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US earnings season in full swing

Five markets in focus today: Apple, AUD/CAD, GBP/USD, USD/IDR and 10-Year T-Note Decimalised.

NYSE
Source: Bloomberg

Apple

It’s a big night of earnings in the US with Verizon, Travellers, McDonalds, Microsoft and Apple due to report. Microsoft and Apple will report after the closing bell, but you can still trade the stock with IG. The analysts’ consensus expects to see Q3 EPS of $1.23, on revenue of $37.95 billion. Margins are expected at 37.9%, with the market expecting to see a slight decline in Q4 margin guidance to 37.5%. The tech giant is up 18% year-to-date and it’s interesting to note that Apple’s shares have fallen in six of the last eight quarterly reports. It could be a fairly soft quarter with traders focusing on narrative around the IPhone 6 launch.

AUD/CAD

I continue to hold a bearish bias on this pair after looking at potential short ideas on July 7. The pair has found good supply of late around the 1.01 area and with both RSIs and stochastics looking to turn lower, I continue to hold a short bias. A move through the 200-day moving average at 0.9947 would be positive for my potential trade idea. It is a fairly slow moving trade so patience seems warranted. Glenn Stevens will be speaking at 1pm and recall earlier in the month he gave a fairly dovish speech in which he talked down the AUD, so this may feasible play out again today. I am looking for dips as a buying opportunity in AUD/NZD as ‘one to watch’ this week.

GBP/USD

It could be an interesting week for sterling with Q2 GDP (later in the week) expected to highlight why traders have been so bullish on sterling of late. At 22:30 AEST tonight though we get UK public sector net borrowing, with economists expecting to see an 18% decline in net borrowing. Cable is consolidating between 1.7200 and 1.7050, however key support is found at 1.7001 (the figure and 38.2% retracement of the 1.6692 to 1.7192 rally), where a break could see the pair head to 1.6883.

USD/IDR

We should hear the result from the Indonesian election today and the market looks to have priced in a Jokowi victory. The winning margin has been speculated at over 6%; however there may be concerns that the Prabowo camp may dispute the election, in which case sellers of the Indonesian Rupiah may emerge.

10-Year T-Note Decimalised (US 10-year treasury)

Bond traders and currency traders will be interested to watch out for US inflation at 10:30pm AEST. Both the headline and core inflation numbers are expected to be unchanged from the pace we saw last month, however an upside surprise could see good selling of bonds and buying of USDs.

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