Hi John,
15 minute Euro -- the markets are looking around wondering what happens next..... The EUR/USD is hanging around at the 1.0950 area as we have stabilized this morning.
and some are rattled by the pronounced weakness in Crude and the Gasoline Futures since early April...... some real big time weakness in many commodity markets since early April.... iron, Copper, Zinc.... a plethora of commodity market weakness.
15 minute Euro Globex
Here is the daily Euro Chart drawn to the Golden cluster of .382% retracement on the daily and the the .618 price projection fractal at 1.0953
The EUR has climbed above it's 200 dma and is above the descending trendline that looks quite bearish 8 weeks ago.
The 18 month chart of the EUR/JPY is looking very "RISK ON" with the incredibly strong RSI and rate of change oscillators... The Key Cross rate appears to be ready for the EUR to make a new that will be the best relative strength for the EURO since early 2016.
This is a very favorable backdrop for a number of global economies and bullish a number of global bourses and stock exchanges.
The Eurozone1. Emmanuel Macron won the French presidential election by a significant margin.
Source: @WSJGraphics; Read full article
One of Macron’s greatest challenges in the coming years will be labor reform, as the unemployment rate stubbornly holds above 10%. Moreover, the French Parliament is likely to remain under the traditional parties’ control, making it harder for the independent president to implement legislation.
2. The euro rose above $1.10 for the first time since November in Sunday trading in response to the election news.
Speculative accounts are no longer net short the euro for the first time in three years.
This is a really big deal to no longer have speculative accounts net short the Euro...... and should
be viewed as quite Bullishly from a sentiment viewpoint and more significantly it should spill over into a great flow of funds into US equities, European equities , emerging market stocks, lower quality debt instruments.
.Rick Santelli commented during the 11 AM hour that this should well be the type of current environment of buy stocks high... and sell them higher.
3. With the political risks in the euro area easing, is the ECB ready to reconsider the need for the current levels of stimulus? Even the Eurozone’s retail activity, which has lagged manufacturing and services sectors, has accelerated recently.
Source: IHS Markit
And yet, here is the Eurosystem consolidated balance sheet. The big Central Bank Balance sheets are still in full view and are the height of fashion... as the congnescenti take advantage of the uber liquidity and the assets classes into which it flows.
4. The Greek government has some big payments coming up soon.
Source: Moody’s Investors Service, @joshdigga
Nonetheless, the nation’s sovereign CDS spread is tightening, as hopes rise for partial debt forgiveness to put the country on a sustainable path.
Source: Bloomberg
5. One of the headwinds for Greece is the strength of the euro. Purchasing power measures point to the euro being overvalued for Greece and France and undervalued for Germany.
Source: World Economics
Source: World Economics
The USD/JPY crossrate is showing that the YEN is nicely ensconced in the midst of it's range the past few years...
It's not to strong .... nor to weak...... it's very much like Baby Bear's porridge....... just about exactly right...... This currency backdrop can accomodate positive developments in several parts of the world.
Even the Mexican Peso is behaving itself well.............
The initial 5 minute fractal decline did a pretty good job of identifying the low we would experience later in the AM\today....
John |
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