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Trading Signals and Trade Ideas From FCA Regulated Experts

Mellow Monday?

Posted: 25th July 2022
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Good morning and welcome to episode 653 of ‘Talking Bull’. In this video/podcast we cover the main headlines and what to expect from the day ahead. 

We take a technical look at key markets that are likely to be impacted by today’s events. Also, we participate in a ‘Gun to the head’ challenge where each of us calls a live trade. These will expire at 9pm tonight and we will keep track of the progress over time.

We hope you enjoy it!

For a selection of free educational content, join our Discord server at – https://discord.gg/Db4UWVFvF6

Show notes:

Joe was up 1.83R on EURJPY.

We have included an illustration based on a £1000 account. This will follow the combined return of our morning trades by risking 1% of the trading capital per trade. The 1% risk is a variable monetary amount and will rise and fall based on the success of the calls.

We are currently up 124.27% collectively since we began recording Talking Bull on the 30th October 2019.

News

European recession fears increase

Both German PMI readings were below consensus forecasts and also registered contraction for the month.

The Euro-Zone manufacturing index declined to a 25-month low of 49.6 from 52.1 previously and below forecasts of 51.0. The services-sector index dipped to a 15-month low of 50.6 from 53.0 previously and also below expectations of 52.0.  New orders declined on the month and business expectations also declined sharply to the lowest level since May 2020.

There was an easing of cost pressures, especially in manufacturing and the increase in selling prices eased slightly, although increases were still very rapid in an historical context.

US services sector dips into contraction

The US PMI manufacturing index edged lower to a 24-month low of 52.3 for June from 52.7 previously, but slightly above consensus forecasts. The services-sector index dipped sharply to a 26-month low of 47.0 from 52.7 previously and well below consensus forecasts of 52.6.

New orders growth was subdued while employment growth was weak with a mixture of demand and supply problems. Although cost pressures remained strong, there was a slower rate of increase with selling prices increasing at the slowest rate since March 2021.

US yields decline further

The PMI data overall increased hopes that inflation pressures were peaking.

US yields declined again after the US data with the 10-year yield declining to near 2.75% and the 2-year yield below 3.00%.

Euro shorts increase

CFTC data recorded a further increase in short Euro positions to near 43,000 contracts from 25,000 previously limiting to some extent the scope for further Euro selling.

Limited relief for UK PMI data

The UK PMI manufacturing index edged lower to a 25-month low of 52.2 for June from 52.8 previously and was in line with consensus forecasts. The services-sector index also declined to a 17-month low of 53.3 from 54.3, but was slightly above expectations of 52.9.

New orders increased slightly on the month while business optimism improved only marginally from 25-month lows recorded the previous month. There was a slight easing of upward pressure on costs and the increase in prices charged also moderated as companies responded to weaker demand.

Waiting for the Fed

The highlight of the week will be the Federal Reserve policy decision with expectations of a second successive increase of 75 basis points.

Markets will, however, be on alert for unofficial briefings from the Fed after the previous meeting when the larger than expected rate hike was flagged in advance.

Data Today

09.00: Germany IFO index

Key events over the next week

July 26th: US consumer confidence

July 27th: Australia consumer prices

July 27th: Federal Reserve policy decision

Gun to head challenge – Update

Today’s trade idea

 

 

 

 

Have a great week everyone.

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