6 hours ago | August 1st, 2014 16:06:35 GMT

Friday ends a bad week for European stocks

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Those storm clouds I mentioned yesterday might be cracking open now.

  • FTSE -0.7% today -1.65% on the week
  • Cac -1.0% today -2.95% week
  • Dax -2.1% today -4.50%
  • Ibex -1.8% today -3.44% week
  • FTSE Mib -1.0% week -3.33% week
  • PSI 20 -3.0% today -10.46% week

European bonds

  • Italy 2.76% +7bp
  • Spain 2.56% +6bp
  • Portugal 3.70% +9bp
  • Germany 1.13% -2bp

Stocks are in a whole heap of trouble and we’ll need to watch how weak or strong bounces are. Any that are met with heavy selling and reversed will signal further downside to come. This is proper knife catching territory and it can suck you in. The trend is your friend and stocks might be making a new one.

I wish you all a very good weekend and will see you on the other side.

0 comments

6 hours ago | August 1st, 2014 15:43:32 GMT

The winner of the August non farm payrolls competition is

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Fredy Mendes who just beat Kamalakar to the number by 4 hours 15 minutes

The “close, but no cigar” brigade this month was;

  • Marie 208
  • Vlad 210
  • Claudio 210

Well done Fredy. The prize is still to be decided but send your details to info (at) forexlive (dot) com

We also want to thank previous winners who are still awaiting prizes for your patience. We know who you are and we will make good on them as soon as we can.

Thank you to everyone for playing and well done to our winner. Janet will be proud.

rocky

Rocky Balyellen

 

1 Comment

7 hours ago | August 1st, 2014 15:00:40 GMT

WTI down to the lowest since 18th March as it tests $97.00

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The 18 March lows mark a possible last line of defense before a more sustained move lower. We held up at the 61.8 fib of the Jan/Jun lo/hi at 97.56 yesterday but that’s gone now.

WTI crude daily chart 01 08 2014

WTI crude daily chart 01 08 2014

97.00has been a historical S&R point and a break has the ability to see a quick run down to 95.00. Much further down the big level is 91.20-91.60 area and one to watch if we run that far. Brent has also broken out of the July range and is testing the October 2013 support line at 104.75. We bounced from a first test but it’s under pressure again. 103 marks an important point before a fall towards the 100 mark.

Brent Daily chart 01 08 2014

Brent Daily chart 01 08 2014

We’re being driven by demand worries rather than geopolitical fears but they are still bubbling under the surface. I’m going to look to play a small long here in Brent if we hold that support line. If we break then I may look at a short if the line holds on a retest.

4 Comments

7 hours ago | August 1st, 2014 14:48:54 GMT

There goes the buck

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USD/JPY is at the lows of the day at 102.55 after stubbornly hanging onto the post-NFP lows for a couple hours.

Like I wrote earlier:

USD/JPY has risen for 10 consecutive days heading into today. To sustain that kind of altitude you need rocket fuel from the headlines but non-farm payrolls were an anchor.

I don’t think the fall today should be seen as any kind of Fibonacci retracement or a fall back to the 200-dma at 102.18 is something I expect.

USDJPY retracement target

USDJPY daily

16 Comments

8 hours ago | August 1st, 2014 14:13:08 GMT

Hilsenrath: Fed has “quietly encouraged” view of no hike until mid-2015

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Am I the only one who thinks Hilsenrath has lost his edge since Yellen took charge?

Anyway, he’s out with his post-NFP write up in the WSJ.

He notes that the report fits with Yellen’s narrative of people coming into the market to restrain jobs growth and said the Fed is in no rush to hike:

When last surveyed in June, officials said they didn’t expect to move to raise interest rates until 2015, and officials have quietly encouraged the market’s view that they won’t move until the middle of the year.

5 Comments

8 hours ago | August 1st, 2014 14:00:07 GMT

June 2014 US construction spending -1.8% vs 0.5% exp m/m

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That’s a pretty ugly number right there.

Big falls in public spending which was -4.0% vs +1.6% in May and -2.9% vs a year ago. Private spending was-1.0% vs +0.4% prior, +9.2% y/y

US construction spending details 01 08 2014

US construction spending details 01 08 2014

Even with the poor headline there’s still some decent year on year growth, though public spending could be doing better.

US construction spending y/y 01 08 2014

US construction spending y/y 01 08 2014

 

 

1 Comment

8 hours ago | August 1st, 2014 14:00:02 GMT

July ISM manufacturing index 57.1 vs 56.0 expected

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Highlights of the ISM manufacturing index for July:

  • Highest since April 2011
  • Prior reading was 55.3
  • Prices paid 59.5 vs 58.0 prior
  • New orders 63.4 vs 58.9 (highest since Dec)
  • Employment 58.2 vs 52.8 (highest since June 2011)

The key sub-indexes are especially strong.

ISM manufacturing July 2014

ISM manufacturing July 2014

The US dollar is proving tough to keep down.

0 comments

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