A review of trends in each of the major asset class sectors shows that there should be a strong return opportunities in July. Global stock indices are declining on trade war rhetoric and action. This growing sense of risk has spilled-over to bond markets through classic risk-on/risk-off behavior. Bonds have gained even with the threat of higher inflation. The dollar looks to continue its up trend as money flows back to the US and away from EM. Precious metal prices have fallen on the dollar strength. In spite of the Saudi’s willing to increase oil production in response to falling inventory, oil prices have continued to trend higher. Grain prices have fallen on fears of a trade war in agricultural exports to China. The general direction in commodity prices has been lower.
Given the trends that existed at the end of June, there looks to be strong opportunities for those global macro traders that follow momentum and trend-based signals.