Confidence Shakes Swiss Franc
A much weaker-than-expected business-confidence survey
out of Germany is shaking up the euro, sending the nascent Euroland currency and
its highly correlated brethren unit, the Swiss franc, to a new contract low.
Swiss franc futures
(
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PowerRating) are descending for a seventh straight week and
are making good on their Implosion-5 List
reading.Â
September dollar index futures
(
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PowerRating) are jumping higher and approaching
contract highs on the drop in euros and francs. The September contract has
rallied for a third straight day and is up .28 to 111.65. If you have been
following momentum in the futures, you will have noticed that the dollar index
has been on the Momentum-5 List recently and would have made the list had there
not been such a surge Wednesday in the energies.Â
Energies have seen nothing but downside in profit-taking
despite a mild storm threat from hurricane Debby and speculation that OPEC will
not increase production ahead of its September 10 meeting. Natural gas also gave
an indication that it could trade lower by logging a Turtle Soup Plus One
Sell setup (note: the trigger at the old 20-day high has not been hit
because of the powerful 6% surge in the September contract Monday).Â
A stronger dollar continues to weigh on
dollar-denominated precious metals. December gold
(
GCZ0 |
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PowerRating) is trading lower
for a third day, and silver, also from the Implosion-5 List,
continues its steady descent with a 1.8 decline to 485.0.
Ahead of the Fed, Tony Crescenzi
underscored the market’s complacency and certitude about what the Fed will do in
the following post to the TradersWire: “Implied volatility on bond options
has moved still-lower even as the Fed’s FOMC meeting begins. This is clear
evidence that the bond market is expecting little response to the Fed’s expected
announcement of no change in interest rates when they deliver their policy
statement at around 2:15 p.m. today. The expected statement has been widely
anticipated for weeks. At-the-money options are trading with an implied
volatility of 7.6%, unchanged from yesterday, but down from 8% a week ago and an
average of about 9% over the past month. In fact, options prices are at their
lowest since late last year.” September T-bonds
(
USU0 |
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PowerRating) and 10-year notes
(
TYU0 |
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PowerRating)
are trading at break-even levels.Â
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