A Turning Point For The Secular Bear Market?

After the minutes of the Federal Reserve have expressed all the possible uncertainty about the evolution of the U.S. monetary policy in the coming months, the macro data of the coming week do not seem to be so important to move the feedback of operators on bond and forex. The bond is now very close to the psychological area of 4% on T-bonds and 3% of T-note that could represent a real turning point for the secular bear market interest rates. As for EurUsd, the resistance of area 1.34 is still standing, last level before 1.39/1.40. Concerning the macro data of this week, focus on durable goods orders on August 26th, consumer confidence and the Shiller index on price of houses on August 27th, the revision of GDP for the second quarter on August 29th, personal income and spending on August 30th.

ITALY-GERMANY SPREAD MAY BE THE NEW TARGET

The German elections are approaching in Europe and the IFO scheduled for release on August 27th will be a good reason for speculation. The spread between Italian BTPs and German Bunds could be under pressure due to the Italian retail sales scheduled for August 28th, the German unemployment on August 29th and the Italian one on August 30th.

THE MONTH OF JPY IS COMING TO AN END

Japan is always a leader with lots of macro data coming this week. First of all, on August 29th retail sales and then the unemployment on August 30th, together with inflation and industrial production. Considering that at the end of August the favorable month of Jpy is coming to an end, we must take note of an underlying structural weakness for the Japanese currency that, at this point, becomes a good trading opportunity especially against the dollar. For this reason, we would go long on UsdJpy.
USD/JPY" width="600" height="443">
EMERGING COUNTRIES

The darkest period of the year for emerging currencies is also coming to an end, and this should result in a lower voltage phase for local currencies. Among the more relevant ones, we remember Hungary on August 27th with the decision on interest rates and unemployment, while Poland on August 26th with unemployment and retail sales that will be the prelude to the GDP data on August 30th.

The decision of monetary policy in Brazil is much awaited and is scheduled for August 28th, and will prelude the data on GDP on August 30th; the view of the central bank is fundamental to understand what defenses will be take to stem the decline of the Real. The economic growth will also be a focus for South Africa, as we will be able to know the GDP on August 27th. Technically, the Rand seems to be quite interesting to start speculating against Euro, and for this reason we would enter short on EurZar.

SHORT EUR/ZAR AT 13.70 STOP 14.50