From the desk of Joe Rios…
The stock indices continued to impress after an event filled 3 1/2 day trading week. The employment report was strong with a net job gain of 288k and a decline in the unemployment rate to 6.1%. The US 10 year note closed the week lower pushing the yield towards 2.70%, the highest level since late April.
The rise in the US 10 year note yield helped drive the US dollar index higher. The sell-off in the Japanese Yen came to no surprise to our quant traders. The correlation between a rising US dollar and US stock indices continues to have a negative impact on the yen. The British pound, Canadian dollar and US dollar were the out performers in the currency market. In the commodity market Grains continued to slide lower led by Corn -7.4%, Soybeans -5.7% and Wheat -2.4%. The outperformer was Copper, rising 4.0%.
In the week ahead I will continue to focus on the correlations, specifically between the stock indices, Japanese Yen, US 10 year note and the US dollar. Crude oil closed the week lower sitting at a key support level from an uptrend, look for potential aggressive price action and volatility.
Joe Rios
RiosQuant.com
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Monday
8:30 AM CAD Building Permits
10:00 AM CAD Ivey PMI
6:00 PM NZD NZIER Business Confidence
9:30 PM AUD NAB Business Confidence
Tuesday
4:30 AM GBP Manufacturing Production
10:00 AM USD JOLTS Job Openings
9:30 PM CNY CPI And PPI
Wednesday
10:30 AM Crude Oil Inventories
2:00 PM USD FOMC Meeting Minutes
2:01 PM USD 10 Year Bond Auction
9:30 PM AUD Employment Change
Thursday
Tentative CNY Trade Balance
4:30 AM GBP Trade Balance
7:00 AM GBP Official Bank Rate
8:30 AM USD Unemployment Claims
8:30 AM Grains Weekly Export Sales
10:30 AM USD Natural Gas Storage
Friday
8:30 AM CAD Employment Change
12:00 PM Grains Crop Production
12:15 PM Grains Will Markets And Trade
12:15 PM Grains World Agricultural Production
