STATE OF THE MARKETS

Taper talks buoyed Dollar. US S&P 500 (+0.18%) made an all time record high while Nasdaq (+0.74%) made a second attempt to break it’s all time high on Monday as markets expect Feds to stay put this week. On the other hand, blue chip Dow (-0.25%) and small cap Russell (-0.41%) closed lower as investors continue on profit taking ahead of FOMC. Bonds were of less demand as the 10Y benchmark yielded higher, back at 1.50%, but Feds taper talks have buoyed Dollar (DXY) above the 90 mark for the past two weeks.

Crude futures were at a brink of offers as EIA reported that shale oil is expected to add 7.8 million barrels of supplies this July. The black gold settled above $71/bl after hitting as high as $71.78/bl before New York closed. Taper talks sent gold to as low as $1,844.57/oz before bids emerged and settled around $1,866/oz.

In the FX space, King Dollar sustained a firm bid across the board ahead of the FOMC decision this Wednesday, while sending the comdolls on offers. Euro and Sterling have been in a tug of war for 4 weeks now. Yen and Swiss went back on offers in the short term, while medium and long term saw more Swiss demand than Yen.

OUR PICK – AUD/NZD

Re-enter as shorts remain valid. Recent rally in AUD/NZD was mere short covering as Aussie bonds yields have become less attractive and remain inferior to Kiwi. We re-entered shorts with new stops and targets.

Disclaimer:

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.