Morning Brew June 28 2021
Senior Relationship Manager
Summary: Traders complain about dull markets - Options interestingly cheap
The Dow and the S&P could rise on Friday by 0.7 and 0.33%, the Nasdaq fell slightly by 0.06%. Banks were allowed to pay dividends and buy back shares again. Over the weekend there was little movement as rising corona cases in certain areas puts traders on edge and offsets he positive impact that comes from the US Infrastructure package.
The USD Index trades at 91.83. Bitcoin at 34.400 and US 10 year rates at 1.5290. Gold and Silver rose to 1782 and 27.15 and EURUSD fell to 1.1905.
Volatilitiy has fallen to rather low levels, the 1 month Vol in EURUSD trades at 5.07, GBPUSD at 5.72 and Silver has fallen to 25%. Traders are complaining about the lack of movement (compared to the swings last year, it is a little quiet), buying options to be set up for the occasional sharp move like we had in the Fed decision may be worthwhile.
Oil has risen to the highest level since Q3 18 and 75.77 is the next resistance.
Ole Hansens COT Report: The accelerated metal selling that followed the # meeting drove down # longs by 33% to 76k lots, a seven week low and # by 36% to 29k while the # (-81%) returned to neutral. # long cut to one-year low. Speculators cut the bullish #grains bets to a 9 month low in week to June 22 with biggest reduction in #soybean (-25%) and bean oil (-22%) followed by #corn. Bucking the trend was #wheat which flipped back to a small net long.
- Didl is closing the books for the IPO a day early.
- UBS Ceo HAmers stated the recently reported job cuts were limited to certain areas and were headcount neutral as staff was being added in other places.
We are approaching a decent number of Futures and CFD expiries this week:
NGN1 will expire 28th June at 15:00 GMT.OJN1 will expire 29th June at 12:15 GMT.
HGN1, KEN1, PLN1, RRN1, SILN1, SIN1, ZCN1, ZLN1, ZMN1, ZSN1, ZWN1 will expire 29th June at 15:00 GMT.
HON1, RBN1, SBN1 will expire 30th June at 15:00
COPPERUSJUL21, CORNJUL21, GASOLINEUSJUL21, HEATINGOILJUL21, PLATINUMJUL21, SILVERJUL21, SOYBEANMEALJUL21, SOYBEANOILJUL21, SOYBEANSJUL21, SUGARNYJUL21, WHEATJUL21 will expire 28th June at 15:00 GMT.
OILUKAUG21 will expire 30th Jun at 15:00 GMT
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.