We’re starting the new trading week with stability. U.S. stock futures are pointing to a positive open after selling off sharply on Friday thanks in part to the recovery in Asian and European equities.
Treasury yields are also pointing higher, supporting the rally in the greenback.
The dollar is up against most of the major currencies with the exception of sterling and the New Zealand dollar. Investors still believe or at least hope that trade tensions between the U.S. and China amounts to nothing more than posturing as no sanctions have gone in effect and so far there hasn’t been further antagonism from China.
The euro is under pressure from softer German trade data while the New Zealand dollar is benefiting from AUD/NZD, which has fallen to a 1 year low. Sterling on the other hand is up thanks to stronger house prices and a rise in Gilt yields.
Keep an eye on the headlines as geopolitical risks remain the key focus — we could get a NAFTA deal this week and increased tensions with China.
The main themes I see today are:
+USD
+GBP
-CHF
-EUR
-JPY
Trading Biases
+USD,+GBP
-EUR, -CHF, -JPY
mildly -NZD
neutral CAD, AUD
Today’s Initial Trades
Here’s the summary —
1. Buy USDCHF at .9606, Stop at .9578, Target .9634
2. Buy USDJPY at 107.13, Stop at 106.85, target 107.41
3. Buy GBPCHF at 1.3545, Stop at 1.3517, Target 1.3573
4. Sell EURNZD at 1.6843, Stop at 1.6871, Target 1.6815
Close ALL open day trades by 10:20AM NY / 15:20 GMT
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