Forex Market Commentary
Fed Chair Janet Yellen has given the strongest possible hint today of US interest rates arising by 25 basis points in the next 4-8 weeks.
Wall Street did not swoon. This is a game changer. We now have strong evidence that US corporates can fare well enough with a mildly appreciating interest rate climate as evidenced by strong US retail sales, strong housing data and oil consumption. Recent economic data coming out of the US all indicate that Summer 2016 is going to be a great Summer and so the US Fed now has the window to raise rates to temper any possibility of inflation reaching it's target of 2%
All this upbeat economic data has sent the USD value soaring by near 5% the last week.
Economic data now suggests that US new home sales spiked to a more than eight-year high in April 2016 . New home sales, which accounts for 10% of the housing market, jumped a massive 16.6% to an annual rate of 619,000 units, The National Association of Realtors (NAR) reported that existing home sales climbed 1.7% in April 2016. These are very strong signs that the US consumer is faring well andthis supports US equities prices.
Wall Street did not swoon. This is a game changer. We now have strong evidence that US corporates can fare well enough with a mildly appreciating interest rate climate as evidenced by strong US retail sales, strong housing data and oil consumption. Recent economic data coming out of the US all indicate that Summer 2016 is going to be a great Summer and so the US Fed now has the window to raise rates to temper any possibility of inflation reaching it's target of 2%
All this upbeat economic data has sent the USD value soaring by near 5% the last week.
Economic data now suggests that US new home sales spiked to a more than eight-year high in April 2016 . New home sales, which accounts for 10% of the housing market, jumped a massive 16.6% to an annual rate of 619,000 units, The National Association of Realtors (NAR) reported that existing home sales climbed 1.7% in April 2016. These are very strong signs that the US consumer is faring well andthis supports US equities prices.
Please turn to Bloomberg for global bond yields:
http://www.bloomberg.com/markets/rates-bonds
In my global macro analysis the major barometers I am look at for 2016 are as follows:
USDX 95.750 +0.611 +0.79%
USD is set to for further appreciation with a possible US interest rate hike 25 basis points in July. Long positions are in play with a view to testing the 100 mark by the end of the year.
EUR/USD 1.11150 -0.00735 -0.66%
Outlook is now short. We are now approaching June and the ECB is going to face increasing pressure around the UK vote later in June. Hedge funds will be looking to capitalize on this pressure.
GBP/USD 1.46215 -0.00505 -0.34%
The vote is coming and anything can happen it is best to wait and observe and trade the aftermath. Shorts will come into play in June as hedge funds will seek to pressure Sterling and then switch to long on the assumption that a Yes vote appears.
10 yr US T-Notes 129.390625 -0.421875 -0.33%
Shorts are now in play. The bond markets especially the 10 and 30 year look very vulnerable with the increasing rhetoric around the US interest rate base.
Crude Oil 49.54 +0.06 +0.12%
US stockpiles are down and the market has jumped on the assumption that the US economy is about to set off with a jump. With the slide at 48 looking for a quick long entry after the ISM data and jobs data with a view to a run at the 55.
Gold 1212.975 -5.510 -0.45%
Shorts in play with no sight of support given the new interest rate hike climate we should see the 1050 support come under test somewhere in July.
SP500 2099.06 +8.96 +0.43%
We are now just shy of the all time highs and closing on Friday like this after a great week is very significant especially since Monday is Memorial day and markets are shut. Global money is now piling into US equities now we know that its only a matter of a few weeks before the next US rate hike. This is a major bull move signal in the making.
Dow 17873.22 +44.93 +0.25%
The Dow has shot up as global funds bid up US equities prices to earn superior yield/ dividend. The recent dip has shown some good entry points for global funds to enter the US stock markets.
VIX 15.40 - 0.42 -2.69%
Options volatility in the equities markets is very important to understand; the lower the VIX the higher the potential for underlying price growth.
Always use your own better judgment and try to build a picture of trade logic combining both technical and fundamental understanding.
http://www.bloomberg.com/markets/rates-bonds
In my global macro analysis the major barometers I am look at for 2016 are as follows:
USDX 95.750 +0.611 +0.79%
USD is set to for further appreciation with a possible US interest rate hike 25 basis points in July. Long positions are in play with a view to testing the 100 mark by the end of the year.
EUR/USD 1.11150 -0.00735 -0.66%
Outlook is now short. We are now approaching June and the ECB is going to face increasing pressure around the UK vote later in June. Hedge funds will be looking to capitalize on this pressure.
GBP/USD 1.46215 -0.00505 -0.34%
The vote is coming and anything can happen it is best to wait and observe and trade the aftermath. Shorts will come into play in June as hedge funds will seek to pressure Sterling and then switch to long on the assumption that a Yes vote appears.
10 yr US T-Notes 129.390625 -0.421875 -0.33%
Shorts are now in play. The bond markets especially the 10 and 30 year look very vulnerable with the increasing rhetoric around the US interest rate base.
Crude Oil 49.54 +0.06 +0.12%
US stockpiles are down and the market has jumped on the assumption that the US economy is about to set off with a jump. With the slide at 48 looking for a quick long entry after the ISM data and jobs data with a view to a run at the 55.
Gold 1212.975 -5.510 -0.45%
Shorts in play with no sight of support given the new interest rate hike climate we should see the 1050 support come under test somewhere in July.
SP500 2099.06 +8.96 +0.43%
We are now just shy of the all time highs and closing on Friday like this after a great week is very significant especially since Monday is Memorial day and markets are shut. Global money is now piling into US equities now we know that its only a matter of a few weeks before the next US rate hike. This is a major bull move signal in the making.
Dow 17873.22 +44.93 +0.25%
The Dow has shot up as global funds bid up US equities prices to earn superior yield/ dividend. The recent dip has shown some good entry points for global funds to enter the US stock markets.
VIX 15.40 - 0.42 -2.69%
Options volatility in the equities markets is very important to understand; the lower the VIX the higher the potential for underlying price growth.
Always use your own better judgment and try to build a picture of trade logic combining both technical and fundamental understanding.
Pieter Bergli - Trader X16
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