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Blue Line Futures

August 19, 2019

FX Rundown: August 19th, 2019

Fundamentals: The Euro secured its fifth straight losing session after Eurozone CPI was soft and the German Bundesbank warned of a recession in its latest Monthly Report this morning. Although Michigan Consumer data in the U.S missed on Friday, broadly stronger data throughout the week helped fuel the Dollar Index to the highest level since August 1st, the day after the Fed cut. Uncertainties tied to Italy and the ongoing Brexit have also dragged on the Euro of late. Today, Boston Fed President Rosengren who is known to be a hawk advised against additional rate cuts. The debate will heat up in the back half of the week as the Fed releases the Minutes from their July rate-cut meeting Wednesday and the Jackson Hole symposium kicks off Thursday with the keynote speech from Fed Chair Powell Friday.
Technicals: Price action slipped below support at 1.1201 midweek last week and has continued to slide. In fact, Friday was a new front-month settlement low by half a tick and today’s was lower. The Euro is now below key support at 1.11265-1.1149 and there does not seem to be much technically in the way between where it is now and a direct test into … Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

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J.P. Morgan Asset Management

August 19, 2019

Economic Update: August 19, 2019

The first estimate for 2Q19 real GDP growth came in at 2.1%, a little stronger than the consensus expectation of 1.9%. Real government spending and real consumer spending were positive contributors to growth, while a decline in business fixed investment, slower inventory growth and weaker trade detracted. Looking forward to the third quarter, inventory growth should decline further while consumer spending and government spending will likely grow at a more moderate pace and trade numbers should continue to be weak.

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WisdomTree

August 15, 2019

Game of Bridge or Game of Thrones between China and U.S.?

The entire German yield curve is negative. The U.S. 3-Month Treasury yield is at 2%, while the 10-Year yield currently sits close to 1.65%. Excluding U.S. debt with 20 years to maturity or more, U.S. short-term Treasuries now have the highest yield among all developed-nation debt.

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Interactive Advisors

August 13, 2019

It’s a Small, Small World

Global equity markets have been experiencing heightened volatility over the last few weeks. In my opinion, there are quite a few intertwined issues at work here. First, China’s economy has a large export component, accounting for nearly 50% of all GDP. China has made the domestic economy a focus, to reduce its dependence on exports over the last decade.

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Bullseye Brief

August 13, 2019

“Race to the Bottom”: Week of August 12, 2019

Three countries lowered interest rates last week in response to China’s decision to let the yuan fall below seven to the dollar (India, Thailand, and New Zealand). Lower interest rates generally coincide with weaker exchange rates… creating an export advantage for the country with the lowest FX… and since no one want to see competing Chinese products get even cheaper, they are outdoing one another with rate cuts.

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Briefing.com

August 12, 2019

Growth Concerns Linger After Turbulent Week

The S&P 500 futures trade 12 points, or 0.4%, below fair value following a turbulent week on Wall Street, while investors continue to assess U.S.-China trade relations and the Hong Kong government protests.The Hong Kong protests have yet to materially affect U.S. equity markets but given the limited scope of corporate and economic news today.

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Schroders

August 8, 2019

Fed Rate Cut Spurs EMs Into Action

Like Brazil last week, India’s central bank surprised markets with a larger-than-expected cut, easing by 35 bps to take the policy rate to 5.4%. The accompanying statement was also rather dovish in tone and suggested more cuts to come. This month’s rate cut had been flagged at the previous meeting, the new governor’s first, which also delivered a rate cut.

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Interactive Brokers

August 7, 2019

Currency Fix, or Manipulation?

I found Monday night’s plunge in equity futures to be the most perplexing and disturbing. Markets were already skittish after a substantial plunge when the Treasury Department designated China as a “currency manipulator.” I received further alerts about sinking futures shortly after that news broke, only to wake up to buoyant markets when the Chinese Yuan was fixed at a level below 7 Yuan to the US Dollar.

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Blue Line Futures

August 7, 2019

Morning Express: August 7, 2019

Equity markets are off their best levels of the session and U.S Treasury yields are in the spotlight. Recession fears are being echoed loud and clear after three central banks (from New Zealand, India and Thailand) cut rates and German Industrial Production fell sharply. There is no major U.S data on today’s economic calendar but Chicago Fed President Evans speaks at 11:00 am CT and there is a 10-year Note auction at noon CT.

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