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*Good morning/afternoon everyone!*
The NY morning starts with a series of damaging trade headlines. President Trump said he’s ready to put tariffs on ALL $505 billion of Chinese goods imported to the U.S. and the German Chancellor Merkel said the E.U. is ready to retaliate against any U.S. auto tariffs. Trade tensions are escalating and not easing causing the Chinese Yuan to fall further. Yuan weakness has been a big story this week and the ramifications will be significant for the region’s economy. But currencies did not have a big reaction to Trump’s latest threats and that could be because investors are growing numb to his antagonistic attitude. With that in mind, we still believe that AUD and NZD will underperform as a result of these latest comments. U.S. yields are also up today, supporting a rally in the U.S. dollar. European Stocks and Dow futures on the other hand have turned negative following the trade talk. The Canadian dollar will be in focus this morning with retail sales and CPI scheduled for release. The lack of U.S. economic reports means the greenback will be trading on headline risk.
*The MAIN THEMES I see today are*
+USD, +EUR, +GBP, +CHF
-AUD, -NZD, -JPY
*Today’s Initial Trades*
Here’s the summary --
1. Sell AUDUSD at .7361, Stop at .7389. Target .7333
2. Buy CHFJPY at 112.63, stop aa 112.35, Target 112.91
3. Buy EURAUD at 1.4820, Stop at 1.5792, Target 1.5848
4. Sell USDCAD at 1.3250, Stop at 1.3278, Target 1.3222
Close ALL open day trades by 10:20AM NY / 15:20 GMT