FYI | Jun 30 2006
By Rudi Filapek-Vandyck
Watch out for oil and copper, technical strategists at Barclays Capital report. According to their historical analysis, West Texan Intermediate (WTI) spot oil tends to perform well in July, but it is copper that usually outperforms the rest this time of the year.
WTI crude has now recorded positive returns in July for five years in row, Barclays reports. This could bode well for 2006 too. In general, July tends to be a good month for commodities, historical analysis shows, but it is copper that tends to perform best during the month.
Barclays notes July is often the metal’s best month of the year.
If history repeats its usual seasonal pattern this year, aluminium is the commodity to avoid.
In terms of equities, Hong Kong’s Hang Seng has history on its side in July, with Australian equities coming second. The Nasdaq usually performs negatively. Prospects for the Dow Jones looks very positive, while European bourses should also show a positive trend, and Japan looks shaky.
Barclays notes equities in general have a positive month in July with the exception of Nasdaq, with the Pacific rim (ex-Japan) showing particularly impressive results.
Looking at the currency markets, Barclays points out there appears to be a clear bearish trend for the SEK (Swedish Krona) while the Aussie dollar and Kiwi dollar usually don’t perform very well either in July. Barclays also believes CHF (Swiss Franc) and JPY are on a long bearish run against the US dollar.
Best cross to play this month tends to be NOK/SEK (Norway versus Sweden) and the worst performer tends to be NZD/USD.