Macro Dragon: Month/Quarter/Half-Year End...

Macro Dragon: Month/Quarter/Half-Year End... 

Top of Mind…

• So here we are in Asia Tue 30 Jun 2020 morning, at the cusp of the month/quarter/half-year end… & so far pretty smooth, no crazy moves one way or another – yet its all about how the US session closes later today.  

• Bear in mind it’s a pretty potent wk as we highlighted on yesterday’s Welcome to WK # 27... Pivotal US 4th of July Wkd – with everything from PMIs, ISMs, NFP, lot of Fed speak & of course shortened wk in the US.

• Whilst from a price action perspective, we probably have to wait until end of next wk to get a clean technical read on things (ex. Quarter end/start flows), there are two key things that KVP things are the most important going into the monthly & quarterly closes tonight.

• First is Gold $1771, again very bullish close last wk, not just above the pivotal $1750, yet above $1770 & on track to close well above May’s monthly close of $1730.

• Again folks, we’ve been saying this on the Dragon for a while – the breakout higher in gold is a BIG deal… check out the daily | weekly |  monthly charts… SpaceX rocket right there! And obviously whilst we keep referring to gold, we mean the entire precious metal complex & asset classes.

• Second is the US Dollar $97.45 (DXY), post the bearish confirmation of the last few weeks (three consecutive weekly closes below $98.00) the DXY is on track to have it first monthly close sub the pivotal 98.00 lvl since the end of Jan 2020.

• If this holds – one of KVP’s key view is we are in the midst of a breakdown lower in the USD, with DXY needing to stay sub current 200DMA of c. 98.40. This bodes well for a number of different reasons, not just gold & commodities, yet generally EM assets & overall risk-on sentiment.

• Ze dollar bulls would argue, the weekly 200MA is c. 96.50 & so far the DXY keep bouncing up from that lvl to the 100WMA of 97.50, i.e. we have not really broke lover on the USD.

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To Keep In Mind Today

• JP: U/R, Flash IP, Housing Starts
• CH: Mfg. PMI 50.9a 50.4e 50.6p, Serv. PMI 54.4a 53.3e 53.6p
• NZ: ANZ Business Confidence
• AU: Private Sector Credit
• UK: Current Account, Final 1Q GDP -2.0%e/p, Biz Inv  
• EZ: Flash CPI -0.1%e +0.1%p, Flash CORE CPI +0.8%e +0.9%p
• US: Chicago PMI 45.0e 32.3p, FOMC speakers Williams & Brainard @ 23:00 SGT, Powell @ 00:30, Kashkari @ 02:00  

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Start-End = Gratitude + Integrity + Vision + Tenacity. Process > Outcome. Sizing > Idea.

This is the way

Namaste,

KVP