The Crude Chronicles - Episode 145

Oil Traders Cut Longs AgainThe latest CFTC COT institutional positioning report shows that oil traders reduced their net long positions again last week. The latest data reflects a move down to 268k contracts from 280k contracts prior and marks the seventh straight week of reductions in upside bets. The total long position has shifted from 334k contracts on May 27th to the current level, showing an overall reduction of roughly 20% in that timeframe.Higher USD Weighing on Oil Oil prices have been coming off steadily in recent weeks due a number of reasons. Firstly, the uptick in the US Dollar has taken a heavy toll on commodities prices generally, including oil. With the Fed having turned even more aggressively hawkish in recent month, highlighted by June’s .75% hike, the US Dollar has been on a heady run higher. With traders bracing for the prospect of an even larger hike this month, the US Dollar is continuing to subdue oil prices.Recession FearsAlong with the rise in the US Dollar, oil prices have also come under pressure from increasing recession fears. With inflation running riot globally and central banks in a race to tighten at a faster pace, many forecasters are warning of dark clouds on the horizon. We’ve heard many central bank heads warning that a slow down is likely coming over the remainder of the year and with the expectation that such conditions will damage oil demand, prices have been coming off.OPEC Ups ProductionWorth remembering also that OPEC has heavily stepped up supply over the summer period. The oil producing cartel agreed to lift output from around 400k barrels to 650k additional barrels up to September. This additional supply has entered the market at a time when demand concerns are emerging, further weighing on sentiment.Muted Reaction to EIA ReleaseThe latest data from the EIA this week did little to help oil bulls. The group posted a -0.4 million inventories reading. However, on the back of the heavy surplus the prior week, the data was unable to shift sentiment for crude prices which continue under pressure on Thursday. Furthermore, gasoline stocks were seen in a 3.5 million barrels surplus, reflecting weak demand during the typically high-demand summer driving season.Technical ViewsCrudeFollowing the breakdown through the rising trend line from yearly lows, crude prices have been trending lower within a narrow bear channel. Price is currently sitting on support at the 95.93 level which has underpinned the market recently. However, with both MACD and RSI bearish, the focus is on an eventual break lower and a move down towards the 83.75 level next.

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NZDUSD, H4 | Potential Bullish Continuation

Type: Bullish BounceKey Levels:Resistance: 0.6325Pivot: 0.62025Support: 0.61394Preferred Case:On the H4, with price recently breaking the descending trend channel, short term ascending support and moving above the ichimoku cloud, we have a bullish bias that price will rise from the pivot at 0.62025 at the overlap support. If price breaks the intermediary resistance at 0.62702 at the swing high in line with the 61.8% fibonacci retracement and 100% fiboancci projection, we will have upside confirmation that price will rise to the 1st resistance at 0.6325 at the swing high in line with the 78.6% fibonacci retracement.Alternative Scenario:Alternatively, price may break the support structure at the pivot and drop to the 1st support at 0.61394 at the pullback support.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/nzdusd-h4-or-potential-bullish-continuation21"
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Investment Bank Outlook 21-07-2022

Credit SuisseFX markets have been in consolidation mode over the past week, with the broad USD retracing lower after briefly trading above the March 2020 highs on 14 July.Hawkish Fed officials failing to push for a 100bp hike at the 27 Jul FOMC following strong June CPI data, and more aggressive tightening moves by ex US central banks appear to be the key drivers of the move, along with EUR’s inability to hold below parity. The pullback in the broad USD has already spurred questions on the durability of greenback strength, likely reinforced by recently stronger risk appetite. Our bias in favour of a stronger USD remains nevertheless intact, especially outside of G10, where the optics of an EMFX-led rally belie a still challenging picture. Today’s ECB rate decision is the key event of the week. The already challenging task of reconciling rate hikes with stability in peripheral spreads was further complicated by calls for larger rate increases and by a fresh bout of political risk in Italy, which is set to culminate today in a make-or-break speech by PM Draghi. Markets seem largely positioned for PM Draghi to rescind his resignation. We think this limits the scope for EURUSD relief rallies on a benign outcome to the top end of our 0.97-1.04 target range and creates instead potential for a swift and messy return to below parity if political risk were to persist and become more entrenched. As for the ECB meeting, lopsided action addressing only one of the two policy priorities (hiking rates and containing spreads) is likely to be unhelpful for EUR. A sustained rally in EURUSD above 1.04 is in our view just not in the cards, as long as Europe faces ongoing energy supply challenges. We remain long a 12 Sep ’22 expiry 1.00 / 0.97 EURUSD put spread.MUFGEUR: Has the ECB had a last-minute change in thinking?EUR/USD extended gains yesterday fuelled not just the broader sell-off of the dollar but also a sudden last-minute shift in expectations on the size of the rate hike expected to be delivered by the ECB. Firstly, the broader dollar sell-off was fuelled by the further recovery in risk assets. The S&P 500 2.8% gain yesterday took the key index to 7.3% above the closing low on 16th June. The improved appetite could well be a reflection of a view that bad news on Q2 earnings is already priced. As of last Friday according to Factset, only 7% of S&P 500 companies had reported and 60% had reported a positive EPS surprise – well below the 5yr average of 77%. The forward 12mth P/E ratio is currently 15.8, below both the 5yr average (18.6) and the 10yr average (17.0). Still, it is early days yet and this rally could well peter out if earnings results or guidance of bigger names was to disappoint – a scenario that seems a very plausible risk at this juncture. INGUSD: Non-US events in focusG10 FX volatility decreased significantly yesterday as markets started to take a wait-and-see approach ahead of today’s key risk event: the ECB policy announcement. Arguably, developments in the US are playing a secondary role this week, with markets mostly focused on European events (political, geopolitical and economic). Still, US housing data continued to show signs of weakness as mortgage rates rose. Given that this sector accounts for 2.5% of the US economy and that housing transactions have a high correlation with retail sales, expect recent grim housing numbers to further fan recession talk.Meanwhile, the two drivers of dollar weakness earlier this week – risk sentiment recovery and the shrinking Fed policy advantage vs other central banks – have started to fade, and the dollar has entered some stabilisation mode ahead of major events in Europe today. The only data releases in the US today are the Philadelphia Fed Business Outlook and jobless claims, but expect very little market impact. As we expect the post-ECB reaction to trigger some EUR/USD weakness and given the other downside risks to the pair (Italian government collapse and curtailed Russian gas supply), we see room for some dollar rebound today. DXY could end the week in the 107-108 region.Elsewhere, the Bank of Japan failed again to deliver any surprises at its rate announcement this morning. The policy message was a mere reiteration of the list of priorities for the BoJ: growth is more important than JPY weakness. With no support coming from a less dovish tone by the BoJ, risks of a move to 140+ in USD/JPY are non-negligible, especially if market sentiment stabilises and the Fed continues to put a floor under the dollar.EUR: Three events, three downside risks?It’s going to be a day like no other in the eurozone today, with three high-impact market events.First, the European Central Bank will deliver its long-awaited first rate hike, and here’s our scenario analysis ahead of today’s decision. Our base case is the following: a 25bp rate hike today, openness to a 50bp move in September, only a slightly changed inflation and growth outlook (mounting downside risks should be highlighted for the latter), an anti-fragmentation tool without too many details and some degree of conditionality. It is therefore possible that the Bank will not shed light on whether a widening of sovereign spreads due to political events (like in Italy now) will be covered by the fragmentation tool. President Christine Lagarde will surely be asked about this, but may try to avoid giving a definitive answer.The chances of a larger hike (50bp) appear to have risen after recent reports suggested this option was being seriously considered by the Governing Council. Markets are currently pricing in 38bp of tightening for today, and 200bp in total by March, which in our view is an overly hawkish expectation and may be revised lower today after the rate announcement. This leaves the euro vulnerable to some correction today in the event of 25bp, and may not receive very sustained support even in a 50bp scenario given the worsening macro picture.

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Daily Market Outlook, July 21, 2022

Daily Market Outlook, July 21, 2022 Overnight Headlines Nord Stream: Russian Gas Flows Have Restarted After Maintenance ECB To Finally Join Rate Hike Club With Big Move On The Agenda Biden Expects To Speak With Chinese President In Coming Days Raimondo Warns Of Recession’ If US Cut Off From Taiwan Chips BoC Governor: Inflation Rate Will Remain 'Painfully High' All Year Draghi Faces The End After Italy’s Coalition Refuses To Back Him Rishi Sunak And Liz Truss In The Final Runoff Vote For UK PM Job Sunak And Truss In A Straight Fight To Become The Next UK PM China’s Covid Cases Remain Elevated, Residents Fear Lockdowns BoJ Stands Pat, Putting Growth Fears Ahead Of The Weak YenThe Day Ahead Asian equity performance is mixed this morning. Italian PM Draghi won a confidence vote in parliament yesterday, but with key coalition partners not taking part, reports suggest that his government is close to collapse. President Biden said he will speak to Chinese President Xi as he considers lifting some sanctions on Chinese exports. Reports suggest that Tokyo will lift its Covid warning level to the highest rating amidst a surge in cases. Meanwhile, the Bank of Japan left monetary policy unchanged after its latest meeting. UK public finances data for June showed net borrowing at £22.1bn, about £3.5bn higher than at the same point a year ago. The European Central Bank is expected to raise interest rates for the first time since 2011. The announcement is due at 1.15pm and the press conference at 1.45pm. Conditions for interest rate lift-off have already been met and the ECB has signalled its intention to raise rates today and at forthcoming meetings. A hike of 25bp is expected although there has been speculation that ECB policymakers may opt for a larger move of 50bp. Policymakers have already indicated that a further increase is likely at the subsequent policy meeting in September and that they might then move by 50bp ‘if the medium-term inflation outlook persists or deteriorates’. Given the prospect that interest rate rises may lead to a widening of euro area peripheral bond spreads, the ECB has promised to unveil a new anti-fragmentation policy tool. Markets will be hoping for some details on this today, including its size and how it would be deployed. However, press reports suggest that discussions on the new instrument are still ongoing. The latest weekly jobless claims will provide a timely insight into the state of the US labour market ahead of next week’s Federal Reserve monetary policy update. The Fed remains concerned that a tight labour market could further fuel wage growth. The June monthly NFP report showed little sign of those pressures easing. However, since then, the weekly jobless reports have moved upwards. They are still low by historic standards, but the recent turnaround is nevertheless tentative evidence that the jobs market may be softening. Early Friday, UK July GfK consumer confidence and June retail sales will give indications of the impact of the ‘cost of living squeeze. Confidence has dropped sharply this year. We look for a small rebound in July but it is still forecast to be close to all-time lows. June retail sales may have been boosted by preparations for the Jubilee celebrations. However, any such impact is likely to be temporary.FX Options Expiring 10am New York Cut EUR/USD: 1.0000 (1.21BLN), 1.0200-10 (1.84BLN) 1.0250 (228M), 1.0300 (405M), USD/JPY: 138.15 (230M), 138.25 (259M) EUR/CHF: 0.9925 (718M), 1.0000 (625M), 1.0075 (440M) AUD/USD: 0.6820 (513M), 0.6950 (472M) NZD/USD: 0.6150 (273M), 0.6225 (200M), 0.6300 (500M) USD/CAD: 1.2700 (520M), 1.2900 (730M), 1.3150 (250M) 1.3195-1.3200 (740M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.0350 ECB decision at 1215 GMT, press conference at 1245 GMT Choice is between 25 bps and 50 bps rate hike EUR/USD is entrenched near the lows of a major downtrend A 50bps move has the potential to lift EUR/USD ahead Jul 27 Fed meeting There is little to fuel a sustained rise as few traders are short as per CFTC If ECB hikes 25bps EUR/USD may sink towards parity before Fed meeting Resistance 1.0250/60, support 1.0100-05, 1.0070-75 Price testing the 20 Day Bearish VWAP 20 Day VWAP is bearish, 5 Day bullishGBPUSD Bias: Bearish below 1.2150 Cable has traded 36 pip range thus far Thursday ECB rate decision at 1215 GMT set to impact GBP/USD (as well as EUR/GBP) Cable could follow EUR/USD south if ECB delivers conservative 25 bps hike Whereas 50 bps ECB hike might lift EUR/USD, and GBP/USD Race to become UK PM down to final two: Sunak and Truss Offers sited at 1.2050 bids 1.1890 20 Day VWAP is bearish, 5 Day bullishUSDJPY Bias: Bullish above 134 BoJ decided to keep policy easy as is, ready to ease more if necessary Economy showing signs of improving, inflation moving to around 2% Downside effects of COVID, supply disruptions and Ukraine conflict still Asked about the passing of former PM Abe and effect on BoJ policy BoJ aim to end deflation, create environment for steady growth unchanged Maintaining current policy important for Japan now JPY crosses bid with shift in central bank expectations 20 Day VWAP is bullish, 5 Day bullishAUDUSD Bias: Bearish below .7050 AUD/USD was idled in Asia and only managed a 0.6880/98 range Market is waiting for reaction to ECB meeting later today before committing Resilient risk appetite and hawkish RBA expectations underpin AUD for now Global growth uncertainty will likely cap exaggerated rallies Price testing pivotal .6940/50 resistance through here opens .70 test 20 Day VWAP is bullish, 5 Day bullishBTCUSD Bias: Bullish above 22k BTC -2.0% to $22,743, fading towards key chart support Needs to hold above $$22,200 to keep rising near-term Would also mark exit from VWAP uptrend channel Those cues may prompt long-trimming till $20k support SE Asia exchange Zipmex suspends withdrawals 20 Day VWAP is bullish, 5 Day bullish

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Market Update – July 21

USDIndex down to 106.62. BoJ stuck to its ultra-accommodative policy stance. Asian markets traded mixed. European and US futures are higher now after paring earlier losses in the wake of reports that the Nordstream 1 pipeline was re-opened as planned. (NASDAQ +1.58%) European markets will wait for the ECB and news on the new anti-fragmentation tool, which may be needed quickly after Italian PM Draghi lost the confidence vote yesterday, with three of his coalition partners withdrawing support. Draghi is likely to resign this morning.

Earnings: Tesla reported adjusted earnings of $2.27 per share on $16.93 billion in revenue in Q2 2022 (+42% revenue). Automotive margins decreased from last quarter and a year ago, impacted by inflation and more competition for EV components. Shares of Alcoa and CSX jumped in extended trading after the companies beat expectations. United Airlines (-6% stock price) reported that it returned to profitability during the second quarter, but results came in below expectations.  Shares of Carnival were under pressure after the cruise company announced that it was selling an additional $1 billion of stock.

ECB Preview: There is a lot riding on today’s ECB meeting, where Lagarde is not just expected to finally lift rates, but also to unveil details of a new “Transmission Protection Mechanism”. There were source stories this week confirming what the minutes to the last meeting and comments since then have made pretty clear, namely that the hawks at the council will be pushing for a 50 bp move.

• USDIndex has dropped to 106.74.
• Equities – USA100 which climbed 1.58%, while the USA500 and USA30 rose 0.59% and 0.15%, respectively. Nikkei and ASX managing gains of 0.37% and 0.5% respectively.
• Yields 10-year Treasury yield meanwhile is up 2.6 bp at 3.05%.
• Oil consolidating between $98-$100. US crude stocks dip, gasoline builds as demand slackens – EIA, Libya’s NOC says production resumes at several oilfields. Canada Keystone export pipeline at reduced rates for third day.
• Gold drifts at $1685.
• FX Markets – EURUSD got a boost from news of gas deliveries to 1.0230. USDJPY has lifted to 138.62. Cable at 1.1960. NZD is looking weak.

Today:

 

Biggest FX Mover @ (06:30 GMT) US100 (+3.10%). Spiked to 12,356. Next resistance 12,600 & 12,945. MAs aligned, turning lower in 1-hour chart, MACD histogram & signal line hold higher, RSI 66 but falling.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Eurozone economy heads for paralysis

Record high energy prices, the threat of recession in Germany and squabbling in Italy's government has left the eurozone fighting fires on all fronts.

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The ten highest dividend yields in the FTSE 250

The average FTSE 250 dividend yield is around 2.4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investors to buy.

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MICRO E-MINI NASDAQ FUTURES (MNQ1!), H4 Potential For Bullish Rise

Type: Bullish RiseKey Levels:Resistance: 12943.25Pivot: 12232.25Support: 11790.25Preferred Case:On the H4, with price moving in an ascending trendline and moving above the ichimoku cloud, we have a bullish bias that price will rise from the pivot at 12232.25 at the pullback resistance in line with the 78.6% fibonacci retracement to the 1st resistance at 12943.25 at the swing high in line with 38.2% fibonacci retracement.Alternative Scenario:Alternatively, price may break the resistance at the pivot and drop to the 1st support at 11790.25 at the pullback support.Fundamentals:No Major News

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MICRO E-MINI S&P500 INDEX FUTURES (MES1!), H4 Potential For Bearish Drop

Type: Bearish MomentumKey Levels:Resistance: 4083.25Pivot: 3945.00Support: 3905.25Preferred Case:On the H4, with price recently breaking the descending trend channel, we have a bullish bias that price will rise from the pivot at 3945.00 at the pullback swing high in line with the 78.6% fibonacci projection and 50% fibonacci retracement to the 1st resistance at 4083.25 at the pullback swing low in line with the 78.6% fibonacci retracement.Alternative Scenario:Alternatively, price may break the support structure at the pivot and drop to the 1st support at 3905.25 at the overlap support.Fundamentals:US indexes moved moderately higher with better-than-expected US economic reports. Hence, we have a bullish view on the micro e-mini S&P500 index.

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UK inflation has hit yet another 40-year high

UK inflation is running at 9.4% – its highest for 40 years. John Stepek explains why rampant inflation can be so damaging for business, for the economy and for your finances – and what you can do to help yourself through it.

from Moneyweek RSS Feed https://moneyweek.com/economy/inflation/605134/uk-inflation-has-hit-yet-another-40-year-high
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Investment Bank Outlook 20-07-2022

Credit AgricoleAssessing the short-term EUR/USD risksThe near-term outlook for EUR/USD tends to be dominated by the EUR-USD short-term rate spread, the peripheral yield spread to Bunds as well as the EUR/USD box yield spread and the performance of the Eurozone stock market relative to the US. We therefore assess the magnitude of the potential EUR/USD downside risks in the short term, related to the brewing energy crisis in Europe, using our FAST FX fair value model.Assumptions: We make the following assumptions about the EUR-USD short-term rate spread, peripheral yield spread to Bunds and other FX drivers:1. EUR-USD rate spread We assume that the ECB tightening cycle would be cut short by the brewing energy crisis and a potential Eurozone recession so that the Eurozone policy rates peak at around 1% or more than 50bp below the current market rate expectations. At the same time, we assume that the Fed would be able to deliver a total of 3.75% of policy rate hikes. In terms of the FAST FX model, we assume that 2Y EUR-USD rate spread would revisit its previous lows of around -2.8% to -3.0% 2. Peripheral yield spread to Bunds We assume that the combination of persistent Italian political risks and Eurozone growth fears could fuel further widening of the peripheral yield spreads to Bunds. In that, we think that the ECB anti-fragmentation may not work as well to contain the sell-off (at least initially). Moreover, it stands to reason that a second NGEU package may be needed to see calm returning to the Eurozone periphery. In terms of the FAST FX model, we assume that 10Y peripheral yield spread to Bunds can revisit its previous highs of c.3%. 3. Box yield spread between EU and US stock-marketsWe assume that the EUR-USD box yield spread and the ratio between the Eurozone and the US stock markets will deteriorate from their current levels. In particular, we assume that they will meet levels last reached before the pre-pandemic period. It should be mentioned that these variables have tended to be less significant drivers of EUR/USD historically so that the impact on our estimates has been somewhat less significant.The results from the simulation based on the above assumption suggest that the EUR/USD fair value can drop to 0.96 if the energy crisis in Europe cuts short the ECB’s tightening cycle from here while triggering a renewed turmoil in the Eurozone periphery, however. Should the ECB tightening cycle come to an end even earlier or if the sell-off in the periphery intensifies beyond our expectations, EUR/USD could experience even greater downside risks.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investment-bank-outlook-20-07-2022"
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USDJPY, H4 | Potential Bullish Continuation

Type: Bullish BounceKey Levels:Resistance: 139.417Pivot: 137.751Support: 136.695Preferred Case:On the H4, with price moving above the ichimoku indicator and along the ascending trendline, we have a bullish bias that price will rise to our 1st resistance at 139.417 where the 61.8% fibonacci projection and swing high resistance are from our pivot at 137.751 in line with pullback support.Alternative Scenario:Alternatively, prices could break pivot structure and drop to 1st support at 136.695 where the overlap support and 38.2% fibonacci retracement are.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/usdjpy-h4-or-potential-bullish-continuation20"
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SI1!, H4 | Potential Bearish Continuation

Type: Bearish ReversalKey Levels:Resistance: 19.431Pivot: 18.797Support: 18.026Preferred Case:On the H4, with price moving below the ichimoku cloud and moving in a descending trend channel, we have a bearish bias that price will continue to drop from the pivot at 18.797 in line with the 61.8% fibonacci projection to the 1st support at 18.026 at the swing low.Alternative Scenario:Alternatively, price may reverse off the pivot and rise to the 1st resistance at 19.431 at the overlap resistance in line with the 38.2% fibonacci retracement.

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Daily Market Outlook, July 20, 2022

Daily Market Outlook, July 20, 2022 Overnight Headlines Dollar Loses Steam, Euro Heaves Sigh Of Relief Ahead Of ECB Asian Equity Markets Broadly Higher; US Futures Also Gain Netflix Rallies 8% After Hours After Losing Fewer Subscribers Biden To Announce Climate Actions, Not Yet Declare Emergency Biden Approval Rating Falls To 36%, Matching The Record Low Italy Faces Parliamentary Showdown On Government Survival Truss Eyes Leadership Runoff With Sunak As Tories Vote Again Bracing For Russian Gas Cuts, EU Readies Plan To Cut Demand Putin: Ukraine Did Not Make Good On Preliminary Peace Deal China Leaves Loan Prime Rate Lending Benchmarks Unchanged Chinese Covid-19 Cases Near 1,000 In A Test Of Zero-Tolerance RBA Governor: Need To Chart ‘Credible Path’ To 2-3% Inflation Oil Prices Fall On Inflation Concerns, Anticipated Stock BuildsThe Day Ahead Market risk tone brightened during the Asian trading session. It followed positive closes in Europe and the US yesterday. However, it remains to be seen whether the latest equity market rally continues, as markets assess how quickly and how far interest rates will rise, and whether the impact on economic growth is appropriately reflected in asset prices. Meanwhile, media reports suggest Russian energy supplies to Europe via Nord Stream will restart, albeit at reduced capacity. UK headline CPI inflation, released earlier this morning, increased for a ninth consecutive month, to a new 40-year high of 9.4% in June, lifted by higher food and petrol prices. The outturn was above a forecast rise to 9.3% from 9.1% in May. The core measure (excluding food and energy) fell for a second month, to 5.8% from 5.9%, albeit a marginally smaller decline than forecast, and it remains at an elevated level. The data will maintain pressure on the Bank of England to continue to raise interest rates, with the next policy update due in early August. Yesterday, Governor Bailey said that a 50bp hike is ‘on the table’ but ‘not locked in’. In contrast to other major central banks, the Bank of Japan is expected to keep policy unchanged. It will announce its policy decision early tomorrow. The ECB policy update on Thursday is the key focus for markets, with reports suggesting that the Governing Council is considering a 50bp rise. The consensus is that it will raise rates by 25bp, the first increase since 2011, and possibly by 50bp in the following meeting in September. Today’s Eurozone data are likely to receive limited attention, but they include the current account and consumer confidence. The current account balance last month swung into deficit for the first time in over a decade, while we anticipate a new low in consumer confidence – both related to the issue of energy security. Canadian CPI inflation data and US existing home sales are due this afternoon. Headline annual CPI is expected to rise to 8.4%, while existing home sales may have fallen for a fifth straight month. In UK politics, the final round of the Conservative leadership contest takes place today, with the final two candidates selected by the party’s MPs. The two will then go forward for a vote among the wider party membership and a new PM is expected in early September. In Italy, PM Draghi will decide whether to stay in his post ahead of a scheduled confidence vote this evening.FX Options Expiring 10am New York Cut EUR/USD: 1.0000 (960M), 1.0100 (1.55B) USD/JPY: 137.00 (625M), 137.75 (835M), 139.00 (1.05B), 140.00 (705M) GBP/USD: 1.1980 (449M) USD/CAD: 1.2800-05 (550M), 1.2990-95 (499M), 1.3285-90 (980M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.0350 Move higher Tuesday due to risk-on mood and hawkish turn in ECB expectations Risk for EUR/USD would be if ECB 'only' hikes 25 BPs when they meet Thursday Resistance 1.0250/60, support 1.0100-05, 1.0070-75 Price testing the 20 Day Bearish VWAP 20 Day VWAP is bearish, 5 Day bearishGBPUSD Bias: Bearish below 1.2150 UK June CPI above forecast, new 40yr highs at +9.4% YY New 40-year high for UK inflation adds weight to a potential 50bps move by the BoE BoE's Bailey commented Tuesday that 50 bps hike on the table for Aug 4 meeting Sunak, Mordaunt and Truss head into key leadership vote Weds Offers sited at 1.2050 bids 1.1890 20 Day VWAP is bearish, 5 Day bearishUSDJPY Bias: Bullish above 134 USD/JPY rotating in quite Asian session bid above 138 Higher US yields and better risk tone add support Exporter offers 138.50 Importer bids 137.50 Size option expiries 139.00 $1.1 bln roll off today JPY crosses bid with shift in central bank expectations 20 Day VWAP is bullish, 5 Day bullishAUDUSD Bias: Bearish below .7050 AUD/USD rallies in unison with equity risk on tone U.S. futures bid Netflix shares up over 8% in post market. RBA Governor Lowe hints at continued rate rises Market starting to price a 75bps August RBA hike June quarter CPI eyed next week market sees a 6%+ print Price testing pivotal .6940/50 resistance through here opens .70 test 20 Day VWAP is bullish, 5 Day bullishBTCUSD Bias: Bullish above 22k Crypto stocks bid as bitcoin rises to test towards 23,800 Bitcoin trading at best levels for over a month bid with Nasdaq. Crypto miners leap: Hut 8 Mining , Marathon Digital , Riot Blockchain , Core Scientific rise between 13% and 25.7% Blockchain farm operator Bitfarms Ltd jumps 14.3%, BTC buyer MicroStrategy gains 18.6% Crypto exchange Coinbase Global up 11.8% Bulls eye a 25k test next, support sited back at 22k 20 Day VWAP is bullish, 5 Day bullish

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