Wakeup Call: Watch Out For Durable Goods Orders, But Earnings Will Keep Fuel Risk Sentiment

What's going on?

Another batch of slowing manufacturing data from the US – CaseShiller notwithstanding (4.6% YoY from 3.8%) – saw Richmond Fed Activity fall to 16 from 23 (new orders declined to 13 from 25). Consumer confidence also declined to 50.4 from 54.3.

Durable Goods Orders will be released today so watch out for new signs of a slowing US economy. In addition, the Fed’s Beige Book will be released.

AUD fell in overnight trading following a string of poor CPI numbers. Consumer prices did increase 0.6% QoQ in 2Q, but that was below expectations for a 1.0% gain (0.9% in 1Q). The RBA trimmed mean (0.5%) and RBA weighted median (0.5%) measures also came in below consensus.

Better than expected earnings continue to set the tone for risk sentiment. We expect companies to continue to outperform with Boeing and ConocoPhillips being two important companies to report today.

Calendar

Economic Data Releases
Country	Time (GMT)	Name	Saxo	Consensus	Prior
GE		CPI YoY (JUL, Preliminary)		1.20%	0.90%
US	12:30	Dur. Goods Orders / Ex. Trans. MoM (JUN)	0.0% / -0.2%	1.0% / 0.4%	-0.375
US	18:00	Fed’s Beige Book

FX

FX	Daily stance	Comment
EURUSD	0/+	Buy dips to 1.2960 for the next up-move, target 1.3070. Stop below 1.2915.
USDJPY	0/-	Prefer to sell rallies to 88.10, stop abv 88.60 for a dip to 86.35 again.
EURJPY	0/-	Look to sell rallies to 114.40 for a dip to 113.45, stop abv 114.85.
GBPUSD	0/-	Expect to meet n/term res at 1.5630 for a dip back to 1.5540. stop abv 1.5665.
AUDUSD	0/-	Sell into rebound to 0.8980 for a test of 0.8860, stop abv 0.9035.
USDCAD	0/+	Buy dips to 1.0340 for a rebound abv 1.0380, target 1.0425.

Equities

Equities	Daily stance	Comment
DAX	0/+	Buy on dips towards 6176 targeting 6219. S/L below 6156.
FTSE	0/+	Buy on dips towards 5348 targeting 5400. S/L below 5320.
S&P500	0/+	Buy on dips towards 1111 targeting 1118. S/L below 1107.
NASDAQ100	0/+
DJIA	0/+

Futures

Commodities	Daily Stance	Comment
Gold	0/-	Sell at the break of 1161 targeting 1158 (first) and finally 1150. S/L above 1164.50.
Silver	0/-	Sell at the break of 17.62 targeting 17.48. S/L above 17.70.
Oil (CLU0)	0/+	Buy at the break of 77.48 targeting 77.81. S/L below 77.38.

FX-Options

EURUSD	Vols softer as spot continues to trade in a range. Focus seems to be on the 1.28 and 1.25 strikes for today which saw good amount trading all week.
USDJPY	Yen gamma gets sold yet again. Spot is persistently underperforming and the 1m is down around 0.2 vols. If spot manages to hold above 8800 we will see vols lower again.
AUDUSD	Weaker-than-expected CPI resulted in spot lows of 8925 and as a result 1m got paid up to 14% but a wave of sellers absorbed the flow and has since moved slightly lower.

About the Author

Saxobank

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