1

August 3, 2017

www.tgmacro.com

Volume: 1 Issue: 172

132

Cable Guy

“I can be your best friend or your worst enemy. You seem to prefer the latter.”

– Chip Douglas, Cable Guy

Bank of England Governor Mark Carney had us expecting a rate hike in the U.K. and left FX

traders a bit disappointed. Aside from this morning’s July services PMI rising to 53.8 vs. 53.6

estimates, the upticks in their economic data have come to a grinding halt since Brexit, which as we know isn’t going

exactly according to Theresa May’s plan. The FT recently cited research by consultant Oliver Wyman (no relation to the

Stones bass player) that said the Brexit will push up bank costs by 4% and their capital requirements could rise by 30%.

Inflation is creeping higher than wage growth creating a headwind for consumer spending. It’s not a perfect departure

from the EU, but it’s happening.

This morning the BOE left rates unchanged at .25%. They lowered growth estimates to 1.7% (from 1.9%) for 2017 and to

1.6% (from 1.7%) in 2018. They still think the growth will be enough to generate inflation pressures and close the UK

output gap in 3 years.

This weak White House/weak U.S. dollar scenario has obviously

driven the cable rally, which peaked at an 11-month high of

£1.3267 this morning. We’re seeing simple “sell the fact” selling

in cable against post rate decision. Nothing has changed about

the trajectory of this rally and I would be comfortable adding on

dips to the ascending trend line we’ve been tracing higher since

June. When I step back from the cable chart I see a sturdy head

and shoulders bottom and an uptrend off it that is well intact.

You know what Chip Douglas says – “Free cable is the ultimate

aphrodisiac.”

The euro continues to reprice in a significant fashion on those

economic growth prints I’ve been highlighting. In my opinion, it’s

headed back to the €1.2000 range against the Swiss Franc (chart

right) which is exactly what the SNB is looking for. A weaker

franc and a rally in their credit markets would give them a chance

to reduce their massive balance sheet, which, if you recall,

includes an $80B fund of U.S. stocks.

Euro yen (chart page 2) extended through heavy Fibonacci

resistance around €130.00 that I laid out and keeps grinding

2

August 3, 2017

www.tgmacro.com

Volume: 1 Issue: 172

132

through upside stop losses. The euro continues to march toward

€1.2000 versus the dollar as Jackson Hole approaches so we’ll see

if the round number offers resistance ahead of what could be a

game changing confederacy of dunces in Wyoming.

Speaking of dunces, President Trump signed sanctions against

Russia and I don’t like the way that escalates the global intensity

meter. These sanctions legitimize the ridiculous witch hunt for

Russia collusion in the election when it’s obvious that whole story

is being pushed around to suck the air out of the Pakistani IT

gentleman that worked for the DNC’s Debbie Wasserman Shultz

caught trying to leave the country with $12 dimes on him after collecting numerous paychecks and pieces of data from

the U.S. Gov. Imran Awan has been charged with *world’s biggest air quotes* “bank fraud,” but as we know, there’s

more than just bank fraud going on at the DNC and my guess is President Trump actually does get to the bottom of that

one.

The sanctions with Russia on top of the extending missile tests out of North Korea have my radar up for spikes in

commodities and Treasuries. Commodities have been trading tick for tick with it in the last few weeks. As you know I

don’t take my eye of WTI when I’m in the XLE. Yesterday EIA reported a drop of -1.5M barrels versus -3M consensus.

DEC/DEC tightened to .23c contango. Oil is ticking toward $50 again.

Gasoline inventories fell -2.5M barrels versus -.6M consensus and having led the complex early, pulled back 1% on that

news. I’m not concerned because gasoline demand printed the first positive year-on-year reading since January.

Everything’s beautiful for energy bulls this morning.

In one final piece of bullish energy bullish news, world trade is

ticking higher which boosts diesel demand for high-power engines

that ship freight. World trade volumes were up by 5% in 3 months

to May compared to a year earlier according to the Netherlands

Bureau for Economic Policy Analysis.

Don’t you love it when economic data matches price action? Me

too.

3

August 3, 2017

www.tgmacro.com

Volume: 1 Issue: 172

132

“To work is to feel alive.”

– Tony Bennett, born August 3, 1926

“I’m married to Metallica.”

- James Hetfield

“You wanna know which ring is my favorite? The next one.”

Tom Brady, born August 3, 1977

So close, no matter how far

Couldn’t be much more from the heart

Forever trusting who we are

And nothing else matters.

- Metallica

On August 3, 1986 Def Leppard released Hysteria which sold 20 million copies worldwide. The album was named by

Rick Allen to relate his experiences from the car accident that took most of his left arm and it remains one of my favorite

works out of the 80’s. Check it out. It’s Animal.

“I love the ocean, and I love the Bay Area, I love what it's got to offer, but there's just an attitude that it was... It

wasn't healthy for me." – James Hetfield, Metallica, born August 3, 1963

“A lot of times I find that people who are blessed with the most talent don’t ever develop that attitude, and the ones

who aren’t blessed in that way are the most competitive and have the biggest heart.” - Tom Brady, winner

“I’m so old I remember when credit spreads used to widen.”

@thecdstrader

“I’m so old I remember when the commodity pits were filled with the

greatest characters on earth.” - TG Macro.

“I’ll never retire.”

- Tony Bennet, Tony Greer

4

August 3, 2017

www.tgmacro.com

Volume: 1 Issue: 172

132

POSITION MONITOR:

• The Position Monitor accounts for technically driven trade ideas in percentage returns, logarithmic returns, and then generates a portfolio return

• Each position is 10% of the portfolio

• The portfolio will be limited to a maximum of 10 positions at a time

• Profit and Loss (PnL) is calculated as % return, then log return, then as a portfolio return

• LONG positions are in black, SHORT positions are in RED

• Trailing stop losses that have been moved closer to market are in BLUE

• Position initiations are discussed in the Morning Navigator prior to date of entry

• The most recent 10 trades are grayed out at the bottom of the spreadsheet and markets “CLOSED”

• Time frames are approximations

5

August 3, 2017

www.tgmacro.com

Volume: 1 Issue: 172

132

TG Macro, LLC ("TGM") is a publisher, not a registered investment advisor, and nothing in TGM's newsletter is intended, and it should not be construed, to be investment advice. TGM's newsletter is for informational use only. Any mention in TGM's newsletter of a particular security, index, derivative, or other instrument is neither a recommendation by TGM to buy, sell, or hold that security, index, derivative, or other instrument, nor does it constitute an opinion of TGM (or of any of its officers, employees, agents or representatives) as to the suitability of that security, index, derivative or other instrument for any particular purpose. TGM is not in the business of giving investment advice or advice regarding the suitability for any purpose of any security, index, derivative, other instrument or trading strategy and nothing in TGM's newsletter should be so used or relied upon. TGM is not acting as your financial advisor nor in a fiduciary capacity, with regard to any securities, index, derivative or other instrument referred to in TGM’s newsletter. Also no representation is made concerning the tax implications in any applicable jurisdiction regarding any securities, index, derivative or other instrument and TGM is not advising you in respect of the tax implications. All opinions and estimates in the newsletters are given as of the date of their publication on the TGM’s website and are subject to change and TGM does not assume any obligation to update the newsletters or to reference any such changes.TGM hereby expressly disclaims any and all representations and warranties that: (a) the content of its newsletters is correct, accurate, complete, reliable or a guaranty of future performance; (b) any of its newsletters will be available at any particular time or place, or in any particular medium; and (c) that any omission or error in any of its newsletters will be corrected. TGM shall not be liable for any errors or omissions made in its newsletters or for any inaccuracies in its assumptions. TGM specifically disclaims liability for any losses or damages (incidental, consequential or otherwise) that may arise from the newsletters and that are either used or relied upon by anyone for any reason, including without limitation, the use of the newsletters in the preparation of any financial books and records. Although from time to time TGM's newsletter may link to or promote others' websites or services, TGM is not responsible for and does not control those websites or services. TGM's newsletter is published and distributed in accordance with applicable United States and foreign copyright and other laws. Without the prior written consent of TGM, no person or entity, directly or indirectly, may copy, reproduce, recompile, decompile, disassemble, reverse engineer, distribute, publish, display, perform, modify, upload to create derivative works from, transmit, or in any way exploit all or any part of TGM's website, its newsletter, or any other material belonging to TGM. Without the prior written consent of TGM, no person or entity, directly or indirectly, may offer all or any part of TGM's website, its newsletter, or any other material belonging to TGM for sale, nor may any person or entity, directly or indirectly, distribute all or any part of TGM's website, its newsletter, or any other material belonging to TGM over or by means of any medium. Without the prior written consent of TGM, no person or entity, directly or indirectly, may make all or any part of TGM's website, its newsletter, or any other material belonging to TGM, available as part of or in connection with another website, whether by hyper-link, framing on the Internet or otherwise. At any given time TGM's principals may or may not have a financial interest in any or all of the securities and instruments discussed herein. At any given time TGM's principals may or may not have a financial interest in any or all of the securities and instruments discussed herein.