CRB Index Hits 2017 Down Trendline

CRB

The CRB Index gapped higher today and it follows a gap higher opening on Tuesday, which has not been filled.  Today’s gains lift the commodity index to a trendline drawn off the January and February highs and catches the high from late May.  It intersects today near 181.35 and the high has been a little over 181.17.   This is depicted on the Great Graphic made on Bloomberg, with five and 20-day moving averages added. 

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What Is the Swiss Franc Telling Us?

new switzerlandThe Swiss franc is trading at its lowest level against the euro since the Swiss National Bank surprised the world by lifting the currency cap in early 2015.  This week’s move has been especially pronounced. The euro has appreciated by a little more than 2% against the franc,  Barring much of a setback tomorrow, it will be the largest weekly advance in 2 1/2 years.

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Dollar Remains on the Defensive

new united states

  • The US dollar is narrowly mixed after selling off following the FOMC statement 
  • The bottom line is that the scenario we suggested after the June FOMC meeting remains most likely 
  • The US economic calendar includes weekly jobless claims, preliminary durable goods orders, merchandise balance, and wholesale and retail inventories 
  • After markets closed last night, COPOM cut rates 100 bp to 9.25%, as expected 
  • Central Bank of Turkey is expected to keep rates steady; Colombian central bank is expected to cut rates 25 bp to 5.5%  

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FOMC Sticks to Script: Balance Sheet Unwind to Begin “Relatively Soon” and USD Retreats

new arrowThe FOMC statement reads very much like the June statement.  There were some minor tweaks in the first paragraph that discusses the broad economic performance since the last FOMC statement.  There was little change in the assessment of inflation, which was a keen interest to investors.  As in June, the Fed recognized that inflation was running below the 2% target and that it would be watched closely.  

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From the Securities Lending Trading Desk

Airplane in the sky and cloud at sunset

Demand has increased for Asia’s largest international airline after its chief executive officer admitted to a “disappointing” first half financial performance. There is increased fundamental demand for Virtu Financial Inc. (VIRT) as high-frequency firms face headwinds from the rising cost of infrastructure and low volatility. Meanwhile, Paris’ biggest landlord, Gecina, is embarking on a rights issue to fund expansion.

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Quiet Fed Day Without Yellen

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  • By definition, the Federal Reserve Open Market Committee meeting is the highlight of the day 
  • There has not been sufficient data to require a significant change in the Fed’s statement 
  • The Australian dollar is off nearly 0.5% following a soft headline inflation figure and dovish RBA comments 
  • The UK is the first G7 country to report its first estimate of Q2 GDP 
  • COPOM is expected to cut rates 100 bp to 9.25% 

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