All Set Go!
Algos now handle more than 75% of the trading in FX as per Bloomberg. Thats probably the reason why it has been years since we saw real opportunities in FX - there are only dead zones & quiet markets
Markets largely tuned out on politics- fatigue of closely reading political headlines and ending up battling with frustrating price action - so back to watching Powell today especially the tone and cadence of his answers around inflation & jobs. (at times the written testimony is released early) - Powell to certainly talk about New York Fed Inflation expectations -which ticked down to 3% down 0.2 percentage point from May- and
The low tier June’s ETI Data (very few would have heard of this) shows US employment trends 110.27 vs 111.44 prev - suggests that the labour market will only cool modestly - as long as companies are willing to retain workers, net nonfarm payrolls are likely to remain positive.
Equity markets possibly reaping the gains on account of structural shift currently under way in US economy - Consumer to Capex - add the expected productivity gains on account of generative AI - mix is explosive - for statistical flavour, since 1954, when U.S. indices gain more than 10% in first half, its return averages 7.7% over the next six months. And it has been higher roughly 83% of the time -
The French political backdrop is primed for instability and potential shocks. EURUSD hanging by a thread - Thursday's 1.0783 low has to break as Yesterday's 1.0842 high holds.
Reports say China didn't buy gold in June in a continuation of the reserve freeze from May. The once-every-five-years Third Plenum- July 15 - 18 - milestone moment- new term was coined for the meeting - “new quality productive forces” - whatever that means.
June UK consumer spending fell, capped by bad weather. Starmer believes he can improve the Brexit deal. The 1.2845 high on Monday and the 1.2859 June high should resist for fall towards 1.2750.
WSJ article says Japan could direct its govt pension fund to move some assets out of Foreign Currencies and into Yen assets back home - Total fund is $1.6T - 25% in foreign bonds and 25% in foreign equities, so roughly about $800 bio- no perceptible change in USDJPY direction - Intervention risk is low - 160.50 161 50.