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Today’s Futures Outlook: August 21, 2020

RJO Futures

Contributor:
RJO Futures
Visit: RJO Futures

By:

Senior Asset Manager

Overnight Highlights:

  • French PMI misses expectations and decelerates m/m to 49.0 vs 53.7 Forecasted and 52.4 previous
  • Eurozone PMI misses expectation decelerating m/m to 51.7 vs 52.9 forecasted and 51.8 previous

Global Equities:

  • US Futures indicating a lower open led by the Small Cap Russell 2000 Index -0.88%
  • Europe lower across the board, led by Germany -1.08%; France -1.09%; Italy -1.25%; and Spain -1.12%
  • Asian Equites largely higher across the board with the Shanghai Index +0.50%

Top Market Movers Overnight

Treasuries/Yields

  • Following an attempted break to higher levels from the “hawkish” Fed Minutes release, the 10yr yield has slumped back 10bps to 0.62%
  • Treasuries catching a bid on a “risk-off” morning in Global Macro Markets
  • OPINION: We’ll continue to trade Treasuries with a “Bullish Bias” until our quant signals suggest otherwise – NOT A BUY RECOMMENDATION FOR TODAY
  • Our range analysis suggest covering some treasury exposure today as we’re now immediately triggering “overbought”

US Dollar:

  • Gaining some fervor overnight off of the weak European PMI data and a flight to safety bid off of a weaker US Equity Open
  • We contend there’s a small window for the Dollar to rally, however it shouldn’t get too far.  Upside to 93.90 in our model
  • We remain BEARISH OF THE USD

Gold:

  • Trading lower overnight, retesting some immediate-term trend support at 1915.00 in our model with downside to potentially 1895.00
  • Held back by a stronger USD, and a general “risk-off” outlook headed into the day
  • OPINION: Gold is in the “Buy to Accumulate” Zone in and around the 1915-1895 level  
  • Gold remains BULLISH trend on all time frames coupled with BULLISH momentum, but momentum appears to be turning “Neutral”
  • We largely expect a range bound trade between 1874-2010 until bullish fundamentals reassert themselves.

Originally Posted on August 21, 2020 – Today’s Futures Outlook: August 21, 2020

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