RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

“You still see solid growth, but there’s growing signs of a slowdown, and it’s a bit concerning” – Fed Chairman Jerome Powell

Did we just hear the beginning groundwork being laid for a less “hawkish” FOMC? Perhaps, and we’re not surprised. This is a globally synchronized slowdown that we’re experiencing. China has been slowing since January (shanghai index -24% since it’s Jan peak), the Eurozone has also seen a sequential slowdown throughout the continent’s economy, led by Germany -13.5%, Italy -12.5% ytd, and Greece -8.75%. The USD is not taking the Powell’s comments lightly this morning, -60pts to 96.28 on the December contract. Furthermore, rumors that trade talks are loosening up between the U.S. and China are also feeding into a lower USD vs other major world currencies this morning. I do believe, and this is a call we’ve been making for a while now, that this is the beginning of the end of the USD rally. It’s a bold call because “the trend is your friend”, but with the U.S. (in my opinion) on the brink of a slowdown in growth and inflation, and the Fed past peak in its rate hike cycle, we believe the best day’s for the USD are now behind us. We’re going to stay bearish on the USD for the next 3-6 months with a downside target of 93.00. We’ll continue to monitor and evaluate this call on weekly basis. 

U.S. Dollar Index Weekly Chart

U.S. Dollar Index Weekly Chart

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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. John made his move to the commodity industry at the end of 2005, and began his path at Lind Waldock, at the time the largest retail brokerage division worldwide. John did his undergraduate work at Robert Morris University in Pennsylvania from 1999-2003, where he was a 4 year varsity basketball letterman.  A self-professed “Macro Trader”, John uses a multi-factor fundamental and “quantamental” trading model in distinguishing market cycles based upon the accelerations or decelerations of growth and inflation metrics. His technical and quantitative approach is heavily reliant upon trend and market range analysis via a custom built standard deviation system in helping him make probability-based market decisions. John is an avid reader of all things pertaining to finance, and behavioral economics. Click here to sign-up for John Caruso's Trading Coach Insights. Daily information and insight on all futures marketsin ranging from metals to equities.
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