SECURITY: Trump Hints At Increased Military Support For Ukraine 1/2
Aug-21 14:05
US President Donald Trump has issued a statement on Truth Social, appearing to suggest that former US President Joe Biden hindered the Ukrainian war effort by restricting Kyiv’s ability to strike targets within the Russian Federation.
- Trump: “It is very hard, if not impossible, to win a war without attacking an invaders country. It’s like a great team in sports that has a fantastic defense, but is not allowed to play offensive. There is no chance of winning! It is like that with Ukraine and Russia. Crooked and grossly incompetent Joe Biden would not let Ukraine FIGHT BACK, only DEFEND defend. How did that work out? ... Interesting times ahead!!!”
- Trump’s statement comes as optimism ebbs that Trump’s twin summits in Alaska and the White House will deliver substantial progress towards a Ukraine peace agreement. Trump's Truth Social message could be interpreted as a warning to Russian President Vladimir Putin that failure to agree to a bilateral summit with Ukrainian President Volodymyr Zelenskyy will result in Washington winding down remaining restrictions on US-supplied weapons to Ukraine.
- Since the White House summit, Russian Foreign Minister Sergei Lavrov has made a series of statements suggesting the Kremlin will slow-walk a Zelenskyy summit, and continue to back a maximalist proposal to end the war that is incompatible with Ukrainian and European priorities. See earlier bullet: RUSSIA: Lavrov Continues Claims That Ukraine Is Holding Up Peace Process
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FOREX: USDJPY Gravitates Lower Post Election, Trade Deal Optimism Noted
Jul-22 14:00
- A partial recovery overnight for USDJPY was swiftly shrugged off and the pair has resumed a steady downtrend since the European open on Tuesday. Price action echoes that seen on Monday in the aftermath of the upper house election in Japan, as PM Iishiba affirmed he would remain in office despite his party losing its majority.
- The extension lower for core yields has assisted this dynamic of yen outperformance, as both the trans-Atlantic tariff tiff and Bessent’s more optimistic tone for Powell’s future provide a supportive tone for treasuries. Furthermore, Bessent’s mention of Japan talks going “very well” and that the election may be the impetus to getting a deal done will have also provided tailwinds for the yen. His comments follow Japan’s chief trade negotiator meeting with the US Commerce Secretary on Monday ahead of the looming August 01 deadline.
- USDJPY has traded through initial support at 146.92 (Jul 16 low), printing session lows of 146.51 at typing. Short-term pivot support to monitor next is 145.85, the 50-day EMA.
- Some analysts had cited the substantial rally in USDJPY as overshooting the shift in fundamentals, and the subsequent cleaner positioning could be exacerbating this week’s swift reversal lower. Below the 50-day EMA, attention will be on 144.23, the July 7 low.
EQUITIES: Stocks Drop on Little News; Currency, Bond Markets More Resilient
Jul-22 13:58
- Equities have reversed hard since the cash equity open, with the e-mini S&P sliding to a new daily low on heavy volumes - no headlines here of note to drive the move, and the move looks generally equity-led, with bond and currency markets generally holding firm. Volumes really picked up on the break of overnight lows - helping trigger the ~15 point drop that's already started to partially reverse.
USDJPY TECHS: Correction Extends
Jul-22 13:55
- RES 4: 151.21 High Mar 28
- RES 3: 150.49 High Apr 2
- RES 2: 149.38 50.0% retracement of the Jan 10 - Apr 22 bear leg
- RES 1: 149.18 High Jul 16
- PRICE: 146.51 @ 14:54 BST Jul 22
- SUP 1: 146.63/60 20-day EMA / intraday low
- SUP 2: 145.85 50-day EMA
- SUP 3: 144.23 Low Jul 7
- SUP 4: 142.68 Low Jul 1 and a key support
A bull cycle in USDJPY remains in place despite the latest pullback - a correction. Recent strength has resulted in a breach of resistance at 148.03, the Jun 23 high, and a move through key resistance at 148.65, the May 12 high. The break strengthens the bullish theme and opens 149.38, a Fibonacci retracement. On the downside, short-term pivot support to monitor is 145.85, the 50-day EMA.
