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Central banks, OPEC +, earnings season, dollar and ECBYesterday started with the Bank of Japan. As we have already noted, the parameters of monetary policy (rates and quantitative easing program) were left unchanged. But at the same time, the Central Bank lowered its own forecast for the country's economic growth in the current fiscal year (ends in March 2021): GDP will decrease by 4.5% -5.7% (previously the range was 3% -5%), that is, outlook is worsened very significant. The Bank of Canada also did not change the status quo: the parameters of monetary policy were left unchanged. Among other news, it is worth noting the results of the OPEC + meeting. As we predicted, the voluntary 9.7 million b / d cut for August was not extended. This means that in a couple of weeks, the supply in the oil market may immediately grow by 2 million b / d, which is a very strong bearish signal. On the other hand, OPEC + assures that the overall reduction in August and September will be not 7.7 million bpd, but about 8.54 million bpd over the next two months, since Iraq, Nigeria, Angola, Russia and Kazakhstan will compensate for previous non-compliance. Otherwise, markets continued to be in risky mode following the announcement of Moderna vaccine trials. We have note once again that this news does not solve the current problems in any way, even if we forget that this is a very early stage of testing and more than one month will pass before the vaccine appears on the shelves. However, this temporary optimism boosted equity markets and also weighed on the dollar. As a result, the Dollar Index tried to break the key support 96. So far, we cannot state unambiguously that the level has been taken, which means that all our recommendations for buying the dollar remain relevant. But if a breakdown does occur, then it makes sense to turn into dollar sales across the entire spectrum of the foreign exchange market. The earnings season, meanwhile, continues and yesterday's reports can be treated as good ones for the current conditions. However, the growth of equity markets was very limited. This is largely due to the fact that those companies whose results turned out to be better than forecasted had their own unique reasons for improving performance, which, moreover, were of a rather one-step nature. In general, stock markets are clearly losing momentum. For example, today the data on Chinese GDP came out better than forecasted, but the Chinese stock market is in deep red. Today we are preparing for new reports from US corporations (Netflix, Johnson and Johnson, Morgan Stanly, Bank of America and others), as well as the ECB's decision on the parameters of monetary policy in the Eurozone.
SSE:000300Short
by Trade24Fx
1
Lockdown 2.0 in California, weak data and central banksThe main news of yesterday can be considered the introduction of lockdown №2 in California. Yes, this is a milder version of restrictions (food in take-away restaurants, banning bars and public events), but California is still the main generator of US GDP, and indeed the world as a whole (6th place among all countries in the world level of GDP). So, everything is serious, very serious, especially considering that the situation with the pandemic in the US is getting worse. And not only in the USA: Hong Kong tightens restrictions, Tokyo is a step away from introducing a new state of emergency, Iran is closing schools, etc. In general, yesterday can be safely written in the liabilities of the global economy. In addition to the lockdown in California, there were many depressing macroeconomic data. For example, industrial production in Japan (-26.3% in May compared with the same period last year) and the UK (6%, which is actually equivalent to a strong drop, since these data are relative to the previous month, manufacturing production in the metric year / year decreased by 22.8%), Singapore's GDP in the second quarter fell into the abyss (-41.2%), and in the UK the situation is slightly better (1.8% compared to the previous month is all almost a 20% drop compared to the same period last year). The data from the Eurozone was not very pleased either (economic sentiments, according to ZEW data, was much lower than forecasts), which, however, did not prevent the euro from growing (expectations of EU summit on Friday). Yesterday, the earnings season began in the United States. Banks started with their financial reports. The overall results can be summarized as follows: those who had large trading departments were able to relatively withstand the lockdown (JPMorgan), but those who were totally dependent on the traditional banking business suffered more than noticeably (Wells Fargo). In general, the losses of banks from traditional business are enormous - almost each of the banks wrote off about $ 8 billion for possible loan losses. These are the highest marks since the global financial crisis. Today promises to be no less eventful. The Bank of Japan has already announced the results of its meeting: the rate was left unchanged. The Bank of Canada will announce its decision later. In addition, we are waiting for data on inflation in the UK, as well as industrial production in the United States. From the conditional positive of yesterday, at least for the oil market, we can consider the OPEC report, in which the cartel was relatively optimistic about the market prospects in the foreseeable future. But this positive can be dispelled today by the decision of OPEC + to increase production by 2 million bpd. Yes, and the markets traditionally took the opportunity to increase optimism - the news about the next round of vaccine trials from Moderna.
DJ:DJIShort
by Trade24Fx
1
UK GDP and other data, bank earnings, OPEC outlookAs we noted in yesterday’s report, this week is going to be exceptionally eventful. Yesterday's events in the US stock market - a clear confirmation of this. And this is just the beginning. Tuesday should be another proof, because today fully starts the earnings season and many important macroeconomic statistics will be published. As for the data, China has already reported international trade data (imports grew by 2.7% and exports by 0.5%), which once again indicates that the Chinese economy is feeling yourself relatively good. This cannot be said about Japan: industrial production in May collapsed by 26.3% compared with the same period last year. Next, we are waiting for data on UK GDP and industrial production for May (do not flatter yourself with forecasts that expect growth rates: this growth relative to the previous month, and relative to May last year, it will most likely be a decrease of 15-20%). Recall that our position on the pound is to look for points for its sales in the foreign exchange market. This can be done both against the dollar and against the euro. The day will continue with data on consumer inflation in Germany and USA, as well as industrial production in the Eurozone. In addition, OPEC is due to release its monthly oil market review on Tuesday. Considering that the OPEC + meeting will take place in the middle of the week, at which they will decide to extend the reduction by 9.7 million b / d further or not, this week will be difficult for the oil market. Our expectations are that they will not extend (this means that since August the supply in the oil market will grow by 2 million bpd), and the report will have concerns about the growth of oil demand, which together gives reason to recommend oil sells from current prices. And finally, the earnings season. According to analysts, it will become the worst since the global financial crisis (and maybe even worse). Today, before the markets open, banks will report and it is very likely they will set the pace for this week and even the entire earnings season.
DJ:DJIShort
by Trade24Fx
3
Week in a Glance: optimism, pandemic and earnings season aheadThe main result of the week was new historical highs in the Nasdaq Index. The reason for the sharp rise in optimism on Friday was information from Gilead Sciences about the latest test results for remdesivir, which, according to their data, reduces the risk of death from coronavirus by 62%. Oil was added to the fire by Biontech, saying that they are ready to provide the vaccine by December (meaning to submit it to regulatory authorities). All this, of course, is great. But buyers clearly do not ask themselves one simple question: what to do here and now, when last week a new absolute maximum was recorded in the number of new cases in the world and the USA in particular. Today this is more urgent issue, since a week or two of such a tendency and lockdown No. 2 will become real. Also, none of the buyers seem to be interested in the dynamics of bankruptcies: their number continues to grow and we are not talking about small companies, but about entire networks of retail trader, restaurants, gyms, etc. Last week, the legendary Brooks Brothers filed for the Bankruptce, and Ascena Retail Group Inc (Ann Taylor, LOFT, Lou & Gray, Justice, Lane Bryant, Catherines and Cacique brands) plans to file for bankruptcy. Other names include Rosehill Resources Inc., Sur La Table, Lucky Brand Dungarees, Muji, G-Star RAW USA and many others. This week will be fulfilled with important events: ECB, Bank of Japan and Bank of Canada will provide us with their decisions. In addition to important macroeconomic statistics such as China’s GDP for the second quarter, UK GDP for May, US retail sales for June, we are waiting for the start of the earnings season in the US for the second quarter. The earnings season promises to be the most disastrous in history. That is why we have until recently recommended and still recommend sales in the US stock market despite its growth. Total overvaluation, multiplies by disastrous data of corporations will become the last straw that will fill the cup of patience and the bubble will go to the stage of collapse. Traditionally, banks will be the first to report. Recall that last quarter, the drawdown in their profits ranged from 50% (CitiGroup) to 90% (Wells Fargo). And this is according to the results of the quarter, when the US did not yet have an epidemic and lockdown. So there is every reason to expect losses in the second quarter, when the economy showed the largest drop in history.
DJ:DJIShort
by Trade24Fx
10
Jobless claims, Lockdown #2 and earnings season aheadFrom the point of macroeconomic statistics, the main event of yesterday was the publication of weekly data on jobless claims in the United States. New applications were submitted by 1.3 million, while the total number of unemployment beneficiaries is still above 18 million. What these numbers are talking about is basically: there is no quick economic recovery. Recall that the labor market is one of the most sensitive segments, and weekly jobless claims are in fact the most closest to real-time data, and they say that a month after the start of the reopening of the US economy, the situation in labor market continues to be unprecedentedly bad. So we continue to swim against the tide and recommend sales in the US stock market. Well, recall that the earnings season in the United States starts next week, which will almost certainly be the worst for all time observations. It will be extremely interesting to observe the actions of bulls in the US stock market. How easy will it be for them to buy at historic highs when companies report a fall in profits of 50% or even 100%, as well as a two-digit decrease in revenue. And let’s not forget about the pandemic. The number of new cases in the world yesterday showed a new absolute maximum. The situation in the USA continues to raise concerns of “lockdown No. 2”: for two consecutive days, the number of new cases there has exceeded 60K. According to the chief infectious disease specialist Faucci, the situation is developing exponentially again, which means that his forecast of 100K, announced last week, remains relevant. Our trading positions for today are unchanged: we are looking for points to buy the dollar, especially against the British pound, we will sell in the stock markets, as well as in the oil market.
Short
by Trade24Fx
2
Gold records, US unemployment, oil status quo Looking at the dynamics of stock markets, it seems that the global economy is experiencing its best times. At the same time, an analysis of macroeconomic statistics indicates that times are just the worst in history. Who is right? We propose to use gold and the dynamics of its prices as an arbiter. So yesterday, the asset rose above the $ 1800 mark (the highest prices since 2011). In our opinion, this is vivid evidence in favor of the fact that everything is far from being as good in the “Danish kingdom” as it seems, if you look at the dynamics of stock markets. Recall that gold is traditionally considered a safe haven asset and a sharp increase in demand for it (the inflow of funds into gold ETFs this year has already exceeded the maximum levels recorded in 2009) is one of the signs that investors are scared. And given that gold has approached historical highs, investors are apparently very scared. Another reason for concern, the markets may receive today after the publication of data on jobless claims. The increase in the number of unemployed will be a serious reason for the growth of fears. In our opinion, this is quite a likely scenario, given that many states are curtailing programs to open economies. According to official data, US oil reserves grew by 5.6 million barrels for the week, but given that they fell by 7.2 million barrels last week, markets did not use this data as a reason to sell the asset. In general, the status quo in the oil market is maintained, and we continue to recommend sell oil at current prices with small stops. As for the other positions, we note that the dollar came close to its lower limits against most currencies, so the sale of EURUSD, GBPUSD or AUDUSD seems to us to be great deals today. But with small stops, since a breakdown of the lower border of the dollar could provoke massive selloffs.
Short
by Trade24Fx
GBP/USD: Fundamental and Analysis: More bullish yet!!!Hello, in this technical analysis the conduct of Sterling is so bullish for mid-term as short-term. Studying the fundamentals, there are a nice favorable of this currency while the bad fundamentals for US Dollar. So, in Daily we are into the making a pull back and then I proyect that easily Sterling it''s can to reach at the mark of $1.28 USD, and why not to above of $1.30 USD. So, guys in mid-term we see a Sterling so bullish about the speculation of Brexit and UK is prepare about this speculation. Now, in H4 timeframe we continue up and this morning I entry in the $1.2538 for long position until the $1.28 USD to find up 264 pips in some days. So, Sterling Pound is so bullish so so but so bullish for mid-term about and based in my fundamentals that I write on my notebook. So, the fundamentals to take in noticed is down here: 1. Fortnight lows for EUR to Pound Exhange Rate ahead of UK summer statement 2. EUR to Pound exchange rate steadies lower ahead of UK Chancellor's Statements 3. There are a fears of a second round of coronavirus infections continue to rise, and this is weighing on the EUR to Pound Sterling exchange rate. 4. But still, EUR outlook remains stronger than the pound outlook so these losses may prove temporary 5. Otherpoint is that EUR exchange ate steadying lower as market await European Union fund developments 6. Concerns that the coronavirus recovery won't be as much of a rebound as previously hoped have been withing on the EUR over the past week. 7. As signs of a secound wave amid surges of infections in the US and some parts of Australia, investors have been less optimistic about a global recovery. 8. Pound exchange rates edging higher on Brexit Speculation 9. Since last week, fresh speculation that UK-EU relationship about the brexit negotiations is could see productive developments this month have been supporting sterling 10. Pound to US Dollar exchange rate dips as risk sentiment of drops on rising US covid 19 cases more yet. So, in my conclusion, that fundamentals make a Pound so bullish then another pars: 1. EUR/GBP: Bearish sentiment 2: GBP/USD: Bullish sentiment 3: GBP/JPY: Bullish sentiment 4: GBP/AUD: Bullish sentiment 5: GBP/CAD: Bullish sentiment So, technically are bullish the GBP all pars, but some important that maybe of these list there are not bullish, but some important is always to make a technical analysis. But in based on fundamentals, GBP is so bullish for mid-term about the bad news that leave of US covid 19, speculation of brexit is prepared to trade the UK and European Union relationship, and othepoint to take in noticed!!!
Long
by harisonhbn9718
Forecasts revisions, US closing again, NovavaxYesterday, the financial markets were relatively calm. In the morning, the euro was under pressure. The reason was the revision of forecasts for the Eurozone economy by the European Commission. Traditionally, for the last time, the revise goes for the worse: a reduction of 8.7% is expected. It is difficult to disagree with these forecasts, especially if you look at the statistics on industrial production in Germany, also published yesterday. With forecasts of industrial production growth in May by 11.1% m / m, the fact of growth was only 7.8% m / m. Why is it bad? Well, because this is a figure relative to last month, when the fall was 17.5%. If you look at what is happening relative to the same period last year, we have a decline of almost 20% (!). This is about the quick recovery of the economy (Germany in May actively reopened). Meanwhile, more cities and the United States are turning off plans for re-opening and closing again. Yes, so far we are not talking about a complete lockdown, but the restrictions are increasing every day. There are enough reasons for this: the number of cases is close to 3 million people, and the new daily cases are above 55K. At the same time, an increase in the number of cases is observed in 41 US states. Against this background, the statements by the head of the Atlanta Federal Reserve Bank that the US economic recovery is in trouble look more than logical and appropriate. Novavax pulled out a lucky ticket in the form of a reward from the US Government in the amount of $ 1.6 billion for the development and manufacture of the vaccine. The government wants to see the result in the form of an established production process by January. This is a question about the timing when the vaccine may appear on the shelves. The rally in the Chinese stock market continues, as, indeed, the rampant growth of Tesla shares. Well, the harder they would fall.
DJ:DJIShort
by Trade24Fx