Leveraged Fund Increased Bullish Euro Bets | Landslide Victory For Macron | Sterling Faces Pressure on Brexit | Rig Counts Higher And Oil Lower

Posted by Naeem Aslam | 19/06/2017 09:20

Macron Clinched Another Landslide Victory
Leverage Bets At Three Years High
Pound Lower As Brexit Process Kicks Off
Europe Tracks Asia But Upward Moves Unstable
Higher Rig Counts Keeping Pressure on Oil Price  

Macron Clinched Another Landslide Victory
Over the weekend, Emmanuel Macron clinched another victory as his one-year-old party had an unprecedented victory in France's parliamentary elections. Macron has shown that if the agenda is right, people will support them and established parties can be crushed. He is set to win the biggest majority in the parliament which has not been seen in the past 15 years, thanks to the massive turnout.
 
Leverage Bets At Three Years High
The data from the leveraged funds net short/long on the euro show that investors are bullish for the euro. Leverages long bets on the euro have reappeared for the first time in nearly three years while the price of the euro-dollar is trading at the same level as before Donald Trump won the elections. The data confirm that the hedge funds are eyeing some extra cash as conditions favour that the economic health of the Eurozone has improved while the risks have dissipated.
 
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But for now, the euro has failed to push through new highs and decided to fold in against the dollar. It is trading closer towards the low of the day which is at 1.1190 and a break of that would open the floor towards the level of 1.1164.
 
Pound Lower As Brexit Process Kicks Off
As for the British pound, it is facing fresh pressure against the dollar as the U.K. prepares its course to leave the EU. The formal negotiation process begins on the UK's exit from the EU. Theresa May is still struggling to cling on to her position as there is still no deal with northern party DUP. Nearly a dozen MPs are standing in line to call for the vote of no confidence in her. Time is running out fast and the critical days of 28-29 June are not far at all when the votes will be called in on the Queen's speech.
 
Europe Tracks Asia But Upward Moves Unstable
European investors are tracking the gains over in Asia but generally speaking, the equity markets are looking very wobbly as the tech sector is under question. The odds are becoming stronger that soon we could see a sharp sell-off across all assets. The reason is pretty simple which is that the Fed is tightening their monetary policy on the back of economic weakness and investors are not a fan of this move at all. Central banks provided much stability by keeping the monetary policy more accommodative and now the risk of unmeasured approach is somewhat haunting the markets. Too many people’s surprise, it was the hawkish stance in the MPC member's committee which shocked many traders. The 3-5 vote among the MPC members has shown two things; the hawkish stance and the risk which members are willing to take to restore the monetary policy to its normal level.
 
Higher Rig Counts Keeping Pressure on Oil Price  
Oil traders only like to pay attention to the US stockpiles data and the firework only comes on the back of that. Most traders ignore other oil stockpiles as they do not have that much of an importance. Last week we have seen the rig counts increasing again and this shows that the US shale oil production is booming. The price of oil is trading lower as a result of this and we do see the price trending to the downside. The move to the downside could be more gradual rather than any ballistic until Wednesday (when the US crude inventory data is due).
 

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