Market Update for July 10

10 July 2015, 09:06
Mark Yagalla
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It certainly has been an interesting trading week. What has intrigued me the most has been the euro. Almost every pundit out there was predicting the end of the euro as we know it after the Greek referendum. There was every reason for the euro to fall, but that hasn't happened. As they say, what can't go down, must go up. Also a market that ignores bad news is considered a bull market. While I'm not 100% confident that we're about to enter a bull market in the euro ahead of the weekend, you have to respect the euro strength and how it bounced off the lows.

 

I anticipate that Greece and its creditors will reach a deal. According to Bloomberg, Tsipras has bowed to most of the creditors' demands in exchange for $59.2 billion.

Outside of Greece, another reason for euro strength has been that expectations of a September rate hike by the Fed have been tempered. DoubleLine's Jeffrey Gundlach sees the chances of a September rate hike at less than 25%. I agree with that assessment and the latest Fed speak has indicated that along with the latest FOMC minutes.

For today, we have a few items on the agenda.

0830 EDT Canadian Employment report. Expectations are for a loss of 10k jobs and the unemployment rate to come in at 6.9%.

1135 EDT FOMC member Rosengren speaks

1230 EDT Fed Chair Yellen speaks

I'm not expecting them to say anything new. I'm not expecting a lot of fireworks or volatility ahead of the weekend. I'll look to trade the Canadian employment report and that's it. The USD/CAD has been on a tear higher. This report might tell us if the high is in or not and if we're going to see Loonie strength or weakness.

 

As far as the euro, my recommendation is to go home flat for the weekend and to not have a position. Anything can happen over the weekend and the risk isn't worth it. As always, best of luck and happy trading!

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