Archives of “August 2019” month

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USD/ARS hits 61 from 45 at Friday’s close

  
Analysis, Forex, Global Indices

It wasn’t even a real election

It wasn't even a real election
The primary vote on the weekend in Argentina was essentially an indicative vote but the market was betting that Macri could keep the gap close enough to win out in October.
Instead, he looks dead in the water, losing to Peronist Alberto Fernandez 32.1% to 47.7%.
The gap in the big-ask spread in USD/ARS is as much as 12%.
The main Argentina ETF is down 24%: (ARGT) with banks taking the brunt of the pain:
ARGT

China July M2 money supply +8.1% vs +8.4% y/y expected

  
  Analysis

Latest Chinese credit data for July has been released – 12 August 2019

China M2 12-08
  • Prior +8.5%
  • New yuan loans ¥1,060.0 bn vs ¥1,275.0 bn expected
  • Aggregate financing ¥1,010.0 bn vs ¥1,625.0 bn expected
Money supply growth was slightly weaker-than-expected though it remains within the average range seen over the past year.
It just goes to show that China is still working out efforts to balance deleveraging measures and allowing for looser credit conditions to bolster its economy.
But the recent tightening in liquidity (as seen via the loan amounts above) may not be encouraging for economic growth if it keeps up over the next few months.

Dollar gains further ground as risk aversion creeps in

  
Analysis, US Market

US futures pare gains to turn negative as bonds gain further

EUR/USD H1 12-08

The shift in the risk mood is helping the dollar push higher against the euro and commodity currencies on the day. EUR/USD just fell to a low of 1.1162 with AUD/USD and NZD/USD both falling to lows of 0.6765 and 0.6450 respectively.

Of note, EUR/USD is now challenging the 200-hour MA (blue line) and if sellers can find a break below that, then they will seize near-term control of the pair.
S&P 500 futures are now down by 0.1% while US 10-year yields have extended earlier weakness and is now lower by 4 bps to 1.703%.

USD/JPY falls to fresh seven-month low as risk mood sours on the day

  
Analysis, Forex

USD/JPY falls to 105.24, the lowest level since the January flash crash

USD/JPY H1 12-08

Equities are hitting session lows on the day with European equities having nearly pared all of their earlier gains and US futures now trading in negative territory on the session.
This comes amid a fresh wave of risk aversion sweeping across markets and is also helping to push Treasury yields lower. 10-year yields are down by 4.5 bps to 1.70% currently and that is seeing USD/JPY be pushed to fresh lows since the January flash crash.
E-minis 12-08
As highlighted earlier, the 105.00 handle will be a key spot to watch in the near-term for USD/JPY amid ongoing cautious sentiment in markets.
Large expiries and notable bids should allow the figure level to hold up but as long as markets remain petrified by ongoing US-China trade tensions and a slowing global economy, it is but a speed bump in the road for sellers to drive the pair lower.
If price starts to break down below that, expect stops to be triggered and things could get real ugly for risk sentiment when that happens. At the same time, expect Japanese officials to chime in again with more commentary as we saw last week.
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