Daily Alert: For Thursday 18th February 2016

Mark Nugent2016 H1, Daily Alert, February 2016

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Fundamentals and Sentiment

A good solid risk-on day across the world. We have the Vix dropping down to around 23. Oil and commodities: oil is up and commodities move in a tight area of consolidation around multi-year lows. Shares: the Nikkei and Hang seng are slightly down but China, Europe and the US are all well up. In fact the S&P500 is having its best period this year – 5 straight days of gains. Major western bond yields are slightly up meaning prices are down as money is moving out of safety into riskier assets. The Japanese Yen index is weakening and the commodity currency indices are all up.

On the calendar, we have UK Average Earnings coming in on target at +1.9%. UK Claimant Count exceeds expectation by dropping almost 15,000 vs an expected drop of 3,000. The FOMC minutes are out at 7pm UK time tonight. Iran and Venezuela met today. Iran said it supported the production freeze (for everyone else) but stated its own desire to increase production from the current 2.9m barrels per day to 4.5mbpd!

Trades (see video)

1. Euro weakness – EURUSD around breakeven. There are opportunities in EURAUD, EURCAD and EURNZD.
2. USD strength – USDSGD and USDJPY offer opportunity.

Watch List (see video)

1. USDCAD – moves down to support.
2. GBP weakness – check at 10pm UK tonight for a break and close through the trendline.

Tomorrow

I will report on the Fed minutes tomorrow.
US Unemployment Claims.

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