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- The equity bulls are so endearing
- If you don’t feel like enjoying the weekend, remember this
- ForexLive Americas wrap: USD/JPY falls below 98.00
- Summers consulting ties could hurt his Fed chances (but probably not)
- CFTC: Market was heavily long USD against GBP and JPY early this week
- The hammer is coming down: JPMorgan exploring options for physical commodities unit
- Instead of focusing on profits, focus on the other thing
- I’m guessing cable shorts cleared out in the CFTC data
- Colombian central bank leaves rates at 3.25%
- The takeaway from this week in one sentence
- USD/JPY shorts were the best trade this week
- Getting to know the newest Bank of England member
- If you thought this week was boring, next week we go into data overload
- Slovenia’s, Serbia’s and Czech Republic ratings affirmed
- As European traders edge towards the exit
- European stock close 26 July: France and Spain the islands of green in a sea of red
- It’s a Friday bloodbath
- Time for the Fed Chairman speculators to take a vacation
- Canadian May budget deficit widens to c$2.43bn from C$1.11bn
- Growth – a revised, revised approach
| The equity bulls are so endearing Posted: 26 Jul 2013 08:20 PM PDT JPMorgan Chase’s chief equity strategist, Thomas Lee, hiked his year-end target on the S&P to 1,775 from 1,715. Ok, lots of the analysts on Wall Street predicted the S&P 500 hitting 1700 this year. Good for them. The thing is, they always predict big rallies in the stock market. What kills me is that the targets were based on strong US growth this year, something that hasn’t happened. Still, they’re out there taking victory laps. Show me the guy who was saying, ‘I predict sub-1.5% first half growth and zero revenue growth but stocks will rise on expanding earnings multiples’ |
| If you don’t feel like enjoying the weekend, remember this Posted: 26 Jul 2013 02:15 PM PDT Mick Jagger turns 70 years old today. If someone can live that hard and make it to 70, none of us has an excuse. |
| ForexLive Americas wrap: USD/JPY falls below 98.00 Posted: 26 Jul 2013 01:15 PM PDT Forex headlines for July 26, 2013:
A steady flow of yen buying dominated until market enthusiasm dried up after the European close. USD/JPY kicked through 98.00 but could only push the needed to 97.96 and closes out the week close to 98.25. It was a grind in most pairs. EUR/USD tried the downside in early US trading, sinking to 1.3253 but it couldn’t get any lower and climbed back to 1.3275 and then sideways. Stocks were more of a talking point. The S&P 500 dropped 13 points in the early going but slowly climbed back and managed a green close. Gold found a late bid after hitting $1312. Last at $1333. Things will get much more interesting next week, so rest up and have a good weekend. |
| Summers consulting ties could hurt his Fed chances (but probably not) Posted: 26 Jul 2013 12:59 PM PDT The WSJ reports that Summers has been a paid consultant to Citigroup Inc. and other financial institutions. I don’t think this ‘revelation’ will mean much, even in hyper-political Washington. My guess is that the White House has leaked Summers’ name out there so all this press hits at a quiet time of year. That will keep headlines like this off the front pages in the Fall when the real battle starts. |
| CFTC: Market was heavily long USD against GBP and JPY early this week Posted: 26 Jul 2013 12:35 PM PDT Futures market speculative positioning data from the CFTC Commitments of Traders report as of the close on Tuesday, July 23:
I thought GBP shorts would have been running to the exits but they were adding to positions, at least until Wednesday. To me, that says the cable rebound could extend higher as more shorts are squeezed. The heavy JPY short positions also explains the painful, steady drop in USD/JPY late this week. |
| The hammer is coming down: JPMorgan exploring options for physical commodities unit Posted: 26 Jul 2013 12:03 PM PDT Bloomberg reports that JPMorgan may jettison its physical commodities unit. Goldman has been talking the same talk on increasing signals that the Fed may ban banks from physical commodities. |
| Instead of focusing on profits, focus on the other thing Posted: 26 Jul 2013 12:01 PM PDT Boris Schlossberg at BK Forex makes a great point in his latest note.
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| I’m guessing cable shorts cleared out in the CFTC data Posted: 26 Jul 2013 11:35 AM PDT Last week’s CFTC report showing dollar longs at a six-week high was the best telltale of what was to come. My guess is that cable shorts were pared back sharply in today’s data, which will be released at 1930 GMT. During the period the report covers — from July 17 to the close on July 23 — cable was the best performer.  Cable net position – CFTC futures |
| Colombian central bank leaves rates at 3.25% Posted: 26 Jul 2013 11:14 AM PDT The central bank held its benchmark rate at 3.25% and forecasts 4% GDP growth. |
| The takeaway from this week in one sentence Posted: 26 Jul 2013 10:52 AM PDT Dollar longs were a bit too long and they got burned in a sleepy, summer market. Off the top of my head, I can’t point to a news event or piece of US data that mattered this week. Next week, it’s back to fundamentals but month-end could toss in some extra volatility. |
| USD/JPY shorts were the best trade this week Posted: 26 Jul 2013 09:59 AM PDT USD/JPY fell 2.55% this week, the biggest move of any trade in the FX market. The entirety of the move came in the last two days. Heading into the week, all the talk was about the Japanese election. The LDP didn’t disappoint and delivered a victory at the high end of expectations. When the market opened, USD/JPY edged higher to 100.75 but then began a slide that accelerated below 100.00 as Tokyo opened. The early-week slide was essentially wiped out by late on Wednesday as USD/JPY climbed to 100.45. On Wednesday, we repeatedly wrote about offers at 100.50 and those held like a wall even as the dollar enjoyed a broad bounce. Eventually, USD/JPY failed at 100.50 three times and that was the tell. Beginning early yesterday, USD/JPY embarked on an extended slide that touched as low as 97.96 today.  USDJPY hourly chart The next best performers were NZD and CHF — an odd grouping. |
| Getting to know the newest Bank of England member Posted: 26 Jul 2013 09:18 AM PDT The Telegraph introduces Sir Jon Cunliffe:
BOE insiders Andy Haldane and Paul Fisher were passed over for the job, raising further speculation that the UK government is cleaning house at the post-King BOE. |
| If you thought this week was boring, next week we go into data overload Posted: 26 Jul 2013 09:11 AM PDT This week has been pretty mental, on not very much data, so the end of next week should see us all retiring to sun drenched palaces in exotic places as we get blasted with data that should help us make sense of the market Here’s a snapshot of next weeks calendar.
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| Slovenia’s, Serbia’s and Czech Republic ratings affirmed Posted: 26 Jul 2013 09:08 AM PDT
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| As European traders edge towards the exit Posted: 26 Jul 2013 08:36 AM PDT The builders next door had had their radio blasting all day, all week and I heard this on earlier. Sometimes you hear a song and it just takes you. I will shamefully admit to the ForexLive metal-ers that I was rocking out to Bon Jovi’s Living on a prayer earlier as well. Oh the shame! The words are pretty apt for describing this weeks trading as well. We’re lost in Markets
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| European stock close 26 July: France and Spain the islands of green in a sea of red Posted: 26 Jul 2013 08:33 AM PDT
European bonds
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| Posted: 26 Jul 2013 08:08 AM PDT As I thought earlier the market is liquidating longs in the dollar and stocks and commodities are bleeding out. S&P is down 12 pts to 1677 Gold is down nearly $17 to $1317 Oil is down 1% in Brent and 1.44% in WTI US Copper is down 2.46% US bonds still down but off the lows at 2.54% to 2.56% EU bonds are mainly flat on the day and mid range USD/JPY is just about keeping its head above 98 Even AUD/USD is falling alongside USD/JPY touching a low of 0.9228 EUR/USD has fallen away from 1.33 to 1.3262 and barring anything major 1.33 will live to see another day Cable continues to stall above 1.54 with the latest fall down to 1.5367 I think USD/JPY has come as far as it’s going to and so EUR/JPY and GBP/JPY could base around here also. We could see some profit taking coming into GBP/USD and EUR/USD as the afternoon rolls on. |
| Time for the Fed Chairman speculators to take a vacation Posted: 26 Jul 2013 08:03 AM PDT A ‘senior White House official’ quoted by Reuters says no announcement about a Federal Reserve Chairman is imminent and likely won’t come until the fall. They also say Obama has not made a decision on a candidate. Translation: There will be an announcement tomorrow. Separately, Senate Democrats are writing a letter in support of Yellen for the nomination. |
| Canadian May budget deficit widens to c$2.43bn from C$1.11bn Posted: 26 Jul 2013 08:00 AM PDT
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| Growth – a revised, revised approach Posted: 26 Jul 2013 07:35 AM PDT So, the Office for National Statistics in the UK proclaims that second quarter growth showed an increase of 0.6% – the best growth figures since mid 2010. Cue, the Conservative Party going off on holiday to the sunny uplands of Prosperity, a destination shortly available to all. Meanwhile, the Shadow Chancellor is heard mumbling into his beard that this is welcome but `long overdue`- and shuffles off to Skegness (Never heard of it ? Good, keep it that way.) BUT, what does this growth figure actually mean to the wider population. The answer of course is, on its own, very little. With other closely scrutinised numbers such as unemployment stats, and inflation figures, at least there is a relevance to their daily lives but GDP ?? The breakdown of this figure is where the real interest lies. The services side of the economy performed reasonably well ( so some small vindication there for we filthy city types – but a long LONG way to go before you can even admit to even having known someone who once met a Banker !) but the parts of the economy where proper jobs come from ie. manufacturing and construction, are nowhere near the required levels. Whilst I am on this point, and please bear with me – it concerns me that with increased globalisation, and manufacturing in the West being broadly shut down by the cheap labour available in the East, we are never going to find jobs for the large proportion of people who leave our schools (and some Universities !!) without a decent education. Gone are the days where the factories, fields, mills and mines gave an opportunity to earn a living wage. So where in the West, are we going to find opportunities for unskilled workers to wean them away from a State dependent culture ? Growing up in an area where your Parents have not got a job, and you have no prospect of getting one, breeds resentment and discontent. A huge problem for society. Anyway, rant over, where was I….Ah yes, GDP, and its component parts. So, to summarise, the parts of GDP that have meaning over the life choices/possibilities of the electorate don`t look so promising. But, don`t forget that these numbers are only provisional – only about 40% of the data is actually in, hence the inevitable revisions to this number that will be announced over the next 6 months. Even though the initial GDP statistic is unreliable, markets move based on it. In fact most of the closely anticipated numbers that come out of Governments are provisional and their only real purpose is to give the markets something (be it pretty unsubstantial) to hang on to. When you have a moment, just think of the fuss that there used to be about US non – farm payrolls – and then look at the subsequent revisions during the next couple of quarters. Had the real (eventual) number been known at the time, markets could have reacted totally differently. But as they say in the newspaper industry – never let the facts get in the way of a good story…… |
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