US earnings in focus

Five markets in focus today: Google, IBM, EUR/GBP, AUD/NZD and GBP/JPY.

Source: Bloomberg


Google report in tonight’s post-market session and traders are expecting to see Q2 EPS of $6.26 on revenue to $12.33 billion. Q2 paid clicks are expected to be up 25% year-on-year. Look for commentary on YouTube to be a key driver within the ‘Owned and Operated’ segment. Despite Google being such a quality business they have missed EPS expectations in five of the last eight quarters.


Like Google IBM report after market. This puts the Dow futures (quoted Wall Street on Puredeal) in focus given IBM have a 7.6% weight on the index, just shy of Visa. The market expects earnings of $4.31 on revenue of $24.1 billion. IBM has met or beaten EPS in seven of the last eight quarters.oI


EUR continues to attract sellers, with the falls most pronounced against the pound, with trend followers heavily focused on this pair. UK employment (released overnight) was strong, but the moves in the pound could have been even more aggressive had we seen stronger signs of wage growth. While it is some distance off, traders will be eyeing a deeper move to the 2012 low of 0.7761. Selling rallies seems the way to go for me, with 0.7925 a level I’ll be watching for a levels sellers will be keen to re-initiate shorts. At 7pm tonight we get European CPI, however this is a revision of a prior estimate and not expected to change for 0.5%.


NAB business confidence is on the docket today at 11:30am, so this could provide further upside for my trade idea from July 10. I looked at long AUD/NZD trades from 1.0669 on July 10 and continue to look for a move to 1.0800.


I suggested long positions on this pair on June 20 at 173.55, however indecision has crept into the daily chart and fundamentally while sterling is attractive the markets have priced in a lot of good news. With spot now trading at 174.24 I feel taking profits seems prudent.

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