The collision of global markets and social mood

Thursday, June 8, 2017

Thursday -- Eye On The Ball: The BoJ

Note:
No blog Friday. Heading back to the States for Alumni Weekend and High School reunion.

S&P E-mini Futures:
No new high overnight, while NQs made one.

Markets:
Not Comey, not the UK elections, not the ECB (which moments ago dropped guidance on rate cuts in a step toward exiting stimulus) -- the real news is from the BoJ:

"The yen rose and Japanese bonds fell as the central bank was said to be re-calibrating its communications to acknowledge it’s thinking about how to handle a withdrawal from monetary stimulus" -- Bloomberg

This is not about success by the BoJ to conquer deflation. It's acknowledgement of failure.

As in they can't afford to keep going.

As in look out below when the markets figure it out.

Rates are moving higher around the world so far this morning.

Mood:
Taking their cues from a supermodel (Giselle) a while back, British Football players demand to be paid in Euros

Wonder if it has anything to do with weak GBP sentiment and sky-high EUR sentiment -- currently at 89% bulls.

Short EURGBP may be in order.

FX:
JPY reversed and weakened considerably after the BoJ news hit, a sign of disbelief possibly. Or a sign that the current market momentum can last for a while longer, one that I agree with.

Treasuries:
Prices red. Slight buying tails appearing, however.

10-year JGBs "sold off aggressively" on the BoJ story, never a good sign.

Energy:
WTI crude faceplanted yesterday after DoE data showed a huge build in inventories.

Guess we know not to trust API, which only a day before reported a draw.

WTI and NG both down. Maybe crude can bottom around 45.

Metals:
Gold and platinum lower. Copper and palladium higher. Silver trying to turn from neg to pos.

S&P Outlook:
Both the SPX and NDX kept the pressure on higher prices, with the NDX quickly negating the possible impulse down yesterday.

This should at least target the 2440 and 5900 areas respectively.

Hope it doesn't happen Friday when I'll be away from the screens.

Option shopping:

1) A 15-day .74 delta QQQ put asking 4.62

2) A 19-day .75 delta VIX call asking 1.55

I think I see the better deal.

Might get some for Friday, just in case, if VIX can get back under 10.

Even if there's a market rally Friday, VIX might stay where it is or even firm up.

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