STATE OF THE MARKETS
Mixed equities in cautious trading. Major US indexes retreated Monday, except Nasdaq, when investors decided to take cautious trading to the front. Though optimism level increased, more profit taking and hedging were seen as the 10Y yield slipped, to close 4.5 basis point lower than Friday; when more than $89b flows to the US Treasury for safe-haven.
Crude oil edged lower, to close below $45.80/barrel, as investors worry that the new lockdown measures in California might spill over to other states and affect demand. Though vaccines are on their way, the coming winter months could elevate new cases and weigh on the economy further. Gold continue its upward trajectory, with minor pullback, as safe-haven flows is back in trend.
The risk-off was evident when Yen, Swiss and Dollar took the lead in demand for the short-term accounts; while Aussie retreated and gave way to Swiss in the long term accounts. The greenback gained traction in the medium term against the Kiwi and Sterling as investors remain skeptical of a successful Brexit deal before the year end.
G8 CURRENCIES SENTIMENTS
** ST refers to Short-Term which is daily turnover, MT is Medium Term which is
weekly and LT refers to Long-Term which is monthly turnover.
WALL ST MOST ACTIVE
|VOLUME||90 DAYS AVG|
** % Change here refer to price vs previous day price
WALL ST TOP FLOWS
|% CHANGE||FUNDS FLOW $|
** % change here refers to volume vs. 20 days average volume.
TOP 5 BLOCK ORDERS
|CL||45.80 – 45.84||crude oil futures||750||34.3M|
|RP||0.9132||FX futures/euro pound||450||54.9M|
|RY||126.31||FX futures/euro yen||811||98.5M|
|ZT-ZB||110.135 – 171.270||US bond futures||7,000||89,321.5M|
OUR PICK – CAD/JPY
Speculative CFTC data showed increasing CAD/JPY net short. Recent CFTC data showed that CAD shorts increased by $346m while JPY longs increased by $875m, second after AUD shorts that increased by $408m. This is also inline with long term sentiments that turned bearish CAD/JPY by one block. Fundamentally, this could be fear of falling oil demand as well as flight to safety. Technically, the pair is capped by long term 55 weeks MA and should remain closed below 81.50 on the daily chart (cut loss point) for this trade to remain valid. Hard stop at 82.00 with 81.00 and 80.50 targets and will revisit if the long term bearish sentiments remain.
This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.