Summary:

  • Stocks on the rise at the end of H1
  • Euro attempts to firm up as inflation meets expectations
  • USDCAD pulls back from 1-year high after data
  • Where next for Wheat?
  • Why another Bitcoin rally could be unlikely?

 It looks like being a good end to the week for stock market bulls with a sea of green across major indices. Looking at American markets, the only index in the red is VOLX, and seeing as this is the volatility index for US stocks, its decline is also a good sight for equity longs.

 Euro Area inflation accelerated in June reaching a magic 2% threshold and matching the median estimate built on economists’ forecasts. At the same time core inflation excluding the most volatile components such as food and energy ticked down to 1%, but it was in line with expectations as well. The euro largely brushed off the Eurostat report and held its gains.

A batch of data from North America has caused a notable move higher in the Canadian dollar while the US equivalent has fallen back a little in the immediate reaction. Taken together this has seen the USDCAD pair drop back towards the 1.32 handle after hitting its highest level in a year earlier this week. First off, lets look at the Canadian data as it has caused a larger market reaction. In M/M terms GDP rose by just 0.1% in April, but given that the consensus forecast was for a reading of 0.0% this still counts as a beat.

Despite improved fundamentals commodity price has been under pressure in the previous weeks. In general the production is falling, especially in the US, what improves the outlook for commodities. Nevertheless, when it comes to wheat (unlike soybean or corn) it is also important to pay attention to the global production figures. In this analysis we highlight some factors that may justify the continuation of the current downtrend. We will take a look at fundamentals, technical analysis, seasonality, speculative positioning and geopolitical factors that may influence wheat prices.

Everybody well remembers what happened with virtual currencies in December last year as most of them, if not all, saw a gargantuan rally. Since then, a steady downtrend has been present, and right now there are not too much reasons to be so bullish on digital currencies. This view has been recently shared by a famous Japanese economist Yukio Noguchi who is an advisor to Waseda University’s Business and Finance Research Centre.