Trump and Mr Xi meet on the sidelines of the G20 summit in Japan.

Mr Trump announced earlier in the week that he would hold an “extended meeting” with Mr Xi in Japan and that officials on both sides would jump-start negotiations ahead of time. US vice-president Mike Pence said Friday there were signs of progress in talks with China, further raising hopes of a breakthrough. The two-day G20 summit begins June 28.

The talks will come amid a standing threat by Mr Trump to slap tariffs on another $300bn in Chinese goods if Washington and Beijing can’t come to terms on a deal. Negotiations stalled in May, with the US and China exchanging a fresh round of tariffs.

Meanwhile, Nato defence ministers including Mark Esper, recently named by Mr Trump as acting head of the Pentagon, will begin a regularly scheduled meeting on June 26 in Brussels amid escalating tensions with Iran.

Federal Reserve (more…)

White House trade advisor Navarro: Either we get a great deal with China, or we don’t

He makes it a binary decision but what is “great”?

Peter Navarro is on the wires saying:

  • We either get a great deal with China or we don’t
So what he says is a binary decision. It’s one or the other. What we we don’t know is what “great” is.
Having said that, what we do know is if a deal is done (whatever it is), it will be “Great!”. It will be the greatest deal since the great USMCA deal.
Navarro now adds:
  • China to devaluing currency to offset tariffs
  • level of additional China tariffs not decided yet

CFTC commitments of traders: EUR and JPY shorts trimmed

Weekly Forex futures that noncommercial positioning data for the week ending June 18, 2019

  • EUR short 52K vs 87K short last week. Shorts trimmed by 35K
  • GBP short 53K vs 45K short last week. Shorts increased by 8K
  • JPY short 17K vs 45K short last week. Short trimmed by 28K
  • CHF short 15k vs 25k short last week. Shorts trimmed by 10K
  • AUD short 65k vs 63k short last week. Shorts increased by 2K
  • NZD short 24K vs 16K short last week. Shorts increased by 8K
  • CAD short 38K vs 33K short last week.  Shorts increased by 5K
  • Prior week

Highlights:

  • EUR shorts were trimmed by a decent 35K. The position short was as high as 100K a month or so ago.  Now 1/2 that position
  • JPY shorts were also trimeed significantly in the week.
  • GBP, AUD, NZD and CAD shorts on the otherhand were increased.

Major indices end the up and down in the red.

Dow gives up gains and ends in the red.  Nasdaq the worst performer

The major stock indices are ending the up-and-down session in the red. The Dow, that was higher for most the day, closed near it’s lows and gave up the gains.
The final numbers are showing:
  • S&P index -3.72 points or -0.13% at 2950.46. The index closed yesterday at an all-time high. Today, the intraday high was a new record at 2964.15, but the close was not
  • Nasdaq index -19.633 points or -0.24% at 8031.70. The high reached 8073.02. The low extended to 8011.199. For the NASDAQ index this week, the high price reached 8088.88 on Thursday. That was still below its all-time high close at 8163.99.
  • The Dow did move above its all-time high close level at 26828.39 intraday (the high reached 26907.37). However, the index gave up the gains and closed below that all time high level at 26719.13, down -34.04 points

For the week, the major indices were higher:

  • S&P index, +2.2%
  • NASDAQ index +3.01%
  • Dow, +2.41%