Dollar Stalled Amid Rising Yields

STATE OF THE MARKETS

Dollar stalled amid rising yields. As US stocks continued charging higher on Wednesday, with Dow (+0.11%), S&P (+0.22%), and Nasdaq (+0.15%), including Russell (+0.37%) all in the green; US Dollar (DXY) was stalled around the 93 handle, as yields rising back above 1.33% for the 10Y benchmark. Demand for Dollar dropped as investors speculate that Feds is more likely to wait and see the after effects of unemployment insurance termination in September.

In the commodities market, crude continues to charge higher as concerns for delta variants dissipates amid recent FDA’s approval of vaccines from Pfizer and BioNTech. The black gold settled above $68.35/bl and formed three white soldiers as New York closed. Gold, however, continues on repositioning and profit taking from short-term traders as it closed below the $1,800/oz after holding it for two days.

In the FX space, bids for Loonie eased off, while Kiwi and Aussie continue to reign in demand across all horizons. While medium term investors seemed to be ditching the Dollar, long term investors continued to bid for the King, with Swiss and Yen, while having Kiwi for better yields. US GDP and jobless claims will be on close watch Thursday.

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OUR PICK – No New Pick

Humbled by markets. This is the second time we had another three losses in a row. We are humbled by markets and this is not the first time and we know it won’t be the last either. When this happens, we tend to think that something is wrong somewhere. Fact of the matter is, markets are changing and moving towards new dynamics. Uncertainties about Fed’s tapering, delta spread, Afghan crisis are not something we are able to foresee. We just have to accept the losses, manage our risk and move on. In the meantime, we will take a break for a week on picking of the markets.

Trades updates:  We are accumulating AUY as the stock now pays dividends yielding 2.78% at current price, we remain bullish T and will accumulate as dividends yields now at 7.58%, we remain bullish COG and will accumulate as dividends yields now at 2.93%, we remain bullish CLVS, VIPS and GT while bearish GE. (Note: GE’s dividend yield is at 0.31% and CLVS, VIPS and GT 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.