Image Source: Pixabay
 

Asian equity markets had a mixed trading session, reflecting the uncertain performance in the US markets as investors processed various data releases, and corporate earnings results from tech darlings Netflix and Tesla, the latter saw a decline in margins as it continues to boost discounts, while Netflix’s new password initiative failed to deliver expected revenue growth, investors were underwhelmed by both of their performance updates weighing on Nasdaq futures overnight. 

The Nikkei 225 was the worst performer, declining following weaker-than-expected trade data with a contraction in imports, although the trade balance returned to a surplus for the first time in almost two years. On the other hand, the Hang Seng rose, buoyed by early strength in the property sector after the People's Bank of China eased cross-border funding for firms and financial institutions. However, the Shanghai Composite was lackluster despite the PBoC maintaining benchmark lending rates and issuing guidelines for the promotion of the private economy.

In the Eurozone, consumer confidence has been steadily rising over the past three months, reaching its highest level since February 2022. Despite recent indicators suggesting a slowdown in Eurozone economic activity, both analysts and the consensus expect a further small increase in confidence for July.

Stateside several indicators will provide further insights into the US economic activity. The weekly jobless claims will indicate the tightness of the labor market. The June labor market report showed buoyant conditions, and recent weekly claims have surprised on the downside after a few higher readings. The June existing home sales report will offer an update on the housing sector, which has been affected by rising interest rates but is now showing tentative signs of slowing down. The July Philadelphia Fed index, while a timely update on the factory sector, tends to be too volatile to provide useful indications.
 

CFTC Data As Of 14-07-23

• USD net spec short fell a touch in the Jul 5-11 period as $IDX slid 1.37%
• Fairly serious moves among majors w/hardly any position changes
• Suggest a fair amount of position replacement as specs were getting stopped
• EUR$ +1.2% in period, specs -2,675 contracts into strength now +140,162
• $JPY -2.84% in period after breaching 145 last wk, specs buy 738 contracts
• GBP$ +1.73% as BoE seen a cointoss for +50bp Aug 3, specs +7,798 now +58,063
• CHF specs relatively active -4,503 contracts now short 7,907
• $CAD +0.06%, Aussie -0.06% specs sell less than 1k contracts
• BTC fell a scant 0.74%, specs +221 on dip now short 1,855 contracts(Source: Reuters)
   

FX Options Expiries For 10am New York Cut 

(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)

• EUR/USD: 1.1110-20 (1.6BLN), 1.1190 (310M), 1.1200 (1BLN), 1.1270 (479M)
• 1.1300 (592M)
• USD/CHF: 0.8625 (245M), 0.8735 (275M), 0.8830-35 (1BLN)
• GBP/USD: 1.2775-95 (484M), 1.2945 (365M), 1.3015-30 (640M), 1.3095 (451M)
• EUR/GBP: 0.8645-50 (605M), 0.8675 (903M), 0.8700 (551M), 0.8750 (364M)
• AUD/USD: 0.6755-65 (554M), 0.6800-15 (2BLN), 0.6860 (227M)
• NZD/USD: 0.6225 (429M), 0.6310 (1.2BLN), 0.6415 (280M)
• AUD/NZD: 1.0850 (906M). USD/CAD: 1.3105 (680M), 1.3215-25 (430M)
• USD/JPY: 138.75 (396M), 139.00 (271M), 140.00-10 (3.7BLN), 140.60-70 (773M)
• 140.90-95 (1BLN). AUD/JPY: 96.10 (250M)

Traders have been cautious about buying higher strikes in GBP/USD options, but they have not ruled out recent volatility. Implied volatility for the benchmark 1-month options has increased to 8.5, matching pre-June Bank of England peaks. After the inflation data, 1-month options were sold at 8.3, and 3-month options were given at 8.1-7.9, but deeper declines have been limited for now. There is demand for September Bank of England options, which include another CPI report before the expiration. The USD/JPY traders are likely to pay attention to Friday's Japanese CPI data, which may support current implied volatility levels and limit setbacks in options expiring after the 28 July policy announcement. 

Overnight Newswire Updates of Note

• Japan's Nikkei Slides As Chip Stock Rout Eclipses Auto Share Gains 
• Australian Employment Rises Further As Labour Market Stays Strong
• China Leaves Lending Benchmarks Unchanged, As Expected Thursday
• China Mulls Mortgage Easing To Spur Home Buying In Big Cities
• China Ramps Up Yuan Support With Fixing, Borrowing Measure Tweak
• Bank of America Cuts China 2023 GDP Forecast To 5.1% From 5.7%
• Japan’s Balance Of Trade Swings To Surprise Surplus In June
• BoJ Watchers See Ueda Standing Pat Now, Tweaking YCC By October
• ECB's Stournaras: Next Week's Interest Rate Hike Would Be Enough
• Bank Of England's Ramsden Calls For Faster QE Gilt Unwind
• China's State Banks Seen Selling Dollars Offshore To Slow Yuan Declines
• SocGen: PBoC’s Yuan Fixing Manoeuvring May Not Reverse Sentiment
• Nikko Asset Shifts To Bullish Yen Slant As Ueda Bides His Time
• Crypto Altcoins Resume Their Rise; Bitcoin Hovers Around $30,000
• Oil Steadies As Slump In US Stockpiles Offsets Demand Concerns
• Asian Stocks Mixed Thursday As US Futures Slip; Yuan Rises
• Foreign Investors Sidestep China In Rush Into Asian Stocks
• Apple Tests ‘Apple GPT,’ Develops Generative AI Tools To Catch OpenAI
• Tesla Q2 Margins Fall As It Boosts Discounts To Drive Demand
• Netflix Tops Wall Street Forecasts With Password Limits, Ad Option
• IBM Misses Second-Quarter Revenue Estimates As IT Spending Cools

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
 

Technical & Trade Views

SP500 Intraday Bullish Above Bearish Below 4540

• Below 4520 opens 4460
• Primary support is 4370
• Primary objective is 4630
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

EURUSD Intraday Bullish Above Bearsih Below 1.12

• Below 1.1150 opens 1.1050
• Primary support is 1.10
• Primary objective is 1.13
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

GBPUSD: Intraday Bullish Above Bearish Below 1.30 

• Below 1.2830 opens 1.2710
• Primary support  is 1.26
• Primary objective 1.3850
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

USDJPY Bullish Above Bearish Below 139.60

• Above 139.60 opens 141.80
• Primary resistance 142
• Primary objective is 136.20
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

AUDUSD Intraday Bullish Above Bearish Below .6800

• Below .6795 opens .6750
• Primary support  is .6448
• Primary objective is .7000
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

BTCUSD Intraday Bullish Above Bearish below 30000 

• Below 29400 opens 28600
• Primary support  is 28400
• Primary objective is 32750
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

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