Daily Alert – Wednesday 16th June 2021: Oil is only asset behaving itself
WTI (oil) continues to push upwards as the sole asset with any real momentum in these doldrumic times. Even the CAD cannot keep up, with the usual positive correlation between oil and CAD failing as the CAD drops.
Global equities are static. GOLD falls. Risk sentiment went from risk-on on Monday to risk-off yesterday to indecisive today.
CPI in the UK jumps to 2.1%, beating expectation and exceeding the Bank of England’s mandate. However, don’t expect interest rates to rise soon. The general belief is that large inflation jumps are transient as we re-open from lockdown and as such will not endure.
The big risk event of the week is tonight’s Fed rate and statement. We have the fabled dot-plot which will show us when the Fed themselves believe the next rate move will occur. Hint – not soon. Any market over-reaction would be welcome as we can trade the reversal as we have done so many times. Over-reactions become more likely when markets are quiet so here’s hoping.
I took Japan225 long on Monday. It never really took off and clipped out my stop loss (at breakeven) at 5am this morning. The WTI long on the weekly chart is doing well.
I’ll be back on Friday.
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