US jobs data showed a little weakness last month, I wonder why??? Pht. Interestingly the month of August was revised from +169K to +193K and the rate dropped from 7.3 to 7.2%, this is the silver lining that I see in the data. It is doubtful that it is enough for the Fed to commence tapering next week but with Uncle Ben running the show anything can happen. Next year will be even tougher with Yellen at the helm, lordy lordy help us.
Predictably the markets reacted strongly to the data. The US$ which is already oversold got spanked further with all currencies running hard against it. The Loonie and Yen not as hard as weakness in ¥ continued and oil got pushed under 98. Other commodities fared better with gold up almost 2% and copper 1%.
US stocks are having a stellar run thanks to the free cash Uncle Ben is giving all the merchant banks (you and me don’t see the dollars he prints, there is no trickle down system in the land of the free, the top 11% keep the 90% of the wealth), with the S&P500 cycling beautifully along its 50ema for 12 months and is up 23% so far. Best ever was in 2003 with a 26.4% gain in 12 months. So, this is not a bad result, but a scary one considering that the US companies results are not spectacular like they were 10 years ago, and US growth is well below trend. Uncle Ben has a lot to answer for, but he will most likely be 6 feet under and enshrined before the US wakes up to the damage being done. Some people have seen the issue as VIX was up 1.3% overnight, buying insurance against a potential fall.
DATA HIGHLIGHTS TODAY – AUD CPI. UK Monetary Votes. CAD Monetary Policy & Rates.
AUDUSD – Closed at 9706 just above resistance and 50% fib. Again, thanks only to the US$ weakness is the Aussie strong. So overheated it is disconcerting and I would love to sell it but cannot find an entry just yet.
EURUSD – Similarly this is overdone as it reaches up to touch the fib level of 1.3801. Can’t buy it can’t sell it, move along to the next one.
GBPUSD – Rallied hard too but didn’t make HH’s, 1.63 looks too scary for the cable to go and touch
NZDUSD – Another one that is benefiting from Uncle Ben’s destruction of his currency. HH’s yes, above resistance, yes. Still I would be looking to sell it rather than buy this.
USDCAD – A lost Loonie sounds like a book title doesn’t it, however it is not as exciting as that, the Loonie is indeed lost as it battles two forces of falling greenbacks and oil forcing it to post an engulfing seller bar. Zero interest in this.
USDJPY – Yawnnnn
GOLD – Finally a break of trend! Lovely jump of over 20 buckeroos. Lets see if the technicals can meet up with the fundamentals and stay above the 50ema this week.
David Long / Proprietary Trading Manager