FX Trader, Loonieviews.net
WTI Oil prices are trading at elevated levels in New York with prices bouncing between $68.30-$69.35/barrel. News of supply disruptions has offset Friday's announcement by Opec of a 600,000-to-one million barrel crude production increase. Suncor’s Syncrude oil sands facility in Fort MacMurray, Canada, which produces about 360,000 barrels/day, has shu down due to a power outage and may be down for all of July.
Production issues in Venezuela and Angola are also supporting prices.
Wall Street opened on a sour note. Trade tensions have knocked the three major indices lower to start the day led by a 278.9 point drop in the Dow Jones Industrial Average. US-listed Chinese stocks were heavily traded after the Wall Street Journal reported that President Trump was contemplating blocking new technology exports to China as well as putting restrictions on Chinese investments.
The 6.7% jump in US New Home Sales change for May was larger than forecast, but went largely ignored by traders.
FX markets have been jittery with USDJPY dropping in the wake of the morning plunge in equity prices and lower US Treasury yields (the 10-year yield is down 1.06%). USDJPY was already soft at the New York open, and it extended those losses in morning trade. A break below support at 109.40 would lead to a retest of 108.50.
FX traders will monitor Wall Street developments and trade headlines today while waiting for speeches from a number of central bankers later in the week.
The plunge in US equities has also nipped a nascent EURUSD rally in the bud. Prices peaked at 1.1700 and have eased back to 1.1682. The intraday EURUSD technicals are bullish while prices are trading above 1.1640, looking for a break of resistance at 1.1725 to extend gains to 1.1825. A break below 1.1640 targets 1.1550.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
