Today’s Key Market Drivers: 7th June 2019
I was dead wrong.
My expectation was that the ECB would release a downbeat and sombre policy statement on Thursday and I could not have been further from the truth. Mario Draghi refused to be drawn on further stimulus and left the official cash rate at 0% and giving nothing to the market that future stimulus was coming.
The Euro v US Dollar rallied on the more upbeat ECB statement and is threatening on the daily chart to break out of a trend line and head back to the 200 EMA.
Risk on sees the Yen lose out.
Since Jerome Powell’s statement in Chicago on Tuesday, the stock market has been rallying strongly clocking up another solid day of gains. Traders continue to price in their expectation the Fed will be forced to drop rates in coming months selling the safe haven Yen and Swiss Franc and switching to the Euro, Aussie, Kiwi Dollar and Pound in the short term.
Keep it simple and narrow your focus. When the stock market is rallying the Yen and Swiss Franc will likely be on the decline as traders turn their attention to higher-yielding currencies where the Central Bank interest rates are higher than 0%.
The term “Risk On” simply means traders are buying what is usually deemed to be riskier assets such as stocks and emerging market currencies. “Risk Off” is when traders are selling stocks and buying safe-haven currencies, bonds and gold.
US and Mexican trade talks resume.
Futures markets popped higher late into Thursday afternoons trading session as news broke US and Mexican officials had resumed trade talks. One high ranking official said. “We are still talking about all the legal aspects of the cooperation that we are having on migration.”
President Trump recently sent the Mexican Peso south in a screaming hurry saying the US would add 5% tariffs on Mexican imports unless Mexico adjusted its migration program. The Mexican’s have immediately come to the party and the market is expecting the Trump tweet to be taken very seriously and a resolution announced in coming days. Simply put, the Mexican economy cannot afford 5% tariffs on US exports.
In other news.
Today sees the official Canadian and US jobs numbers for May released with the US jobs figure to be closely watched for any further signs the US economy is slowing. The US unemployment rate is expected to stay at 3.6% and 180,000 jobs created last month. The unofficial private ADP jobs number says the US only added 27,000 jobs in May so if the official number today is anything close to the private number we will likely see the US Dollar falling and stocks rising with trading increasing their bets a Fed rate cut is just around the corner.
The meaning of life as a parent is to see your kids dreams come true.
Please excuse me for going off script for just a moment today as I share with you a lesson I learned as a parent but it is also a lesson in life. Two years ago my wife and I made the difficult decision to send our son away from home for years 11 and 12. It was not something I was comfortable with, I had my doubts, the financial sacrifice was substantial and the thought of not seeing our son at home with us through years 17 and 18 really itched at me. But he wanted to go, he had a dream to chase and we decided to do whatever it took to support that dream.
Jack subsequently spent year 11 in Spain and has spent the last 12 months here in Florida living, training, competing and being schooled in his quest to gain a scholarship to a Division 1 US Tennis University. Two years ago, we sent a young, shy, 5-foot 11 immature young man to the other side of the world in the hope of achieving what seemed like a very unlikely dream. We arrived here in Naples this week to find a grown-up, 6 foot 3, mature young man, graduating from high school and accepting a tennis scholarship from a Division 1 University in Utah.
The meaning of life as a parent is to see your kids happy and content and the lesson I learned this morning watching Jack train is that if you want something bad enough and if you are willing to do whatever it takes, dreams really do come true no matter who you are, where you come from or what odds may be stacked against you.
The Sunrise image below links to a 3-minute short video sharing a little insight into a young man’s dream coming true.
Trading or in life I will continue to remind you that it is imperative that you back yourself, you remain positive, believe in your quest, and more than anything bust your ass every day, EVERY DAY, not just on the days you feel like it. No matter your age, your experience or your background, you can achieve anything you want in life.
The best middle finger to give those who doubt you is to achieve massive success.
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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