STATE OF THE MARKETS
Stocks advanced on thin volume. US stocks advanced on Monday after a rebound last week, amid weaker Dollar and falling yields.. Dow (+0.54%), Nasdaq (+1.41%), S&P (+0.99%) including Russell (+0.54%) climbed higher but volume was thin as investors remained cautious. The Fed reiterated it’s easy policy that saw 5Y (0.81%), 10Y (1.61%) and 30Y (2.30%) yields lower.
Crude futures continued its rebound after Friday, closing above $66.00/bl, after Goldman Sachs saw growth in demand, even after Iranian supplies. $80/bl is the target. On another note, gold was running on exhaustion in profit taking as it approaches the $1,900/oz psychological mark. The yellow metal settled above $1,881.00/oz, as New York closed.
In the FX space, the risk tone is mixed as the safe haven Swiss and Yen are all over the place, while King Dollar remains on offer. Long and medium term investors continue to seek yields in Loonie while bidding the undervalued Sterling. There is a short-term run to Kiwi and Aussie, though medium and long terms mostly on offers. The Euro seemed mixed.
G8 CURRENCIES SENTIMENTS
** ST refers to Short-Term daily turnover, MT is Medium Term weekly
and LT refers to Long-Term monthly turnover.
WALL ST MOST ACTIVE
|VOLUME||90 DAYS AVG|
** % Change here refer to price
WALL ST TOP FLOWS
|% CHANGE||FUNDS FLOW $|
** % change here refers to volume
TOP 5 BLOCK ORDERS
|SYMBOL||PRICE / STRIKE||TYPE||VOL/OI||FUNDS FLOW $|
|BLDP||16.25 / 13.00||stock options/put||447.35||58.6M|
|SPCE||26.89 / 24.00||stock options/put||132.13||3,517.3M|
|FSR||12.54 / 15.00||stock options/call||94.07||139.9M|
|ZB||157.2300||US bond futures||3,517||55,297.8M|
|CL||65.65 – 66.00||crude oil futures||4,200||276.1M|
OUR PICK – EUR/GBP
Yields favored Sterling. There is no doubt that positive yields, no matter how small, are still better than negative yields. But of course, yields are not the only factors that move currencies. At this point, only 10Y and 30Y Italian yields are superior to the UK gilts. Anything of lower tenure still favored Sterling, hence we still see downside in this slow moving pair (~ 40 pips daily ATR) at least for the medium term.
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