It was all about Draghi on Thursday of course with a little help from the Russia re-probe. The king of verbal intervention played his last card – and lost. It wasn’t that he said anything particularly hawkish but the market lost patience and began to start a real pricing in a taper. Broad USD weakness hasn’t changed still but there are tiny signs of life Monday evening as I write this outlook.
EURUSD broke through and stayed above 1.1465 and more at 1.1615 which remains key for bulls to defend. Cable – still the sick child has not taken full advantage of a rubbish USD so I’m inclined is to sell rallies into 1.3050
USDJPY OFF as risk plays hurting an already weak USD. Staying below 111.50 is key for bears but Monday sessions saw subdued buying.
USDCAD looks like it has the most amount of tepid life for a possible USD turnaround. But it needs to get through 1.2565 and only then it’s worth a buy.
EURGBP big levels to watch .8850 and .9030 which I doubt we’ll get for a while.
- FOMC Rate decision, AUD CPI, US Durables and GDP
- US CPI and the next steps for FOMC. This is a real problem so expect some talking heads to placate the USD battering bears 2 weeks ago
- Summer markets? It looks like September came early.
- I like this. Financials suffering on yield curve spread income – or lack of. What would make this move ? Uptick in CPI and real wages. Zero Hedge has more. http://www.zerohedge.com/news/2017-07-24/can-financials-lead-flattening-yield-curve
Another shortish one but keep an eye out for Patrick Reid on Linked in with more.
Patrick and Adam