Weekly Fundamentals - 28 July 2017

 
THE WEEK AHEAD FUNDAMENTALLY - KEY DATA TO WATCH OUT FOR
 
In conclusion to our report last week we wrote:
“No changes in COT data this week so therefore our thoughts from last week remain intact.
The USD continues to fail to make new highs.
This continues to bode well for precious metals in the medium to long term.
COT for precious metals continue to improve.
COT data for the commodity backed currencies continue to show deterioration.
COT data for risk indicates caution.
 
Therefore our recommendations based on our COT readings for next week are as follows:
Continue accumulating precious metals on dips
Continue selling the AUD and NZD into any strength
Sell the CAN $
Sell the GBP
Sell the EURO
Stay away from risk”
 
Now let's see how we fared on our recommendations:
Buying precious metals on dips was a very good call
Selling the commodity currencies was once again given another opportunity
Staying away from risk was also good.
 
A reasonable week.
 
A busy week in terms of data with good Central Bank activity culminating in the US employment data on Friday.
 
USD:The US$ Index closed sharply lower last week.
We start on Tuesday with Manufacturing PMI expected to dip from 57.8 to 56.6.
On Wednesday we have Crude Oil Inventories.
Thursday we have the usual Unemployment Claims figure estimated to be 241,000 from the previous 244,000.
Finally on Friday we have the all important Employment numbers. Average Hourly Earnings is thought to rise from 0.2% to 0.3%. The NonFarm Employment number is expected at 181,000 from the previous 222,000 and the Unemployment rate is anticipated to decline slightly from 4.4% to 4.3%.
COT data shows that large commercials decreased their net short position in the US$ Index from -7,011 to -2,800. This is now a 52 week extreme so we therefore alter our view from SLIGHTLY BULLISH t oBULLISH.
 
EURO:The EURO closed sharply higher against the USD last week.
Again there is no data for the EURO this week.
COT data for the Euro shows that large commercials very slightly decreased their net short position last week from -118,452 to -115,535. This is a 52 week low so we remain VERY BEARISH.
 
GBP:The GBP rose sharply against the USD last week.
A busy week for the GBP.
On Tuesday we have manufacturing PMI thought to be 54.5 from 54.3.
On Wednesday we have Construction PMI expected to decline from 54.8 to 54.2.
On Thursday we start with Services PMI estimates to rise to 53.7 to 53.4.
This is followed by the BOE Inflation Report; the MPC Official Bank Rate Votes expected to remain unchanged at 3-0-5; the Monetary Policy Summary and finally the BOE Governor speaks.
COT data shows that large commercials increased their net long position from +13,803 to +21,158 last week. This continues to be close to a 52 week low so we remain BEARISH.
 
YEN:The YEN closed slightly higher against the USD last week.
There is no data for the YEN this week.
COT data shows that large commercials decreased their net long position from +147,646 to +138,464 last week. This continues to be close to a 52 week extreme. We therefore remain BULLISH.
 
AUD:The AUD closed reasonably higher against the USD last week.
We start on Tuesday with the Cash rate expected to remain unchanged at 1.50%. This is followed by the RBA Rate Statement.
On Wednesday we have the Trade balance number thought to decline from 2.47B to 1.85B.
On Thursday we have the RBA Monetary Policy Statement. This is followed by Retail sales expected to fall from 0.6% to 0.2%.
COT data shows that large commercials increased their net short position from -62,449 to -71,209 last week. This is 52 week extreme so we alter our view from BEARISH to VERY BEARISH.
 
CNY: Two items for the CNY this week.
On Sunday we have manufacturing PMI expected at 51.5 from 51.7 and Non-Manufacturing PMI.
There is no COT data for the CNY.
 
COT data of note on products we regularly comment on in our DAILY REPORTS and WEEKLY BONUS VIDEOS and for those products which show large commercials with extreme net positions.
 
RISK:
S&P500: The S&P500 fell slightly last week. Large commercials slightly increased their net short position from -19,363 to -19,707. We therefore remain SLIGHTLY BEARISH.
RUSSELL2000: The RUSSELL2000 closed meaningfully lower last week. Large commercials slightly increased their net long position from +8243 to +8,535. We therefore remain NEUTRAL.
NASDAQ100:The NASDAQ100 closed slightly lower last week. Large commercials increased their net short position from -31,885 to -46,573 last week. We therefore remain SLIGHTLY BEARISH.
VIX: VIX closed sharply higher last week.
Large commercials slightly decreased their protection last week increasing their net long position from +139,931 to +134,498. This continues to be close to a 52 week extreme so remain BULLISH on risk protection and BEARISH on risk.
 
COMMODITIES:
GOLD: GOLD rose sharply last week. Large commercials increased their net short position from -73,635 to -103,343 last week. Now that large commercials hold a net short position which is lower than 200,000 but is no longer at a 52 week extreme we alter our view VERY BULLISH to SHORT TERM CAUTIOUS.
SILVER: SILVER rose sharply last week. Large commercials increased their net short position from -21,914 to -29,532 last week. This is no longer a 52 week extreme so we alter our view from VERY BULLISH to SHORT TERM CAUTIOUS.
COPPER: COPPER rose very sharply last week. Copper is an important metal as it is a leading indicator for many commodities. Large commercials increased their net short position from -17,580 last week to -23,341. Large commercials generally carry a net neutral position. This is no longer a neutral position. We therefore remain SLIGHTLY BEARISH.
CRUDE OIL: CRUDE fell very slightly last week. Large commercials increased their net short position from -398,320 to -422,066 last week. We therefore remain SLIGHTLY BEARISH.
 
The gold:silver ratio decreased from 76.03 to 75.95 indicating slight silver outperformance last week.

DEBT:
US 30 YEAR BOND: The BOND fell meaningfully last week. Large commercials increased their net short from -34,353 to -43,474 last week. We remain SLIGHTLY BEARISH.
 
OTHER FX:
CAN$: The CAN$ rose very strongly against the USD last week. Large commercials substantially increased their net short position from -22,327 to -41,516 which is close to a 52 week extreme. We therefore alter our view from BEARISH to VERY BEARISH.
NZD:The NZD rose reasonably against the USD last week. Large commercials slightly decreased their net short position from -38,120 to -37,180 last week. This remains close to a 52 week extreme and we therefore remain VERY BEARISH.
AUD/YEN:The AUD closed higher in this pair. COT data for the AUD showed marked deterioration for the AUD and slight deterioration for the YEN last week. This bodes badly for risk in the short term.
 
THOUGHTS FOR NEXT WEEK
A number of changes in COT this week.
The USD Index continues to fail to make new highs. This continues to bode well for precious metals in the long term.
However COT for both gold and silver warrants short term caution.
Commodity backed currencies especially the AUD, CAN$ and NZD continue to be worrying.
 
Therefore our recommendations based on our COT readings for next week are as follows:
Take short term profits on precious metals. We have had an exceptional run
Continue selling the AUD, CAN$ and NZD.
Stay away from risk

For timely, accurate trade signals follow our STTS service.

For those who want to join the lucky ones receiving real time, accurate and 100% honest and transparent trade signals visit and subscribe here.

Stay nimble. Good luck trading.
 

CHECK OUR INTERACTIVE ECONOMIC CALENDAR FOR FULL LIST OF UPCOMING DATA RELEASES

DISCLAIMER
The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Users acknowledge and agree to the fact that, by its very nature, any investment in CFDs and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.
Any recommendation, opinion or advice contained in such material reflects the views of TFF, and TFF expressly disclaims any responsibility for any decisions or for the suitability of any security or transaction based on it. Specifically, any decisions you may make to buy, sell or hold a security based on such research will be entirely your own and not in any way deemed to be endorsed or influenced by or attributed to TFF.
Past performance should not be seen as an indication of future performance. Market and exchange rate movements may cause the value of your investment to rise or fall and an investor may not get back the amount invested.
Investors considering opening a self-trading account should limit their exposure to maximum 10% of their investment capital.
Investments are not obligations of, deposits in, insured or guaranteed by TFF.