Although typically a slow month, most retail brokers experienced higher volume accompanied by strong trading revenue for the month of July.
USD weakness against AUD and EUR and the pairs' respective bullish breakouts were the main contributors to the positive month as retail traders maintained short positions through the bulk of the moves. Exposures began tapering off toward the last week of the month as positions were unwound from the extended rallies.
*Average Daily Volume represents the daily volume from ISRA customers for each day of July divided by the average daily volume for July of these customers. Each day is represented as a percent of the average. July 31 was the highest volume day at 145% of average.
The daily B Book trading revenue for retail brokers was considerably higher in July, the average day coming in at a 69% increase over June. While volatility in metals was fairly consistent, ranges held and profitability for brokers in these products were reliant on the margining of their traders.
**Average Daily B Book PnL represents the daily B Book PnL from ISRA customers for each day of July divided by the average daily B Book PnL for July of these customers. Each day is represented as a percent of the average. July 27th was the biggest PnL day at 239% of average. July 9th was the worst B Book PnL day where losses were -84% of the average.
ASIA
- Political threats pose increasing risk to the region. North Korea is the primary concern, with the threat of war an increasing probability.
- BOJ Governor Kuroda has vowed to keep government bond yields near zero. Moderate expansion is projected for the Japanese economy.
- China posted stronger than expected economic growth with 6.9% 2Q GDP growth. Overall sentiment on China is warming on improving output.
EUROPE
- Sentiment swung to a multiyear high, highlighting improving consumer outlook and a more stable political environment
- The ECB's goal of unwinding the accommodative monetary policy in place since the financial crisis faces challenges. ECB President Draghi staed inflation was not firm enough to warrant a tighter monetary policy.
- EURUSD finished July above 1.18, a level not seen since Jan of 2015
AMERICAS
- Language from the Fed is being viewed as increasingly dovish, making references to inflation numbers below 2% in the US economy.
- Less than ideal inflation numbers have raised concern surrounding the reduction of the fed’s $4.5 trillion balance sheet. The time table has been vague, with the Fed stating reduction will begin “relatively soon.”
- The bank of Canada raised its prime rates to .75%, marking a swing into hawkish territory. The move reflects favorable growth in the energy and services sectors.