US 10y bonds are back above 2.00% yield, OPEC+ cap extended to March 2020, US job market continues being hot
3+9 minutes read report, 2+6 pages
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Given that only the first page of this report will continue being available to the non-donating audience, there is no point continuing bragging about the presented forecasts.
The message was meant to be “ Read me, my understanding is tuned with the actual market’s behavior, look how my forecasts did”. One would be able to remember the forecasts, re-check them and come to the conclusion that the content is valuable for him to present it to his supervisor and start buying it and re-distributing it to his clientele, or donate to be able to continue enjoy it.
Now the message of the opening paragraph will be “This is the expected rhythm of the markets on next week”.
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I am expecting the continuation of the uptrend of equities, oil, EUR, AUD, CAD, NZD and would rebuilding long positions on technically significant support levels.
Global manufacturing continues being weak, job markets continue being strong, global competition puts a significant pressure on inflation, central bankers are commit-ed to respond quickly to any additional need for extra liquidity. My concern continues being the possibility of President Trump going after the European and Japanese car industry. The scenario of a first rate cut on July 31st is certain despite the strong NFPs (us employment) on Friday.
Major events of last week:
- OPEC+ : The cap on oil production has been extended up until March 2020. Iranian worries about the increasing role of Russia in the organization have been muted and OPEC made one step forward making its unofficial expansion a little more official. Iran is currently enjoying a military cooperation with Russia and does not like the idea of strengthening relations between Russia and Saudi Arabia.
- Iran: The Iranian regime communicated that its uranium enrichment level would exceed the limit agreed to in the 2015 Iranian nuclear deal.
- Greek General Election: The Economist is currently publishing a worth reading article on conservatism. The Greek political landscape and Sunday’s elections are providing some promising answers to the article’s questioning. #kairos gia… Is it time for supporting open minded / educated / pragmatist / informed MPs that could help Greece move forward or is it the time to vote populists MPs, remains to be seen.
- EU-Mercosur trade deal: EU agreed to decrease taxes imposed to meat imports from Brazil, Argentina, Paraguay and Uruguay.
- ECB: Christine Lagarde, former France finance minister and current head of the IMF, is set to succeed Mario Draghi. Even higher volatility is expected at least during her first two ECB Press Conferences, as speaking the nonhuman language of a Central Bank Governor will take her some time to get rid of her politician’s mentality.
- Swiss stock exchange: Last December, the EU agreed on a 6-month grace period before Switzerland decides on compliance with EU rules (migration, social security, contribution to the EU’s budget, ruling of the European Court of Justice). No progress has been made, and Monday was the first day that the Swiss stocks were traded in uncharted territory, as the Swiss exchange no longer enjoys the “equivalence regime status”.
- Protests: Protests in Hong Kong, against the new extradiction law to China, continue.
Major events of next week:
- OPEC’s monthly report on oil
- Monetary meeting of the BOC (Central Bank of Canada)
- Jerome Powell, head of the FED, to testify before the Senate Banking Commitee
Issued by Labis Michalopoulos, CFA
For the readers of the report:
Redistribution is allowed as long as the author and his contact details are referenced.
This material is for Qualified Investors and Professional Clients only and should not be relied upon by any other person.
Past performance or past accurate forecasts is not a guide to future performance and the accuracy of future forecasts and should not be the sole factor of consideration. All financial investment decisions involve an element of risk.
This report is for information purposes only and does not constitute an offer or invitation to anyone to invest or trade and has not been prepared in connection with any such offer.
Any research in this document has been independently produced by Labis Michalopoulos, CFA for his own purpose. The views expressed do not constitute investment or any other advice and are subject to change. The author has an interest in the currency pairs, indexes and any other security disclosed in this report, as he is an active trader.
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For qualified perspective clients of the advisory service:
GIPS standards are all about full, fair, consistent and comparable presentation of actual returns of the past. No models, no back-testing, no promises. I am doing that. I am publishing in real time, via a 3rd party, my actual returns since inception where one can see the most strict, comparable, revealing metric of the industry: the monthly Sharpe ratio.
My current monthly Sharpe ratio stands at 0.27 as can be found at www.forexfactory.com/dxmix
My current annual Sharpe ratio is 0.27 multiplied by √12 = 0.27 x 3.46=0.93 Annual Sharpe Ratio
The numbers used to stand at 0.5 monthly Sharpe ratio and 1.73 annual Sharpe ratio up until the August of 2019 for 45 consecutive months. On 24 August 2018, I mistakenly ordered to open a position 10 times bigger that I am used to. My equity level is currently back on track, but my statistics are no longer as impressive as they used to be. My 54 months, since inception, monthly Sharpe Ratio (that includes the leveraged AUDUSD trade) stands at 0.27, equal to 0.93 Annual Sharpe Ratio.
I cannot claim that I will be performing with the return of my best months, but I can tell that I will hover around my average returns. Claiming with a 95% confidence, that my next month* return will be within my average monthly return ± 2 standard deviations is a well educated statement I can make anytime.
My average monthly* return ± 2 standard deviations is from -16.54% up to 20.49%
My average monthly* return ± 2 stadard deviations becomes -5.74% up to 9.47% , excluding the 4 months effect of the one time mistake trade.
* the monthly returns are the actual returns within a month. They are not presented on annualized basis.