Dollar Under Pressure Amid Wobbling Yields

STATE OF THE MARKETS

Dollar under pressure amid wobbling yields. US stocks continue to climb higher on Thursday, with all major indexes in the green – from Dow to Russell – after many earning reports continue to beat consensus. Reports of higher than expected jobless claims (400k vs 385k) and lower than expected GDP (+6.5% vs +8.4%) prompted Dollar selling as yields wobbled when Feds was more likely to keep the low rates longer. The 10Y yields have been in  a tight range of 1.28% – 1.23% for the week.

In the commodities market, crude futures continue to rise above $73.30/bl after Iran nuclear deal was reported not having any progress, limiting concerns of immediate supplies increase. Gold continued its upward trajectory, closed above $1,827.90/oz, after selling pressure continued to plague the Greenback.

In the FX space, King Dollar was on heavy offers with Aussie in the short and medium term accounts, as Swiss and Sterling led the demand in medium to long term accounts. The comdolls are all over the place as the month comes to an end for rebalancing and hedging. Cautious remains the dominant theme in the FX markets.

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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

** % Change here refer to price

WALL ST TOP FLOWS

** % change here refers to volume

TOP 5 BLOCK ORDERS

OUR PICK – No New Pick

No new pick as we had three losses in a row. There has been consistent outflows from the US equities markets for the past few months and this week is no exception. As of Wednesday the 28th, -$1.37 billion flowed out of US equities while $650 million flowed into foreign equities and $3.95 billion flowed into US taxable bonds. Short term money markets seemed to be preferred as it received more than $15 billion inflows. We see some more room for stocks to fly, but the top is near in our view as breadth is becoming less and less bullish.

Trades updates:  We will continue to accumulate AUY as the stock now pays dividends yielding 2.46% at current price, we remain bullish T and will accumulate as dividends yields now at 7.43%, we remain bullish COG and will accumulate as dividends yields now at 2.77%, we remain bullish CLVS, VIPS while bearish GPRO, APA, and GE. (Note: APA pays 0.53% while GE’s dividend yield is at 0.30% and CLVS, VIPS and GPRO currently does not pay any dividends)

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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.