- July 10, 2023

Markets tired and eyeing up the beach

This Daily Digest will cover:

  • Markets tired and eyeing up the beach
  • NFP missed slightly to the downside with revisions lower
  • Crypto languishing at the bottom of its range
  • Inflation the name of the game again this week

Friday saw NFP numbers released which missed forecasts to the downside for the first time since JR Ewing was shot (yes i am that old). We also saw revisions lower to the last few releases. This spooked the markets a little and stocks finished lower, the USD sold off a percent and Crypto , well it did diddly squat – a good performance against that backdrop.

Markets feel tired and directionless. A great H1 was always going to be difficult to match straight away, especially with the prospect of more rate hikes looming, and a period of consolidation/a drift lower feels likely over the summer. The S/P 500 is finding 4450 stiff resistance and shorts with a tight stop look good value. My EUR/YEN play on Friday worked ok without setting the world on fire and I maintain a leaning that way without being in love with it at all.

Crypto is doing its best to not wake a church mouse and whilst this is no bad thing when other assets are in the red, the lure of stops at 29,400 and 1800 is worrying short term. Longs have an easy stop loss at those levels, but for me the danger is a quick clear out soon to the downside before we can make further progress. Only above 31,500 and 1920 really gets me excited again at the moment.

This week is yet again dominated by inflation with readings for both CPI and PPI out of the States. Expected drops will do little to deter the FOMC from hiking this month as the last yards of any race are the hardest and the noises emerging from Powell and co are clear that 3% is not low enough.

I expect ranges to broadly hold for the next couple of days ahead of the data, so fading 1.1000 in Euro, buying into 141.00 in USD/ YEN and picking up BTC on a stop run to the low 29,000 are my favoured plays.

Good luck as always

Richard Usher
Head of OTC Trading 

 

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