STATE OF THE MARKETS
Dollar in limbo as markets await NFP. Another day of pop and drop for the US equities markets on Wednesday as Dow (+0.07%), Nasdaq (+0.14%), S&P (+0.14%) and Russell (+0.13%) closed higher than the day before; after comments from Philly Fed President Patrick Harker that rates were going to stay low “for a long time”. More than $339 billion worth of block orders flowed into the US bond futures, forcing yields to edge lower. 10Y settled below 1.60% while 5Y at 0.80% as New York closed.
Crude futures continue to break higher, past $69/bl, after OPEC+ decided to continue its supply quota amid demand recovery from the US and China. Fed’s comment put gold back above $1,900/oz while Dollar lost bid after inflation concerns dampen demand for the Greenback.
In the FX space, surging crude prices sent Loonie to reign in demand while Sterling demand synching across all horizons. Short to medium term traders seemed on risk-off as Kiwi was sent to the back burner, while demanding for Swiss and Yen. Aussie and Dollar seemed to be taking a pullback, while Euro advanced in the demand territories. Long term remains relatively unchanged with the Dollar in limbo as markets await NFP this Friday.
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 $|
|AMC||62.55 / 45.00||stock options/put||145.99||47,942.2M|
|6L||0.1922 – 0.1932||FX futures/BRLUSD||421||8.1M|
|ZF/UB/TN||123.2775 – 185.0800||US bond futures||25,450||339,320.4M|
|CL||67.60 – 68.18||crude oil futures||1,045||70.9M|
OUR PICK – AUD/NZD
Yields favored Kiwi over Aussie. The picture below shows a thousand words about why we think AUD/NZD will continue its downtrend in the next eight to ten weeks. Kiwi bonds are among the best yielding bonds in the G8 space next to Loonie. The Aussie is not that bad, but recent rate cuts have shifted demand to CAD and NZD. This pair, however, is a slow moving pair having an ATR (13) of 50 pips a day, 110 pips a week. So patience is needed to arrive at the destinations.
|Short-Term||Sell Limit @ 1.0750||1.0800||1.0680||1.0600|
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