Forbes: War Is A Terrible Business Model
The “debt ceiling” is $16.7 trillion and the cost of the war, so far, is
$6 trillion. Those two numbers speak for themselves as if you divide
the cost of the American population into that you get roughly $19,000 a
head. Imagine that in your checking account.
Euro Risks Weighted to Downside Ahead of ECB, NFPs :
Fundamental Forecast for Euro: Neutral
Is 1,600 the Next SP500 Support Level? :
Investors and traders alike are heading into the long weekend with a
variety of potential risks facing them. The media has made us aware of
the situation that is going on in Syria and that the United States may
be planning a military strike.
Since the current Syrian situation arose, we have seen some strong
volatility return to U.S. financial markets. The observed volatility has
included both realized volatility and implied volatility in many of the
various option chains. There are pundits who will surmise a variety of
outcomes, but frankly no one knows for sure. Will oil prices spike if
military action occurs in Syria? Will oil prices fall on a military
action(s)? What will happen to gold? What will happen to risk assets?
Will they find Jimmy Hoffa?
Gold / Silver / Copper futures - Weekly outlook: September 2 - 6
Gold futures ended the week below the key USD1,400-level on Friday,
after mostly upbeat U.S. economic data fuelled speculation the Federal
Reserve will begin to taper its bond-buying program at its next policy
meeting.On the Comex division of the New York Mercantile
Exchange, gold futures for December delivery fell 1.3% on Friday to
settle the week at USD1,395.00 a troy ounce. The December contract
settled 0.4% lower at USD1,412.90 a troy ounce on Thursday.Gold
futures were likely to find support at USD1,368.40 a troy ounce, the low
from August 23 and resistance at USD1,433.50, the high from August 28.Gold prices lost 0.2% on the week, the first weekly decline in a month.
Trading This Weeks NFP Release :
Forex traders wait every month for the volatility created through the
NFP economic release. Today we will examineexpectations for this Fridays
The release of Non-Farm Payroll figures can be an exciting time for
Forex traders. As one of the most anticipated releases on the US
economic calendar, Non-Farm Payrolls also known as NFP, has been
historically known to produce volatility in the market place. The cause
being, that during this news release, traders look for insight into
whether the US economy is expanding or contracting through new jobs
being added to the labor force. With NFP set to be released this Friday
at 8:30am ET,today let’s get a better understand NFP and its potential
impact on market.
If actual > forecast = good for currency (for AUD in our case)
Australia Retail Sales Add 0.1% In July
Retail sales in Australia gained a seasonally adjusted 0.1 percent
in July compared to the previous month, the Australian Bureau of
Statistics said on Tuesday, standing at A$21.824 billion.
That missed expectations for an increase of 0.4 percent following the flat reading in June and a 0.2 percent increase in May.
By category, department store sales were down 1.3 percent and other retailing shed 0.3 percent.
in food retailing (0.1 percent), cafes, restaurants and takeaway food
services (0.2 percent), clothing, footwear and personal accessory
retailing (0.3 percent) and household goods retailing (0.1 percent)
RBA Keeps Cash Rate Unchanged At Record-Low
The Reserve Bank of Australia on Tuesday decided to retain its
benchmark cash rate at record-low of 2.5 percent, in line with
At the meeting, the Reserve Bank Board noted that the setting of the monetary policy remained "appropriate".
Board said it will "continue to assess the outlook and adjust policy as
needed to foster sustainable growth in demand and inflation outcomes
consistent with the target."
If actual > forecast = good for currency (for USD in our case)
U.S. Manufacturing Index Reaches A New Two-Year High In August
After reporting the biggest monthly jump in manufacturing activity
in seventeen years in the previous month, the Institute for Supply
Management released a report on Tuesday showing that manufacturing
activity expanded at an even faster rate in August.
The ISM said
its purchasing managers index edged up to 55.7 in August from 55.4 in
July, with a reading above 50 indicating an increase in manufacturing
The modest increase by the purchasing managers index
came as a surprise to economists, who had expected the index to dip to a
reading of 53.8.
With the unexpected increase, the index added
to the 4.5-point gain posted in the previous month, reaching its highest
level since hitting 55.8 in June of 2011.
Bradley J. Holcomb,
chair of the ISM Manufacturing Business Survey Committee, said,
"August's PMI reading, the highest of the year, indicates expansion in
the manufacturing sector for the third consecutive month."
"Comments from the panel range from slow to improving business conditions depending upon the industry," he added.
modest increase by headline index was partly due to a notable
acceleration in the pace of new orders growth, with the new orders index
jumping to 63.2 in August from 58.3 in July.
Financials: Dec. Bonds are currently 1’17 lower at 130’12 and the 10 Yr. Notes 23 lower 123’18.0. The June 2017/June 2015 Eurodollar spread has widened about 5 points to 2.15 premium the June 2015. A slight easing of Mid East tensions with President Obama throwing the decision making process on what type of action to take concerning the use of chemical weapons on to the back of Congress for discussion has put the interest rate sector of the market back on track towards higher interest rates and “risk on” trade. For the moment I will look at Bonds as a trading affair between 129’00 and 132’00.
Grains: Dec. corn is currently 6’2 higher at 488’2, Nov. Beans 46’2 higher at 1403’6 and Dec. Wheat 6’0 higher at 660’0. Trends are up but I feel the upside in Dec. Corn is limited to the 510’0 level. I would like to note that these markets are trending higher inspite of a firming dollar. I suspect Beans will test the recent highs in the 1410’0 area..
Cattle: The early calls in both Live and Feeder Cattle are currently mixed. I am on the sidelines as far as speculative positions are concerned at this time.
Silver: Dec. Silver is currently 93 cents higher at 24.45 and Dec. Gold 6.00 higher at 1401.00. The Presidents decision to wait for Congress before taking any Mid East military action initially broke this markets providing a one dollar break buying opportunity in Silver (see “Report” from 8/29/2013). If you bought the break over the weekend, take the quick profit.
S&P's: Sept. S&P’s are currently 18.00 higher at 1649.25. I must admit that this is more of a rally than I might of anticipated by the cooling of the immediate tensions re. Syria. We remain long out of the monet put spreads and have taken the protective measure of buying out of the money puts in Crude oi (see “Report” from 8/29/2013). This has worked well for the moment as puts ten dollars out of the money (for example the Nov. Crude Oil 98.00 put) have increased in price by about 35 points ($350), a bit more than the S&P put spreads have lost. If Crude oil should trade below the 106.00 level I will be looking to take profits on the Crude Oil put.
Currencies: As of this writing the Sept. Euro is trading 40 lower at 1.3168, the Swiss 55 lower at 1.0687, the Yen 137 lower at 1.0051 and the Pound 65 higher at 1.5558. The Dec. Dollar Index is currently 20 higher at 82.59. I will be a buyer of the Dollar on a sharp break. I am also interested in going long the Yen in the 98.00 area if the market allows over the next few days.
Australia Q2 GDP Gains 0.6% On Quarter
Australia's gross domestic economy
climbed a seasonally adjusted 0.6 percent in the second quarter of 2013
compared to the previous three months, the Australian Bureau of
Statistics said on Wednesday.
The headline figure was unchanged from the previous quarter, but it beat forecasts for an increase of 0.5 percent.
Terms of trade added 0.1 percent on quarter, while real gross domestic income gained 0.6 percent.
a yearly basis, GDP was up 2.6 percent versus forecasts for 2.4 percent
after adding 2.5 percent in the previous three months.