MACRO MORNING NOTE August 10, 2017

SBA’s Alastair Williamson concludes the Macro Morning Note from Ocean City, Maryland.. 


World stocks fell for a third session on Thursday and traders moved again into safe haven assets as North Korea Guam missile strike plan ‘ready by mid-August’. Yesterday’s end of U.S. cash session saw a tentative recovery in risk appetite via ‘BTFD’, but as of 7am est. risk off in U.S. equity futures is evident with SPX500 -53bps. UST Yields remain suppressed with traders flowing into bonds for protection rather than stocks at ‘ATH’. WTI probes into the high 49 handle post EIA showed a drop in crude inventories.

US Event Calendar

  • 8:30am: Initial Jobless Claims, est. 240,000, prior 240,000; Continuing Claims, est. 1.96m, prior 1.97m
  • 8:30am: PPI Final Demand MoM, est. 0.1%, prior 0.1%; Ex Food and Energy MoM, est. 0.2%, prior 0.1%; Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.2%
    • 8:30am: PPI Final Demand YoY, est. 2.2%, prior 2.0%; Ex Food and Energy YoY, est. 2.1%, prior 1.9%; Ex Food, Energy, Trade YoY, prior 2.0%
  • 9:45am: Bloomberg Consumer Comfort, prior 49.6
  • 2pm: Monthly Budget Statement, est. $52.0b deficit, prior $90.2b deficit

Starting in Europe, where the CAC40, DAX, and UK100 are under pressure over geopolitical tensions accelerating in North Korea. For now, tensions are high with the very real threat of a hot flare up in the region, thus Asian stocks are lower, and it’s why European traders are following Asia’s sentiment. In Europe, traders are jumping into bonds for safe haven plays and flowing out of equities..

Japan’s sentiment remains sour at close of trade; Nikkei 225 down 0.05% hitting a 1-month low. Losses were seen in the Chemical, Textile and Rubber sectors led index  lower. Markets in Japan remain depressed with the Defense Minster saying his country is ready to protect Guam. This follows north Korea’s threat to fire missiles at Guam. The Nikkei225 fails to hold 20,000 mark now probing into the 19620 level -83bps and USD/JPY probes into the 109 handle -22bps.

With the escalating war of words advancing between North Korea and the United States. It’s important to understand where we are….

Traders are adding to positions in the Dollar and Yen this morning following geopolitical tensions in North Korea. All other G-10 currencies remain suppressed.

The big story in commodities is precious metals inflow with silver probing above 17 handle and gold tagging 1280. WTI +40bps to the high 49 handle following a bullish EIA report prior session. Base metals including copper and iron ore are under pressure. Bitcoin surges above the 3400 handle with our upside target 3700.

Major US equity indexes come under pressure following geopolitical tensions in North Korea. Small caps lead the charge down…

SPX500 ignores flattening yield curve, declining commodities, and a collapsing dollar..

Global Dow Index in various regions on a monthly timeframe

SPX500 Point of Control 2090 with a massive premium rotation will at some point hit an unfair high then revert back to mean…

Triangle of Death in Biotech

High timeframe perspective of silver and gold

VEU/SPY Ratio could indicate U.S. outflows

SPX500 monthly

<USHL5> compression will lead to a major move in SPX500

CPCE .83

Major cold pattern east of the rockies for August

via http://www.solarham.net/

Solar activity remains at very low levels. Region 2670 is magnetically simple and not considered a threat from strong solar flares. Geomagnetic activity is also quiet and is expected to remain so for the next few days. Widespread aurora is not in the short term forecast.

WTI monthly/weekly pivot support 44.81 probing 50.45 10sma monthly..

UST10Y monthly/weekly  pivot 2.13 support expecting a reversion back due to Geopolitical tensions in North Korea..

SPX500 monthly/weekly  R2 2398 to R3 2578 expecting blowoff top with a reversion back to monthly pivot 2090..

U.S. Dollar monthly/weekly  S2 92 support attempting a counter trend..

CRB Index monthly/weekly  testing 181 pivot…