Weekly Outlook 10th July 17

BOC path of glory, Yellens no more recessions in my life time speech and reincarnation of the battle for Sterling. Visor down it’s action time… .

In 2k15 BOC (Bank Of Canada ,saving you from searching up this one in case you thought it reads ‘before christ’) insulted bulls with two rate cuts. FF (not favourite follow but fast forward) to 2k17 oil market somewhat got a hold of itself and stabilised coupled with swarms of workers entering the part time job market (prolly all students trying to stay afloat) Deputy Governor Wilkins is confident that raising them rates is necessary. As a mater of fact market thinks yesterday is too late and the cause for two rate hikes back to back is sticky taped on every CAD pair. Forward guidance on Wednesday will be key for markets. Don’t be scared off by Oil turmoil in wake of rate hikes Canadian Dollar quite happily denies it’s relationship with the black stuff.

Eyes on Yellen’s testimony on Wednesday through to Thursday and revelations of balance sheet unwind timing (expect this announcement to come next month in Jackson Hole plenty of bodies and time to lay out plans as fed meeting revealed a couple of month before unwind is all go anyway). Spoiler alert testimonies aren’t eventful but expect her to reiterate high stock valuations just to smash indices further while liquidity is low. Cpi due for USD, an uptick read would be just and give bulls more reason to hee-haw . Likely to see USD strength into Wednesday.

The Great British Pound has found itself in a rather dismal pressing confinement (please read this with your 18th british accent and have a slang dictionary at hand ). While price action points at ‘Flash the hash’ a ‘Hoddy doddy’ goes by the name of Carney is cautious optimistic (inflation driven tug o’ war) and leaves us with ‘Running smobble’ (Snatch-and-grab-style raid on a shop counter) shorts. Bond sales up this week, these events are usually over subed and spirit levels say demand frenzy (you pudding-headed fellow the jokes stopped 2 sentences ago). Finally, staying cautious bear as BOE’s members vote hiking is inclining. Sing a shantie.

Quick takes on others:

Euro index shot a daily fail break of the highs suggesting a pullback almost immediatetly.

Precious metals heavily over stretched on the short side, developing NK trouble but no hard evidence of a reversal yet.

BOJ initiating yield smash and keeping yen low clearing way for xxx/Yen longs.

Miad

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