Daily Market Color 06/24/2015

Daily Market Color
06/24/2015

Economic Reports & Headlines
First Quarter GDP in France came in line with estimates on a quarter over quarter basis, 60bps. Year over year growth was slightly higher than expected, 80bps vs. exp. 70bps.

Over in Germany we got a read on business expectations from the Ifo survey. Business expectations missed (102.0 vs exp. 102.5), current conditions missed (113.1 vs. exp. 114.1) and economic sentiment missed (107.4 vs. exp. 108.1)

On the domestic front, US first quarter GDP was revised lower to show a contraction of 20bps

Greece is still the main headline today with the IMF submitting a counter-proposal to Greece which demands Value Added Taxes and pension cuts. Greek officials shot the proposal down.


Trades
I have been experiencing a stretch of losing trades due to my impatience to wait for Greece to default or receive a bailout. June 30 is the current deadline for a deal to be made, but another loop hole could further delay the “deadline.” The first deadline was delayed because Greece used the IMF money to service an IMF debt. The deadline following that one was delayed because Greece exercised a right to bundle multiple payments into one lump sum payment. And now they are reports circulating that states that the IMF has 30 days to delay the default after Greece misses the payment. I might just start looking for another trade.

I lost on the British Pound trade because I thought market players were betting on monetary policy tighten from the Bank of England, however, this was not expected in the immediate future. As a result, I gave back all of my paper profits from the British Elections trade. I learned from that trade that I should not give back profits.

I placed a short bet on Corn and took a small lost when it hit my stop. I expected Corn to decline from a technical stand point of view. I took a small lost in the US 10 year note. May jobs numbers came in stronger than expected, so treasuries declined as a result. I went short with the expectation of tighten commentary from the Fed at their next meeting. Janet Yellen press conference made it seem as if she were reluctant to raise rates by downplaying the strong jobs report and placing emphasis on “other” economic indicators that needed to show improvement.

Right now I am waiting until June 30th to profit from the Greek deadline. I am also paying attention to the New Zealand dollar which declined substantially after their central bank cut rates by 25 basis points unexpectedly.