Archives of “August 20, 2021” dayrss
Major indices close higher.
- German DAX, +0.2%. The index was down -0.71% at the lows
- France’s CAC, +0.3%. The index was down -0.57% the lows
- UK’s FTSE 100, +0.4%. The index was down -0.39% at the lows
- Spain’s Ibex, +0.2%. The index was down -0.58% at the lows
- Italy’s FTSE MIB, unchanged. The index was down -0.86% at the lows
- German DAX, -1.2%
- France’s CAC, -4.0%
- UK’s FTSE 100 -1.85%
- Spain’s Ibex -0.7%
- Italy’s FTSE MIB -2.8%
In other markets as London/European traders look to exit for the week:
- Spot gold is up $4.30 or 0.24% at $1783.76.
- Spot silver is down eight cents or -0.32% $23.11
- WTI crude oil futures are down $0.64 or -1% at $62.98
- The price of bitcoin is up near $1700 at $48,455
- Dow industrial average is trading up 194 points or 0.56% at 35088.46. It traded as low as -27.05 points
- S&P index is up 12.4 points or 0.28% at 4431.04
- NASDAQ index is up 113 points or 0.78% 14654.33
As much as the Fed is planning to taper, watered down expectations going into Jackson Hole says more about the economic outlook
GBP/USD sellers set their sights on the July lows
It hasn’t been a good week for commodity currencies amid the hit to risk but the pound itself is also not faring too well, with cable experiencing a sharp drop yesterday by over 100 pips. And that downside momentum is continuing to today.
There are quite a number of worrying charts for risk at the moment
Taper for this year still on
The FOMC minutes have been released and there was some confusion on the release as to whether they were dovish or hawkish. The reason for the confusion was due to traders trying to interpret the minutes in light of the weaker economic data that we have seen recently. So, think of the CPI miss and the weak University of Michigan sentiment from last Friday.This resulted in some pretty choppy action with the USDJPY moving lower and then higher over the next 12 hours after the release. So, at times like these what can we learn? Let’s break it down to get some clarity.
- ‘Substantial further progress has not yet been met’ regarding the labour market conditions according to most participants. But the last jobs report came after the meeting, so that would have ticked all the right boxes. So, this means that another good jobs report in September will almost certainly mean a Q4 tapering
- However, most folks judge tapering could be appropriate this year as they saw the Fed as close to the goal of ‘substantial further progress’.
- The committee want to stop the market thinking that a move towards tapering has a mechanical link towards rising interest rates. Ok, that’s dovish, but hard to see how the market will not see tapering as a broadly bullish sign and that rate rises are the next obvious step. The FOMC minutes just want traders to not think the link is automatic.
- There were hints that the taper could be announced in Q4, but with more gradual reductions.
The bottom line
Tapering is coming and likely to be in Q4 as long as the US economy keeps moving in the right direction, There is no obvious trade to take from this expect to say that a USDJPY buy from major support levels makes sense as long as the Fed are moving towards tapering. Also, get a stellar jobs report in Feb and short gold, long USDJPY makes sense for some quick moves.
Baltic Dry Index rises for eight straight days
China to the rescue?
S&P and NASDAQ squeak out small gains
The major indices are closing mixed.
- The Dow is closing negative for the third day in a row.
- Both the S&P and NASDAQ broke losing streaks.
- The S&P snapped a today decline,
- The NASDAQ snapped a three day decline.
- The Russell 2000 index fell as well and has its long as losing streak since February 2000.
- The major indices on pace for weekly losses
- Dow S&P on track for worst week since mid June
- NASDAQ on track for the worst week since May
- Dow industrial average -66.57 points or -0.19% at 34894.12
- S&P +5.49 points or +0.12% at 4405.76
- Nasdaq +15.87 points or +0.11% at 14541.79
- Russell 2000-26.36 points or -1.22% at 2132.42