YEN, AUD, US-CHINA TRADE WAR, GERMAN ZEW, FED, S&P 500 – TALKING POINTS:

  • Yen pulls again, commodity FX rise as Trump talks up China commerce deal
  • German ZEW report, Fed commentary would possibly revive risk-off momentum
  • S&P 500 chart positioning hints at ample room for additional liquidation

The Japanese Yen traded broadly decrease in Asia Pacific commerce, retracing a few of the floor gained yesterday amid explosive danger aversion. The anti-risk forex posted the most important rise in two months as US-China commerce struggle escalation roiled the markets. On the opposite aspect of the sentiment spectrum, the sentiment-geared Australian and New Zealand {Dollars} recovered a bit.

GERMAN ZEW DATA, FED COMMENTARY MAY RE-ENERGIZE MARKET SELLOFF

This temporary enchancment appears unlikely to be lasting. US President Donald Trump offered a bit of encouragement, suggesting he remained optimistic in regards to the probability of a take care of Beijing. Which will have helped brighten the temper a bit, however related rhetoric over many months of negotiations however resulted within the present predicament. Markets might deal with such jawboning cautiously this time round.

Incoming European knowledge circulation and Fed commentary would possibly encourage a return to risk-off commerce. Germany’s ZEW survey of analyst sentiment might disappoint expectations for a slight enchancment if respondents seem to fret about on-coming US auto import tariffs. Mr Trump should resolve whether or not he’ll set off them by the tip of this week. On the whole, Eurozone releases have tended to fall wanting forecasts just lately.

In the meantime, New York Fed President John Williams is scheduled to talk. He has emerged as one thing of a bellwether on the rate-setting FOMC committee, making his markets notably attention-grabbing for merchants. Echoing the decision for a wait-and-see method favored by Chair Powell at a time when jittery markets are pining for stimulus could also be met with a frosty reception from traders.

What are we buying and selling? See the DailyFX staff’s top trade ideas for 2019 and discover out!

CHART OF THE DAY – US STOCK INDEX FUTURES HINT RISK-OFF BIAS TO HOLD

Yen May Resume Climb as German ZEW, Fed Comments Spook Markets

Observe-through on the bearish double prime reversal in S&P 500 futures continues to play out as expected. Costs prolonged decrease to problem the 2807.50-24.25 space after gapping beneath the barrier famous within the 2865-79 area. An additional downward push from right here targets minor hurdles at 2747 and 2677, however the subsequent layer of great help doesn’t emerge till the 2600 determine.

That appears to trace at ample room for continued re-risking within the close to time period. This most likely implies scope for additional features within the anti-risk JPY and USD whereas cycle-sensitive commodity bloc currencies like AUD and NZD bear the brunt of promoting strain.

FX TRADING RESOURCES

— Written by Ilya Spivak, Foreign money Strategist for DailyFX.com

To contact Ilya, use the feedback part beneath or @IlyaSpivak on Twitter





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