Maybe energy isn’t dead yet
European stocks had a big bounce in the middle of the week when it looked like the energy fever had broken but oil has made new highs and what looked like it could be a rapid turnaround in gas has stalled (though TTF is down 10% today). The forecast for mid-October in Europe is for colder weather and low wind so that will be something to watch.
- UK FTSE +0.3%
- German DAX -0.2%
- French CAC -0.5%
- Spain IBEX flat
- Italy MIB +0.3%
- UK FTSE +1.0%
- German DAX +0.4%
- French CAC +0.7%
- Spain IBEX +1.9%
- Italy MIB +1.8%
Highest level since June 4
The 10 year yield has moved above the 1.600% level for the first time since June 4. The move higher pushed above the June 17 high of 1.594%. It also moved above a Topside channel trendline near 1.584%.
The high yield for the year came in on March 30 at 1.774%. From that high, the price trended to the downside bottoming at 1.127% on July 20. Since then the yield has increased 48 basis points..
Technically the price moved above its 100 day moving average on September 23, retested that moving average level on September 24 before starting its move back to the upside.
June 17 at 1.594% The swing low on Monday stalled ahead of the 50% midpoint at 1.450% and has been up four of the last five trading days
WTI blasts through $80
The monthly chart of crude is shown above and I think it clearly illustrates how much room there is to run on this breakout, which came after four months of consolidation. The break also came right after the latest OPEC+ meeting, which offers some fundamental support along with gas-to-oil switching, which is in full swing right now. In fact, we might even see some coal-to-oil switching with inventories in India and elsewhere at unbelievably low levels.
CAD/JPY trades to its highest levels since early July
The pair has been an interesting one to take note of from a technical perspective since August trading and after holding at the lows in late September close to 85.00, buyers have produced quite a stunning bounce higher in recent weeks.
The latest shove in the past week sees price action push past the 100-day moving average (red line) and the August high @ 88.46. That has paved the way for further gains over the past few days with buyers edging past the 89.00 level today.
So, what’s next for the pair?
From a technical perspective, it is lining up for a solid rebound potentially back towards the late-May to early-June highs close to 91.00.
And with oil/commodity prices surging as well as a rather decent fundamental backdrop domestically, the loonie is keeping in good stead on the balance of things.
Adding to the tailwind for buyers in CAD/JPY is the surge higher in bond yields in recent weeks too. However, any further continuation of that will highly depend on today’s US jobs report for validation as we are seeing 10-year Treasury yields near 1.60%.
As such, if the fundamental factors align (especially the bond market), CAD/JPY is one to watch as it could perhaps look towards breaching the highs for the year.
It also isn’t the only yen pair that is looking for potentially more upside at this point.
Here’s a look at GBP/JPY and AUD/JPY, which are both contesting key technical resistance from its 100-day moving averages respectively at the moment:
Fantasia group Shanghai-traded Nov. 2022 bond falls more than 50%, trading suspended again.
Not going well in the Chinese property development sector.
10-year yields are up another 2 bps today to 1.59%
We’re finally at the point where 10-year yields are on the brink of touching 1.60%, the level touted upon the technical breakout last month here.
Can the move continue to extend further to the upside?
Well, that depends a lot on what the US non-farm payrolls releases will have to offer later today but if anything, I reckon we could see some room for a breather and consolidation in between the 1.60% and 1.70% region if the jobs report is a strong one.
I would expect bond sellers to go with some profit-taking so just be wary of that, considering that the Fed is making it clear that tapering and rate hikes are two relatively distinct set of events i.e. rate hike expectations may not swell alongside better data.
It’s all about inflation still when going about how quickly the Fed may need to raise rates but in any case, improved labour market conditions are always welcome in that regard.
For now, the latest shove higher in rates over the past few sessions is keeping yen pairs perky with USD/JPY back up at 111.90 and we’re seeing a more prominent breakout in CAD/JPY while GBP/JPY and AUD/JPY are contesting key technical levels today.
Sun Tzu wrote the book on battle preparations, claiming that battles are won and lost BEFORE swords are drawn. Why? Because preparation is key to success. Knowing when, where, why, and how to fight is more important than the weapons used to fight. Too many traders search for success while in the heat of battle, trusting that their instinct or higher education or technical knowledge of this indicator or that price pattern will guarantee victory. However, seasoned, successful traders have discovered that the battles in the market begin and end in the mind.
Those traders who suffer defeat in one too many battles, never to fight again, do so because they refuse to prepare for the uncertainty inherent in the markets. They choose instead to “shoot from the hip” with a gunslinger mentality. Battlefields change. The stock market is in a constant state of change. Those who win are prepared for these changes knowing that no two battlefields are alike. They are prepared with a plan of attack for any market condition. They prepare to win battles and they prepare to lose battles, knowing that defeat in battle does not mean ultimate defeat in the war.
Who will win and who will lose? It’s fairly simple isn’t it?
Nigeria stopped banks and financial institutions from dealing in or facilitating transactions in cryptocurrencies back in February of this year.
In preparation for launching its own cryptocurrency.
Governor Godwin Emefiele said Thursday that the CBN will launch its digital currency, the eNaira,in a couple of days from now.
- Emefiele had previously said the eNaira would operate as a wallet against which customers could hold existing funds in their bank accounts, and that this would accelerate financial inclusion and enable cheaper and faster remittance inflows.