Archives of “August 2019” month

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Trump says he is not thrilled with strong dollar

  
  Analysis

Trump tweets for the first time today

As your President, one would think that I would be thrilled with our very strong dollar. I am not! The Fed’s high interest rate level, in comparison to other countries, is keeping the dollar high, making it more difficult for our great manufacturers like Caterpillar, Boeing,……..John Deere, our car companies, & others, to compete on a level playing field. With substantial Fed Cuts (there is no inflation) and no quantitative tightening, the dollar will make it possible for our companies to win against any competition. We have the greatest companies…….in the world, there is nobody even close, but unfortunately the same cannot be said about our Federal Reserve. They have called it wrong at every step of the way, and we are still winning. Can you imagine what would happen if they actually called it right?
Is FX intervention on the table?

Germany considers U-turn on fiscal stance with new debt to fight climate change -report

  
  Analysis

Germany might spend after all

Reuters, citing a senior government source, says the goal of no new debt is no longer tenable in light of climate challenges.
Germany is under pressure to start spending because it can borrow money for free and has an enviable debt situation compared to its eurozone peers. By citing climate risks, it might be a way to climb down from the fiscal stance. The report says new debt will be linked ‘strictly’ to climate measures but that could still end of being stimulative.
This is euro-positive but the headlines hit just as the euro and pound were getting beaten up. It has halted the slide in EUR/USD at a session low of 1.1181 and the pair has bounced 10 pips.

Saudi official says that recent concerns about oil demand growth are “overplayed”

  
Analysis, Crude

Reuters reports, citing a Saudi oil official on the matter

Oil
  • Recent concerns reflect poor macroeconomic environment
  • Oil market fundamentals are good
  • Especially on supply side due to strong commitment of OPEC+ with supply cuts
  • Says key OPEC+ countries are committed to do whatever it takes to keep oil market balanced next year
Of course you’d heard this type of comments by OPEC. For those who are unfamiliar, it’s typical of them to remark that “when prices go up, it’s due to fundamentals” and “when prices go down, it’s due to speculation”.
Oil is scaling back some of its earlier gains with WTI hovering around $52.00 currently after having been as high as $52.84 at the start of the session. The gains since overnight trading largely stems from Saudi Arabia saying that they will “consider all options” to halt the recent decline in oil prices.

Eurostoxx futures +1.3% in early European trading

  
Analysis, Global Indices

Positive vibes seen in early trades

  • German DAX futures +1.2%
  • French CAC 40 futures +1.1%
  • UK FTSE futures +0.9%
The late recovery in US equities overnight, where we saw the S&P 500 pare losses of as much as 1.9% to near flat levels is in part feeding into the gains here. The more buoyant mood in equities today is also helping, with E-minis up by 0.4% as we begin the session.
That said, the bond market is still sending an opposite signal and that is the reason why the yen is holding more firm at the moment. USD/JPY is closing back in on the 106.00 handle and I’d be wary of that as we could see a switch from greed to fear later on in the day.

Nikkei 225 closes higher by 0.37% at 20,593.35

  
Analysis, Global Indices

Asian equities more firm amid the calmer risk mood in markets

Nikkei 08-08

Equities more buoyed on the day as investors take some comfort in the perceived notion that China is limiting yuan weakness for the time being.
The improved risk sentiment mainly stems from the fact that the yuan fixing today wasn’t as weak as many had expected, despite moving beyond 7.00 per dollar.
However, there’s a continued divergence between equities and bonds once again with Treasury yields holding near session lows currently. 10-year yields sit at 1.708%, down by 2.5 bps on the day. That for me is still a signal that markets should remain more cautious than be chasing a risk-on rally of sorts in the session ahead.
USD/JPY holds weaker at 106.09 as such, closing back in on the 106.00 handle as we begin the European morning.

Stocks close with solid gains after yesterday’s tumble

  
Analysis, US Market

Major indices rebound 1.3%

The major indices shrugged off the sharp fall yesterday, and although the price action saw earlier gains retrace toward unchanged, an afternoon rally took the price back up.  The indices all closed near the highs with gains of 1.2% or more in the major indices.
Major indices rebound 1.3%
A look at the numbers show:
  • S&P index, up 37.03 points or 1.30% at 2881.
  • Nasdaq index up 107.22 points or 1.39% at 7833.26
  • Dow up 311.78 point or 1.21% at 26029.52
After the close Disney reported disappointing earnings, missing on the top and bottom line (EPS 1.35 vs $1.72 est.  Revenues were at $20.25B vs $21.46B estimate).  Disney shares closed up $3.57 at $141.87. It is trading at $136.30 currently in after hours trading.
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