Intraday Market Thoughts Archives

A hint that Trump may target Japan next sent USD/JPY lower Thursday while the Canadian dollar jumped on chatter from the Bank of Canada. That's quite fitting considering the US and Canada jobs reports are due next. The yen was the top performer while the New Zealand dollar lagged. A new trade for Premium subscribers will go out ahead of jobs.

إستغلال اندماج الأسواق" (فيديو المشتركين)

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Japan has been curiously sidelined in the global trade war despite being an obvious candidate for Trump's ire. The country has a large trade surplus and a structural imbalance with the US. It's also routinely angling for a weaker currency.

Much of the credit initially went to Abe who went on a major charm offensive with Trump immediately after the election but that may be wearing off. In comments to a WSJ opinion columnist Thursday Trump he was described as frustrated with Japan's surplus and said his relationship with Abe could soon deteriorate.

The news comes as NAFTA signs continue to improve. The tone was once again positive with Lighthizer even making a rare quip to reporters that negotiations were going well. Leaders appear to be pushing for a deal before the weekend but that's not a deadline.

With all eyes on NAFTA, it was the BOC that stole the trading spotlight for CAD after senior deputy Wilkins said in a speech that they discussed removing a nod to gradual hikes in yesterday's statement. Taking it out would imply a faster pace of rate hikes. Ultimately, they left it in but the comment suggests they're more likely to hike faster than to pause, especially if the NAFTA outcome is positive.

Trading sterling is a Brexit-headline minefield at the moment but the moves on Wednesday helped to underscore the mood of the market. Choppy trading ahead of the US ADP report and services ISM. Thursday is a key deadline in the China-US trade saga. A new index trade has been issued.The video for Premium subscribers is now posted, explaining some in-depth set-ups on US indices vs European indices.

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There are two ways to evaluate Brexit negotiations. The first is the economic lens; namely, what's good for the economy going forward. This means pricing in the chance of a no-deal Brexit that immediately leads to a reversion to WTO rules. Goldman Sachs puts this at an uncomfortably high 30%, while Carney this week said it was 20%. The positive baseline would be a transition period that meets the status quo and a high likelihood of a future trade deal that maintains a strong UK financial services sector. The ebb and flow is a complicated balancing act that also includes the odd talk of another referendum and endless political backstabbing.

The good news on Wednesday was a report saying the UK and Germany were prepared to refocus negotiations on a transition period that largely maintains the status quo while leaving discussion about the future relationships until after the March 29 deadline. The bad news was a denial that anything had changed from a German government spokesman a few hours later.

The other lens to evaluate Brexit negotiations is price action. The market's reaction to the news often tells you more than the news. On Wednesday, cable jumped 150 pips on the initial story and then gave up half on the denial.

Last week, a similarly vague, anonymously sourced story sent cable 150 pips higher and that was followed by a dismissal of the Chequers proposal that sent it 90 pips lower on Monday.

This examples are oversimplified but they're a glimmer of hope for the pound, which has undoubtedly been beaten down by many months of negative Brexit headlines and fear. At some point there will be clarity and it's in everyone's best interest to strike a trade deal. That doesn't mean it's time to buy the pound just yet.

Surely over the next few months there will be intermittent negative headlines, even if/when a deal is nearing. Negotiations are always toughest at the end. The event to watch for will be when sterling no longer falls on the 'bad news' headlines. When the denials are brushed aside. We may be nearing that point but we're not quite there yet.

On other trade deals, a similar uncertainty remains. Late on Wednesday there were faint signs of a NAFTA breakthough as Trump softened his tone and Canada and the US put together an unexpected meeting. A CAD-boosting deal could come before the end of the week.

Today is also the end of the comments period for the tariffs of 25% on $200 billion on Chinese imports. A recent report said Trump is considering announcing that the US will be going forward with the tariffs with implementation to follow in three weeks or less. This would be a major escalation from the current tariffs on $60B of goods.

هناك شيء واضح بشكل لافت للنظر وغير عادي حول ارتفاع مؤشرات الولايات المتحدة متعلق بضعف المشاركة. ما هي المشاركة في مؤشرات الأسهم؟ واصل القراءة لمعرفة التفسير المفصل

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As the last of summer Bank holidays is behind us, market liquidity attempts to find normal levels in a week that will end with the all important US and Canada jobs report and the latest political trade deal dynamics between the 2 countries. On Monday, renewed worries about NAFTA and Brexit weighed on markets and the theme of the final third of the year will be how it all plays out. The US ISM manufacturing index powered to a broad-based 14-year high, amplifying the USD ascent, already boosted by falling global indices.  The DAX short in the Premium Insights hit its final target at 12260 from the 12430 entry. Will discuss in this evening's video whether more declines are in store or will the 100-WMA will be respected.

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The ebb and flow of markets at the moment is largely driven by politics. Friday was a fake deadline to compete a NAFTA agreement. After negotiators reached a deadlock, the necessary Congressional notice was given anyway, leaving the three parties until the end of September to craft a final text of the deal.

That was followed by a series of anti-Canada tweets from Trump on the weekend along with a warning for Congress not to interfere. USD/CAD climbed Friday and on Monday, which was a holiday in Canada and the US. On Tuesday, the pair hit 1.3208, matching the July 20 high.

Cable, meanwhile, is increasingly at the mercy of comments from Barnier, Raab or whoever else is talking about Brexit. Last week, Barnier's comment about a special deal for Britain sent cable to its best day in months but all the gains unwound late in the week and on Monday after he rejected May's Chequer's proposal.

The other spot to watch is China. Thursday is the deadline for comments on Trump's proposal to place tariffs on virtually everything imported from China. A report last week said he intends to announce action immediately after the period ends. The market has shrugged its shoulders at the threats so far but it's difficult to believe that will continued.

Aussie briefly recovered on a brighter than expected outlook from the RBA policy statement, before succumbing to broad risk-off driven USD buying. Westpac announced higher mortgage rates last week and that sent AUD reeling because of the chance the RBA could lower rates to counteract it sometime in 2019. Recent news coverage is also littered with worries about interest-only loans in Australia resetting and crushing borrowers.

CFTC Commitments of Traders

EUR -7K vs -5K prior GBP -77K vs -72K prior JPY -46K vs -47K prior CHF -45K vs -47K prior CAD -25K vs -27K prior AUD -45K vs -50K prior NZD -24K vs -25K prior