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Euro Stoxx index falls for the first time in 11 trading sessions

European indices move lower today

The major European indices have closed lower today.

  • The Euro Stoxx index fell for the first time in 11 trading sessions (10 higher closes).
  • The German Dax came off of a record levels.
  • The France’s CAC could not reach its all-time high from 2000
A look at the provisional closes shows:
  • German DAX, -0.5%
  • France’s CAC, -0.9%
  • UK’s FTSE 100, -1.0%
  • Spain’s Ibex, -0.83%
  • Italy’s FTSE MIB, -0.85%
The Euro Stoxx index fell -0.7%.
In other markets as London/European traders look to exit:
  • Spot gold plus $5.50 or 0.32% at $1784.85.
  • Spot silver is up for cents or 0.21% $23.75
  • WTI crude oil futures are down $0.35 or -0.49% at $67.60
  • bitcoin is trading down $773 at $46,248. The digital currency traded above $48,000 today
In the US stock market, the major indices are lower but off their lowest levels:
  • Dow is down -79 points or -0.22% at 35436
  • S&P index is down -16.29 points or -0.36% at 4451.53
  • NASDAQ is down 125 points -0.85% 14697.65
In the forex market, the CHF is now the strongest of the majors while the CAD remains the weakest. The USD is mixed with gains vs the CAD, AUD and NZD and declines vs the JPY and CHF. The greenback is near unchanged levels vs the EUR and GBP.

Eurostoxx futures +0.5% in early European trading

Some mild optimism flowing in early trades

  • German DAX futures +0.6%
  • UK FTSE futures +0.4%
  • Spanish IBEX futures +0.4%
US futures have also moved higher in the past hour, with S&P 500 futures now up ~0.7% while Nasdaq futures have pared losses to flat levels now and that is feeding to some slight positive momentum to start European morning trade.
In the currencies space, the aussie is also ticking a little higher with AUD/USD now testing 0.7300 and the confluence of its key hourly moving averages @ 0.7294-13.
USD/CAD is also nudged lower from 1.3110 to 1.3090 and testing the confluence of its own key hourly moving averages @ 1.3086-91 currently.

CFTC commitments of traders: EUR longs spike by 32K to a record long level

Weekly FX speculative positioning data from the CFTC

 

  • EUR long 157K vs 125K long last week. Longs increased by 32K
  • GBP short 25K vs 15K short last week. Shorts increased by 10K
  • JPY long 29K vs 19K long last week. Longs increased by 10K
  • CHF long 8K vs 7K long last week. Longs increase by 1K
  • AUD short 5K vs 0K long last week. Shorts increased by 5K
  • NZD short 1K vs 2K last week. NZD switches from long to short. 3K change
  • CAD short 13k vs 17K short last week. Shorts trimmed by 4K
Highlights:
The BIG HIGHLIGHT for the week is in the EUR.  The EUR longs spiked up by 32K to 157K in the current week to a record high for long positions. The move higher is corresponding to higher EURUSD prices. The price of the EURUSD has been up for 6 consecutive weeks.  The long position started to move more to the upside during the May 19 week when the position was at 72K.  The EURUSD during that week was down at 1.0800. The price high today reached to 1.1908 before backing off.  Nice trade for the longs.
Of course, a concern for markets that get too long or short, is that there can be a squeeze the other way if prices start to lose trend momentum.   As a result, be careful of too much of a good thing, but let the technicals tell the story. They have been bullish.
Weekly FX speculative positioning data from the CFTC_
The GBP shorts, however, increased by 10K to 25K (still much lower than the EUR longs) while the currency has moved higher.
The JPY longs increased and the USDJPY moved down (higher JPY) into early trading today. However, the price snapped back higher and nearly erased the full move lower this week in a single day.

USD weakening further into Asia morning FX trade

The overnight (and past weeks!) USD weakness is carrying over into early Asia

Its heading towards 8.30am in Tokyo and 7.30 in Singapore and Hong Kong
Across the board USD weakness, although CAD is a laggard.
Apart from what I have been posting there is no fresh news.

An Update :US Dollar Index ,USDJPY ,AUDUSD ,USDINR ,EURO ,YEN ,GOLD ,SILVER ,PALLADIUM ,WTI ,BRENT ,SPX 500 -Anirudh Sethi

The dollar rallied strongly from March 9 through March 20 or the start of last week on March 23.  It has subsequently sold off and done so in dramatic fashion.  It is not clear the trigger of the stunning reversal.  Some observers attribute it to the Fed’s currency swap lines, which were offered daily (seven-day operations) to a handful of large central banks.
Others link it to the better risk appetites reflected in meaningful bounces in equity markets, but nothing as striking as the 17% rally in the Nikkei.  Even with a 915-point tumble in the Dow and a 3.3% drop in the S&P 500 before the weekend, both ended with double-digit gains on the week.  Gold’s 8.6% rally will not sit well with those who view it as a safe haven.  The 30- and 60-day rolling correlations on the percent change of gold and the S&P 500 are positive for the first time since the middle of last year and October 2018, respectively.
The technical indicators that we monitor, the MACD and Slow Stochastic, have turned down for the dollar against all the major currencies.  The poor technical condition suggests the dollar’s weakness is more than a function of month- and quarter- and fiscal year-end flows, but was technically over-extended.  We will use Fibonacci retracement and moving averages to identify potential price targets and relative strength.
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Brexit becomes a Dog’s Breakfast as Dollar’s Correction Continues

The Dollar Index fell the most in three months yesterday and is experiencing mild follow-through selling today.  With hopes that Hong Kong has turned a corner, news that in-person US-China talks will resume next month, and a no-deal Brexit is well on the way to being averted, investor risk appetites are robust today.  Global equities are higher as are benchmark yields, while gold is being pushed back below $1550.  Most Asia Pacific equities advanced, though India and Malaysia were exceptions and Hong Kong saw a bout of profit-taking after yesterday’s surge.  In Europe, the Dow Jones Stoxx 600 is advancing for the third consecutive session and the fifth in six sessions to trade at one-month highs.  The S&P 500 has been crisscrossed the 2820-2950 range several times in recent weeks and is poised to gap above the top today.  Interest rates are backing up, and the 10-year yields are 3-5 bp higher.  The dollar is edging lower against most major and emerging market currencies.  Among the majors, the yen and the Swiss franc are experiencing minor losses, while among the emerging markets, the Turkish lira is off about 0.25%.  The lira may snap a three-day, five percent advance as Prime Minister Erdogan weighs in again on the need for aggressive rate cuts to ambitious growth hopes.
Asia Pacific
 
The PBOC’s dollar reference rate has been extremely stable in around CNY7.0850, and it is the market that blinked first.  The dollar’s broad pullback yesterday saw the model projections eased below CNY7.0940.  The onshore and offshore yuan has also converged near 7.1460. Chinese officials have been slower to roll-out additional stimulus than many observers have expected.  We had thought there was a good chance of a cut in reserve requirements over the summer.  Nevertheless, the State Council appears to be hinting of action soon, and a window of opportunity is seen before the October 1 national holiday.
With the latest round of tariffs and counter-tariffs in the US-China spat going into effect on the start of the month, securing face-to-face meetings proved difficult.  This had contributed to the pessimism.  However, now Chinese officials will come to the US next month, according to reports.   Still, the prospects of a deal are remote.  Trust between the two at a low ebb after two tariff truces were ended by the announcement of new action on Twitter, and China shows reluctance to change fundamental behaviors.  Separately, the US trade figures show that China was the third-largest buyer of US crude oil in June and July (buying 5.7 mln barrels and 7.1 mln barrels respectively).  South Korea was the largest buyer, followed by Canada.  China puts a 5% levy on US crude as of September 1.
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August forex seasonal scorecard

You can’t predict anything from Donald Trump but the August seasonal patterns did a great job of predicting how the month would go.
1. Weakest month of the year for NZD/USD
This one delivered in a big way. Month-to-date the kiwi is down 3.7%. It’s fallen every which way and is the worst performing major currency this month.
2. 2nd weakest month for CAD
The loonie has been bolstered by some upbeat economic data including today’s GDP report but even with all that, the Canadian dollar fell 0.7% on the month against the US dollar.
3. 2nd weakest month of the year for AUD
It was the second-weakest month and AUD was the 2nd weakest performing major. AUD/USD fell 1.6% in the month.
4. 2nd weakest month for cable
This one bucked the trend but only modestly. Cable is up 0.4% on the month with more than half the gain coming today. Maybe it’s a good sign that the pound has been able to buck seasonal weakness?
5. 2nd strongest month for gold
Few traders need a recap on this one. Gold was a rocket ship in August posting one of its best months in years as it gained nearly 7%.
6. Poorest month over the past decade for the S&P 500
Stock markets have shown some impressive resilience over the tail end of this week but all that has done is narrowed a loss that was as much as 6.2% at one point down to -2.7%.
Verdict:
That’s a solid 5 out of 6 wins with a few homeruns in there. Ready for the September seasonal playbook?

Rouble hits 58 per dollar for first time since July 2015.Last Hope at 55.68

58-RUBThe rouble climbed to its strongest level since July 2015 on Monday morning, as the Russian Central Bank’s pledge to weaken the currency struggles to convince markets.

The rouble had already been appreciating as oil prices have recovered over the last twelve months, and growing optimism since Donald Trump’s victory in the US election has helped it become the best-performing emerging market currency since the vote, up just shy of 10 per cent.

President Trump’s calls for a normalisation of relations with Russia raised hopes of a relaxation of economic sanctions and encouraged international investors to return to the country.

However, economists have been sceptical the bank would be able to have a big impact on the currency, and it has continued to rise a further 1.6 per cent since the announcement, including a 0.5 per cent rise this morning to take it to 57.99 per dollar.

Euro surpasses US dollar as the currency of online casinos

At the dawn of the online gambling industry in the 1990s, the U.S. dollar was the major currency accepted in online casinos, but those days are over. The euro has replaced USD and is now the most popular currency. According to the latest research by KeyToCasino, the euro is currently accepted in 79% of all existing online casinos. 

The use of the U.S. dollar changed after the Unlawful Internet Gambling Enforcement Act (UIGEA), legislation regulating online gambling, was passed in the United States. The UIGEA has prohibited all gambling sites from accepting deposits online, forcing U.S.-oriented casinos out of business. At the same time, online gaming business in Europe has flourished, and many online casinos re-oriented their business towards European customers.

It has been 10 years since UIGEA, and many new online casinos have opened throughout this period. They have never considered targeting the U.S. market and never planned to include USD as a currency that is available for deposits. Players from countries with economically unstable currencies were forced to use the euro for their casino transactions.

American currency is not completely out of the gaming business however. It remains the second most popular currency in online casinos, followed by the British pound, which is accepted in 58% of online casinos. However, the overall popularity of Scandinavian currencies, which include the Norwegian krone, Swedish krona, and Danish krone, beats the pound because Norway, Sweden, and Denmark have the highest population ratio when it comes to casino popularity.

Among the other currencies that have become prevalent on online gaming market, there are the South African rand, South Korean won, and Russian ruble. The least popular are the Japanese yen and Chinese yuan. The Australian dollar beats the Canadian dollar in popularity because unlike in Australia, the legality of online casinos in Canada is uncertain, which results in the Canadian dollar not being widely accepted at online casinos.