Also “if you’re a compulsive gambler, close your terminal”
Archives of “June 25, 2019” day
rssFed’s Powell: Many on FOMC see stronger case for more accommodation
Powell speaks at the Council on Foreign Relations:
- Many on FOMC see stronger case for more accommodation but also do not want to overreact to individual data points or short-term sentiment swings
- Solid fundamentals are supporting continued growth, strong job creation
- Unemployment is low, the economy is growing and inflation is near the Fed’s objective
- Although inflation is running somewhat below target, ‘we have expected it to pick up’
- Businesses and agricultural contacts have reported heightened concerns over trade developments
- FOMC’s baseline outlooks remain favorable against backdrop of heightened uncertainties
- Repeats that the Fed to closely monitor information and act as appropriately
My read is that these comments also aren’t as dovish as expected. There’s nothing here to lead me to believe a 50 bps cut is on the table in any meaningful way. Yes, we still have 5 weeks to go but it doesn’t look like Powell is hitting the panic button.
There will be a Q&A after the speech with the moderator and audience.
Bitcoin got close to 50% midpoint today
50% of the move down from the December 2017 high
The price of Bitcoin on Coinbase is up about $532 at $11385. The high today reached $11470.20. That got the price within $40 of the 50% midpoint of the move down from the December 2017 high at !9891.99, and the December 2019 low at $3128.89.
Another target comes from the daily chart. The 50% of the big move down from the December 2017 high comes in at $11510.44. Like the 50% on the hourly chart, it too will be key for the longer term picture of bulls and bears. It is a big line in the sand that buyers will need to break to keep the run higher. Be aware.
Being a key level, it works as a barometer for buyers and sellers.
For buyers, they want to see the level broken, and the trend higher continuing.
For sellers (may be new longs or profit takers), They want to see the price stall against the level and rotate back down. If it breaks above, those sellers can cover (and even go long).
So the level remains key. Today the digital currency had it’s closest test but it was still $40 short of the target.
Drilling to the hourly chart below, a lower trend line comes in at $11,110.50 currently. A move belowt that level might see some selling with the lagging 100 hour MA (blue line) at $10762.02 (and moving higher) as another key level on the downside for sellers/bears. Stay above, and the sellers may win a battle but they are not winning the war.
European shares end mostly lower
Italy down -0.73%. German Dax down 0.3%. UK FTSE up 0.1%
The major European indices are ending mostly lower. The UK FTSE is bucking the trend with a modest gain.
The provisional closes are showing:
- German DAX, -0.3%
- France’s CAC, unchanged
- UK’s FTSE, +0.1%
- Spain’s Ibex, -1.1%
- Italy’s FTSE MIB, -0.73%
In the benchmark 10 year notes, yields are mostly lower. The exception is the Italian BTP which is higher by 0.4 bps (it was higher earlier). The highs and lows, current and changes are outlined in the table below. NOTE that France’s 10 year dipped below the 0.0% level (currently at -0.006%.
In other markets as London/European traders look to exit are showing:- spot gold, plus $8.20 or 0.58% at $1427.83
- WTI crude oil futures are up $.23 or 0.40% at $58.13
- Bticoin on Coinbase is up $508 and $11,361
- S&P indexes down 10.34 points or my 0.35% at 2935.05
- NASDAQ index is down 53 points or 0.67% at 7952.30
- Dow is down 44 pointers -0.17% at 26683
US yields are moving lower with the 5-year down -3.3 basis points.
In the Forex market the NZD remains the strongest of the major currencies, the GBP remains the weakest. The USD is lower as well with small gains vs the GBP, EUR and CHF.
$USDINR 1 year forward points hit a 2 year high. Unrelenting!
$INR implied forward yields rise to the highest level since May 2017
New British PM will be announced on 23 July
As confirmed by the Conservative party HQ
Boris Johnson remains odds-on to win the battle against Jeremy Hunt but it’s never over until the fat lady sings, especially in politics. But either way, both of them have made clear that there will be a decision on Brexit by 31 October – or at least that’s what they claim now – so expect markets to focus on that the minute that the race is over and done with.
Iran says fully prepared to tackle US sanctions but will not reveal its plans
Comments by Iran’s economy minister in reaction to US sanctions
I don’t think Iran has a lot of fighting powder to hit back at the US but they probably have mitigating actions to help alleviate pressure from the latest sanctions. The real fear is if they feel emboldened enough to take more military action as what we saw last week when they shot down a US drone over the Strait of Hormuz.
Either way, tensions between the two are likely to escalate further before they get any better in the coming days/weeks.
EUR/USD: Buyers still hunting for a firm break above 1.14
Price is continuing to sit just under the 1.1400 handle
It’s been a relatively quiet session for the pair so far with price action inching towards the lower side on the day under the 1.1400 handle. That said, the trading range remains narrow with price largely seen between 1.1385-00 in the past few hours.
For buyers, they are still searching for a firm break above the 1.1400 handle with minor resistance also seen around 1.1420. The bias and momentum continue to sit in their favour but markets may very well be in a wait-and-see mode ahead of the Trump-Xi meeting that will take place later on in the week.
Of note, there are also expiries resting at 1.1400 (€563 million) today, 1.1370-90 (€3.4 billion) tomorrow, and again at 1.1400 (€1.5 billion) on Thursday. If you factor that in alongside month-end and quarter-end flows, it could perhaps provide some draw in anchoring price action over the next few days amid market indecision.
That said, unless price starts to threaten a fall back below the 200-day MA (blue line) @ 1.1348 then buyers are still in control of the pair and technically look poised for a continued break higher from here.
German yields hits new record low as bond rally continues
10-year bund yields fall to a record low of -0.33%
No reprieve for yield-seekers in Europe as the bond rally continues to gather pace amid softer risk tone in markets today. 10-year bund yields just hit a record low of -0.33% as the free fall looks set to continue unless we hear of more optimistic signs from US-China trade talks later on in the week.
Nonetheless, this adds to more reason why gold remains a standout performer today and over the past few weeks.