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AMT Top Ten Miscellaneous Fragments for the 24th of May 2024

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Fragments for the 24th of May 2024

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10. IP vs. AI: OpenAI has agreed to pay News Corp., the mass media company, for the rights to ‘farm’ data and written content from publications like the Wall Street Journal and other notable brands. OpenAI will compensate the media giant around 250 million USD over the next five years. Question, does this legally imply that all Artificial Intelligence companies will eventually have to pay for ‘scraping’ Intellectual Property from all resources they take information?

9. Memorial Day: The U.S will observe its commemoration for fallen soldiers this coming Monday. The long holiday weekend will affect financial markets later today with lighter than normal trading, and volumes will be very thin in Forex and many commodities early next week.

8. India: The 6th phase of India’s national election will be held tomorrow. The 7th and final polling date is the 1st of June. There are murmurs that Prime Minister Narendra Modi’s Bharatiya Janata Party is losing some ground and will not be able to attain a super majority in the Lok Sabha.

7. Moment of Lunacy: The United Nations observed a moment of silence for Iran’s deceased President and Foreign Minister who died earlier this week in a helicopter crash, while failing to mention the majority of citizens in Iran who live unwillingly under the Iranian Islamic Republic’s oppression.

6. 29th of May: The South Africa election will be held next Wednesday. After governing the nation since 1994, the African National Congress appears to have a fight on its hands to sustain power without having to use a coalition. Dangers abound regarding potential political alliances which might have to be formed. The USD/ZAR will certainly endure volatility in the days ahead, and geopolitical influences should be monitored in the weeks to come. Can a tranquil compromise be attained?

5. FOMC Meeting Minutes: Wednesday’s publication of the Federal Reserve’s decision making process rumpled some feathers in financial institutions regarding the central bank’s laser focus on inflation. However, traders should not have been surprised. While the outlook for the Federal Funds Rate has seemingly shifted within financial institutions to hopes of a more dovish policy, equity indices and Forex will continue to amplify a battle between short and mid-term speculative and investment positions that gyrate on power generated from fundamental economic reports and technical perspectives.

4. Gold: The precious metal is near 2,340.00 USD as of this writing, this after attaining an all-time record value around $2,450.00 per ounce this past Monday. Risk appetite is certainly high in the financial markets. Day traders need to understand large speculative forces can move commodities and other assets with lightning speed when big volumes and changes to behavioral sentiment collide.

3. Data and the G7: Today’s Consumer Sentiment and Inflation Expectations readings should be watched from the University of Michigan. Weaker than anticipated results could solidify a bearish trend for the USD. However, traders should also keep in mind the G7 meetings taking place as they monitor global events, they should also remember to eliminate the hyperbole that may come from some politicians today and tomorrow in Italy as pronouncements come from the conference.

2. U.S Debt Burden: As the U.S election draws closer, investors are likely to hear more about the growing U.S debt which is certainly increasing too rapidly. 34 trillion USD in public debt is owed by the U.S government. It is a monumental number and growing larger on a daily basis. The U.S must start to get its fiscal house in order. The ratio of 124.7% of U.S debt to Gross Domestic Product is eye catching, it is still less than many major countries but still troubling. Japan’s ratio is about 263%. However, the U.K’s ratio is less and standing at 85.4%.

1. Devaluation: USD/JPY as of this writing is hovering near 157.000. There has been talk among financial institutions regarding the belief that China is quietly devaluing the USD/CNY to gain an advantage in export ability. But little mention has been made of Japan’s devaluation of the Japanese Yen to accomplish the same goal. The USD/JPY remains in remarkably high territory and the currency pair needs to be treated carefully by day traders as the Bank of Japan maneuvers policy to accomplish economic goals.

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USD Weakness: Wagers on Fed Outlook as Risk Appetite Surges

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

USD Weakness: Wagers on Fed Outlook as Risk Appetite Surges

Yesterday’s start for the week was slightly subdued as many nations in Europe enjoyed a long holiday weekend. In Forex the past few weeks the USD has taken on a weaker stance and this was reiterated by last Wednesday’s slightly lower U.S Consumer Price Index results. The outlook of investors and financial institutions has once again shifted and a more dovish U.S Federal Reserve is being anticipated for the moment.

However, while inflation data from the U.S did come in with lower marks via the CPI report last week, it should be remembered the PPI actually came in higher. While there is a natural instinct to always be optimistic, the prudent fact is that risk management remains important. A glance into the looking glass via the USD/JPY shows that all is not calm in the world of Forex.

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USD/JPY Three Month Chart on the 21st of May 2024

While many currencies have gained against the USD since late April, the price action in the USD/JPY represents anxiety regarding central bank policies from the Bank of Japan and Federal Reserve. The USD/JPY since experiencing two interventions from the BoJ has incrementally climbed again – meaning the Japanese Yen remains weak, this while other major currencies like the GBP and EUR have gained against the USD. Yesterday’s Tertiary Industrial Activity data from Japan came in negative, showing strains exist within the Japanese economy which underlies why the Bank of Japan may be staying cautious. The ability of the USD/JPY to not trade in a correlated manner to global Forex is proving difficult for some day traders. Volatility within the USD/JPY is not finished.

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USD/ZAR 1 Year Chart on the 21st of May 2024

However, if people want to look at the knock-on positive influence of the weaker USD, they can glance at the USD/ZAR which is near important mid-term lows. South Africa will be conducting their national election next week on the 29th of May, which is likely to cause some nervousness for the currency pair. Even though South Africa continues to suffer from a struggling economy caused by questionable government policy and faltering infrastructure, the USD/ZAR is experiencing solid bearish behavior. However, risks certainly remain for the South African Rand and at its current values, some financial institutions may view the currency pair suspiciously.

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Gold Six Month Chart on the 21st of May

Gold remains within sight of record values achieved yesterday when the 2,440.00 USD plus levels were touched. The shift in behavioral sentiment towards risk appetite and a weaker USD centric attitude seemingly geared towards dovish Fed mid-term perspectives have helped the precious metal. Day traders should remain cautious with Gold and while the technical trend is enticing, it will be good to remember too much leverage coupled with blind betting can be dangerous. A clear warning sign that speculative zeal is high in Gold is that the current price of the commodity is 30.00 USD lower for the moment compared to yesterday’s highs. Price velocity can prove costly when a daily reversals goes against wished upon directions.

U.S equity indices and their ability to fight toward new highs is a clear sign risk appetite via outlooks within financial institutions and from investors remain strong. U.S Treasury yields should be monitored and if they continue to erode this will fuel optimism. One additional note for traders this coming week is that Memorial Day will be observed in the U.S next Monday, meaning there may be more impetus for some to buy U.S equity indices now instead of waiting out a long holiday weekend and coming back to markets which have gained. Yes, Fear of Missing Out could be a factor.

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USD/CNY Three Month Chart on the 21st of May 2024

Monday, 20th of May, China Loan Rates – while banks kept their 1 and 5 year Prime Rates in place per the reports yesterday. Last Friday’s Retail Sales figures came in weaker than anticipated, and New Home Prices produced another decline. Industrial Production numbers were however stronger than expected before going into last weekend. China remains in a difficult position economically and the USD/CNY should remain observed because it is elevated.

Tuesday, 21st of May, Canada Consumer Price Index – inflation numbers from Canada will be watched carefully. The results will impact the USD/CAD certainly, but unless there is a surprise result which misses estimates wildly, the currency pair should return to a USD centric mode rather quickly.

Wednesday, 22nd of May, U.S Federal Reserve FOMC Meeting Minutes – while this report is not read by many people, and the Federal Reserve will have taken a cautious rhetorical tone, the report may offer some tidbits for consideration. However, the reality is that U.S economic data has been a mess for the past few months. GDP showed signs of decreasing last month, but the multi trillion dollar question is if inflation is now under control. Folks looking for answers will not find them in the Fed notes. They will have to wait like everyone else for more data in the weeks and months to come.

Thursday, 23rd of May, European Flash Manufacturing and Services PMI – the Purchasing Managers Index reports from European Union members and the U.K are anticipated to show signs of some improvement mostly. The U.S will also be publishing its reports, although the Services report from the States is expected to be slightly weaker. Investors will react to all of this data. Positive readings from E.U and U.K would likely have a positive influence on the EUR/USD and GBP/USD for bullish speculators.

Friday, 24th of May, U.K Retail Sales – consumer spending is anticipated to show a decline. However, the last Gross Domestic Product report from the U.K was stronger than anticipated. While the Retail Sales data is important for the GBP/USD, as long as the outcome meets expectations or comes in slightly stronger than estimated the currency pair could retain technical value.

Friday, 24th of May, U.S Revised Consumer Sentiment and Inflation Expectations – the University of Michigan numbers for sentiment came in weaker than expected last month. The anticipated outcome is slightly better for this report. However, the inflation numbers should be watched carefully via the U. of Michigan statistics. The tick higher in recent reports regarding where prices are expected to go by consumers is troubling for the prospects of the U.S economy.

If American consumers are not confident they will spend less. Yet, within the strange world of economic data and policy consisting of lagging and forward looking numbers, if consumers feel less optimistic this means the U.S Federal Reserve will be pushed to consider cutting the Federal Funds Rate, unless inflation actually does remain elevated. And again, traders should remember that a long U.S holiday weekend might add to the rather electric financial markets.

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Market Trading Risks: Speculative, Anxious Impatient Results

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Market Trading Risks: Speculative, Anxious Impatient Results

Monday’s trading provided a solid oversight for day traders to observe market conditions in commodities, Forex and equities. Financial institutions appear to be leaning towards a belief the U.S Federal Reserve will have to become more dovish, but financial institutions and other large players are worried about shadows being caused by inflation concerns and timeframes which are likely sparking nervous wagers.

Via the commodities, results saw Gold come down from highs on Friday which approached the 2,380.00 USD perch, and drop to lows around 2333.00 yesterday. The precious metal remains within sight of record values, this as questions persist about USD direction, and speculative forces bet. WTI Crude Oil meanwhile climbed from a selloff late Friday and into yesterday’s opening while challenging the 77.75 USD vicinity, and as of early Tuesday is now over the 79.00 mark again.

Also within the volatile world of commodities it needs to be mentioned that Cocoa which regained a portion of its higher price values last week and finished Friday above 9,000.0 USD per metric ton, fell swiftly in yesterday’s trading session and is now traversing 7,357.0 USD. Cocoa has enjoyed a spectacularly wide ride of maneuvering via market forces. The commodity is still valued within loftier heights when compared to its historical averages, and demonstrates the speed and danger (and opportunity) of price velocity.

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Cocoa Three Month Chart on the 14th of May 2024

Further signs of risk appetite and fragile notions are being exhibited via U.S equity indices, which produced sideways price action yesterday as important economic data awaits and will certainly churn short-term and mid-term perspectives. The S&P 500 is again within sight of record levels, while investors of it and the Dow Jones 30 and Nasdaq 100 all brace for this week’s data which will affect their risk outlooks.

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S&P 500 Index Three Month Chart on the 14th of May 2024

Monday, 13th of May, New Zealand Inflation Expectations – yesterday’s quarterly result came in slightly below the previous report. The decrease of inflation concerns likely helped the NZD/USD spark Monday’s climb above 0.60300 briefly. This morning’s early trading is seeing sideways action as U.S inflation reports are anticipated and the currency pair ebbs around 0.60180.

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GBP/USD Three Month Chart on the 14th of May 2024

Tuesday, 14th of May, U.K Average Earnings Index, a gain of 5.7% has just been posted. This result will make GBP/USD traders nervous because it highlights that inflation remains sticky in Britain. While last week’s GDP numbers from the U.K showed an improvement, the growth certainly was not spectacular. The range of the GBP/USD remains choppy and bullish day traders targeting higher ratios on the belief the currency pair remains in oversold territory need to consider their timeframes and bias. While the 1.26000 may look like a logical target, it will take weaker U.S inflation and USD centric price action to get there.

Tuesday, 14th of May, U.S Core Producer Price Index – last month’s core report matched expectations. However, the PPI numbers occasionally spell trouble in Forex. Higher inflation results from the U.S would certainly kickstart volatility for all major currency pairs today.

Wednesday, 15th of May, U.S Consumer Price Index – this reading could prove to be the prime mover for financial assets this week because of its potential affect on behavioral sentiment. The Federal Reserve watches this number because of the influence it has on the American public. Forex will react to this report and if it is weaker than anticipated this would create weaker USD centric price action. The U.S will also report Retail Sales and the Empire State Manufacturing Index statistics on Wednesday.

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USD/JPY Three Month Chart on the 14th of May 2024

Thursday, 16th of May, Japan Preliminary Gross Domestic Product – last month’s report came in with a gain of 0.1%. This GDP data carries an expectation of minus -0.4%. Traders who like fundamentals should pay attention to revisions within the statistical pages. The Bank of Japan remains in a curious and suspicious predicament. After two interventions, the USD/JPY has climbed incrementally once again. The BoJ is certainly keeping their eyes on the USD/JPY and know financial institutions are still wagering against the Japanese Yen.

Day traders should be extremely cautious with the USD/JPY because the BoJ has the ability to strike with a massive blow when not expected. Risk management is essential for speculators wagering on this currency pair. Evidence of speculative interest in the USD/JPY correlates to the notion that while the USD has been weaker against many major currencies recently, the Japanese Yen remains within a weaker and elevated price range.

Friday, 17th of May, China Industrial Production and Retail Sales – economic dark clouds continue to cascade on Asia’s largest economy. The industrial numbers will be watched by investors certainly, but the overall health of Chinese consumers will likely be the focal point. The USD/CNY remains within bullish terrain, but the Shanghai Stock Exchange’s SSE Index has done well since its lows in the first week of February.
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AMT Top Ten Miscellaneous Tastings for the 10th of May 2024

by with No Comment AI & Machine LearningAMT MarketsFeatured Highlights

AMT Top Ten Miscellaneous Tastings for the 10th of May 2024

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10. Word of the day: Ultracrepidarian is a person who speaks assertively about subjects that are beyond their level of knowledge. The world is full of many suspects ladies and gentlemen.

9. Steve Albini: The musician and production sound engineer passed away earlier this week in Chicago. Albini was a pioneer and leader in ‘alternative’ music and battled homogenized corporate music for nearly 40 years. Nirvana, Fugazi, Jimmy Page, the Pixies, P.J Harvey are some of the many that worked with Albini.

8. Bitcoin: BTC/USD continues to hover around the 63,000.00 realm per a three month technical chart perspective. Bitcoin’s higher values via one year results are being maintained. BNB/USD is lurking near 600.00 per a three month glance.

7. Commodities: Cocoa and Coffee prices remain elevated. After touching a low around the 7,250.00 USD mark last week per metric ton, Cocoa is now within sight of 9,000.00 USD again. Retail speculators who like to wager via CFDs on commodities need to remember their bets have no influence on the markets, which are in complete control by the largest players in the commodities sector.

6. Wayve Technologies: A U.K based company specializing in autonomous driving software has announced they have raised more than 1 billion USD in investments recently via the likes of Softbank, Nvidia and Microsoft. The U.K government has highlighted Wayve, proclaiming it shows Britain will be a major force in AI development. Wayve was established in 2017 and is still a privately held company.

5. U.S Foreign Policy: Election concerns appear to be a prime motivator for the U.S executive branch as its attempts to walk a fine line regarding diplomacy and saber-rattling in the Middle East. Polling from a variety of sources indicate Joe Biden is in jeopardy of not being reelected.

4. USD/CNY: China will release its Consumer Price Index and Producer Price Index numbers early on Saturday. The USD/CNY is trading around the 7.2245 mark as of this writing. Some analysts have expressed concerns about the China Yuan weakening via attempts by the Chinese government to boost exports. The USD/CNY certainly remains within the higher elements of its range, but is below marks seen in early September 2023 which were around the 7.3425 ratio.

3. Data Warning: While day traders may be inclined to look at the University of Michigan’s Consumer Sentiment reading today, they should remember to pay attention to the Inflation Expectations statistics. Last month’s inflation report produced a result of 3.2%, which delivered a solid dose of volatility to financial assets.

2. Forex: Behavioral sentiment appears to be leaning towards a weaker outlook for the USD as major currencies like the EUR, GBP (solid GDP numbers also helped this morning in Britain) and others have gained. However, its should be pointed out that the USD/JPY has seen an incremental climb since touching a low of nearly 151.880 last Friday. As of this writing the USD/JPY is around the 155.650 level.

1. Equity Indices: Bullish optimism has been seen in the S&P 500, Dow 30 and Nasdaq as all three major indices are ready to start the day near highs for the week. The burst of upwards momentum which started last Thursday, has ignited the major U.S indices within sight of their apex realms achieved in late March and early April.

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Forex: Shifting Winds and Potential Optimism for Speculators

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Forex: Shifting Winds and Potential Optimism for Speculators

The BoJ intervened in Forex and propelled two fast selloffs of the USD/JPY last week. The actions by the Bank of Japan did not come as a surprise as the central bank seeks to maintain a dovish interest rate policy, a relatively weak Japanese Yen – but also a philosophy of not letting the JPY to suffer too much. Speculators and financial institutions got caught up in the price action which ensued as a clash developed between large traders and the BoJ as equilibrium was sought.

The BoJ clearly wants to keep the USD/JPY within the weaker realms of its long-term values to spur on the Japanese export sector with solid business results. However, domestically the Japanese government doesn’t want inflation within Japan to inflict too much pain for its citizens. BoJ interventions were carried out twice last week, once during a holiday in Japan, and the second when most global financial institutions were shuttered. At the time of this writing the USD/JPY is trading near the 153.720 mark.

Day traders always need to understand just how small they are within the larger speculative world. They need to judge economic intelligence and forecasts to get an understanding where behavioral sentiment could affect tides.

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USD/JPY One Month Chart on 6th of May 2024

In the U.S, inflation and growth data caused investors to react nervously a week and a a half ago, additionally more anxious moments were fueled by the Federal Reserve’s FOMC Statement this past Wednesday when the Fed said it was uncertain about the timetable that inflation would return to their stated goal of two percent. Forex trading has been volatile the entire calendar year of 2024 for speculators.

Nearly ten days ago while inflation continued to prove it was stubborn via the U.S GDP Price Index on the 25th of April, Advance GDP data was much weaker than expected showing that economic growth was slowing. And last Friday’s Non-Farm Employment results were not only weaker regarding hiring, but also showed a slight drop in Average Hourly Earnings. This might have been enough to begin causing a shift in financial institution outlooks. This week of trading will prove interesting regarding risk appetite versus risk averse sentiment, particularly if large players believe economic data is finally catching up to the Fed’s rhetoric.

U.S equity indices which started last week with selling and battled lower depths in the middle of the week, began to see buying develop on Thursday, and finished Friday’s trading within their highs via weekly technical charts. While it is easy to report the past, it is the future speculators want to know. The ability of the U.S jobs numbers to produce results which were seen in a favorable light regarding the Fed’s ability to potentially cut the Federal Funds Rate certainly was an optimistic sign for financial institutions. If inflation can remain under control it would help the global economic picture. On that note, WTI Crude Oil is trading below 80.00 USD and should be monitored.

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S&P 500 Index Three Month Chart on 6th of May 2024.

Monday, 6th of May, European Union Final Services PMI – Italy, France and Germany among other will present Purchasing Managers Index data. The broad numbers are mostly expected to replicate the previous month’s outcomes. Traders should note the U.K is observing a banking holiday today, which means lighter than normal Forex volumes will be seen.

Tuesday, 7th of May, Reserve Bank of Australia Monetary Policy Statement – the central bank is not expected to change its interest rate. The AUD/USD has provided some upwards momentum the past week. The RBA is not expected to step out of line regarding global central bank policies. Expect talk about an optimistically cautious outlook by the RBA as they preach patience regarding an interest rate cut.

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AUD/USD One Month Chart on 6th of May 2024

Wednesday, 8th of May, Bond Sales from Japan, the U.K and the U.S – while many European nations observe a holiday, Japan, Great Britain and the U.S will sell government debt. U.S Treasury yields should be watched and equity indices should have an eye kept on them. If behavioral sentiment remains optimistic as this day comes to a close it could set the table for more bullishness, particularly if the USD remains relatively tame or weaker.

Thursday, 9th of May, Bank of England Monetary Policy Summary – the BoE is likely to mirror other central banks and keep its interest rate policy in place. No changes are expected to the Official Bank Rate. However, it would not be surprising to hear the BoE try to pose upbeat expectations, and if this occurs perhaps the GBP/USD will continue to find some momentum upwards.

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GBP/USD One Month Chart on 6th of May 2024

Thursday, 9th of May, U.S Weekly Unemployment Claims – investors will keep their eyes on the jobs report. If the numbers come in around expectations this would allow risk appetite to remain strong in the near-term.

Friday, 10th of May, U.K Gross Domestic Product – an expected gain of 0.1% is forecast. GBP/USD traders who have bullish sentiment will be looking for the number to match expectations or beat the anticipated result. If the number is weaker, this could cause a reversal lower in the GBP/USD and an attempt to push back against gains made in the currency pair recently.

Friday, 10th of May, U.S Consumer Sentiment and Inflation Expectations via the University of Michigan – these readings will be watched by investors to see if consumers continue to show decreasing confidence in the U.S economy. While it sounds counter intuitive to want eroding sentiment regarding the ability to spend money, this would create more ammunition for the Federal Reserve to consider an interest rate cut. The Inflation Expectations could be the catalyst for traders going into the weekend regarding the USD.

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AMT Top Ten Miscellaneous Observations for 3rd of May 2024

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Observations for 3rd of May 2024

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10. Formula One: The Miami Grand Prix race will be held on Sunday. Whispers have been heard that Red Bull driver Max Verstappen has been approached by Mercedes bidding an annual contract over 150 million USD, but that he has not accepted the offer. However, Adrian Newey, engineer and CTO of Red Bull Racing, has confirmed he is leaving the team after 19 years of leadership. F1 certainly needs more competitive racing, a shake up at Red Bull could deliver this for the sport.

9. De-movements: Desire for decolonization, decarbonization, depopulation, turned into delusion and dehydration for Columbia University protestors and the need for a glass of water per the request of a student leader. Perhaps de-escalation is next.

8. Geopolitics: The nation of Georgia is dealing with demonstrations as some citizens show disdain regarding feared political influence from Russia. Georgia has an approximate population of 3.7 million. The East European and West Asian country has seen civil disobedience on the streets of Tbilisi increase this week.

7. Lower Values: Cocoa is near 7,658.00 USD per metric ton as of this morning, on the 19th of April it traded above 12,000.00 briefly. BTC/USD is around 59,250 after having faced headwinds this week.

6. Gold: The precious metal has sold off this week and is hovering near 2,300.00 per ounce as concerns build about USD outlook remaining strong over the mid-term. A low of nearly 2,282.00 was seen on Wednesday. Today’s publication of U.S economic data will push the price of Gold around.

5. Mixed Trading: Equity indices have produced uneven results this week as investors try to find equilibrium. Optimism almost always is the eventual emotion long-term institutional market participants lean towards. The S&P 500, Dow 30, and Nasdaq Composite all gained yesterday, but remain below highs from earlier in the week. Behavioral sentiment appears fragile and many Fed observers are disgruntled.

4. Uncertainty: The Federal Reserve has admitted it is unsure about future economic progress this calendar year. When questioned about the potential of stagflation Fed Chairman Jerome Powell said he see no signs of this – while forgetting to add that politically saying such a thing would likely cost him his job. And lets remember, the Fed claimed they thought inflation was transitory in July of 2021.

3. Bank of Japan: A battle is underway with the USD/JPY as the BoJ has staged two interventions this week. Intent on trying to create economic growth via stronger exports, while allowing import inflation to be seen, the BoJ interest rate policy remains dovish. The USD/JPY is near 153.230 now, but it is unlikely to go into the weekend with this price. An apex on the 29th of April approached the 159.610 ratio. Financial institutions and Japanese Yen traders must remain alert.

2. High Anxiety: Day traders in Forex, equity indices and commodities have certainly seen heightened volatility and the choppiness is going to persist. Retail brokers will welcome speculators with open arms and point to opportunities, but traders need to understand the ‘casino’ often is making money via losses incurred because of leveraged wagers which turn into losing bets when price velocity hits.

1. Jobs Data: Yet another opportunity for inflation to be seen today via the Average Hourly Earnings numbers. A cautionary road sign was seen this Tuesday when the U.S Employment Cost Index came in with a stronger than anticipated quarterly gain of 1.2%. The USD will remain a lynchpin in many financial assets, and Treasury yields should be watched after the employment statistics have been printed.

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Speculative Notions: Gold and the USD as the Casino Lives

by with No Comment AMT MarketsAssetsFeatured Highlights

Speculative Notions: Gold and the USD as the Casino Lives

Notes on speculation via the prism of Gold and the USD, with questions about value as short-term wagers versus long-term investment are considered.

Speculative forces eventually run out of power, leaving investors and businesses to conduct their affairs via the assets they are using to proceed with enterprise as they judge fair market price.

Assets like Gold (commodities) the USD (Forex) and equities (corporate shares) are a battleground for those who are trying to make short term profits from price action movement (sometimes – volatility) versus those who are holders of the assets in order to run their lives (corporations, private businesses, finance).

Perhaps the speculative forces are not a Las Vegas environment completely, but it is a strange mix of risk management and gambling. And because of the price changes in these assets as supply and demand are transacted – the realization that the potential of hedging against sudden gyrations in price is used as insurance, but also as a dangerous speculative tool needs to be considered.

Futures, options and cash markets combine and are mixed like a stew consisting of trillions of USD value as global enterprise and financial casinos flourish.

Let’s take a look at Gold as an example. There is only so much physical Gold on the planet earth – a finite amount. There is only so much that can be taken out of the ground in a year. There is only so much Gold an individual can safely store in their home, before they have to use other secure venues. Central banks may have backed away from the ‘gold standard’ but they understand the importance of the precious metal as proven and tested by thousand of years of commerce. Gold can be used as the exchange of value for a good and this will likely remain the case for long time.

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Gold One Year Chart as of 23rd April 2024

The price of Gold serves as a hedge against inflation. The value of Gold today roughly buys you the same things it bought you a thousand years ago, when compared to monetary units which fluctuate like the wind. Because cash in many cases throughout history becomes weakened, losing its value because of bad government policy which causes the people holding the ‘paper’ to lose confidence; and then creates the desire for the precious metal which has almost entered our conscious DNA as a source of value which doesn’t change.

We can speculate on what the Gold price will be today, tomorrow, next year, but we know the fluctuations will roughly equate into what our consciousness – logic – tells us what the main reserve currency that rules the land will be worth – in this case the USD.

For the time being, the USD acts as the reserve currency of the world and is weighed against the value of Gold – literally – remember Gold is valued per ounce in USD.

The ability of Gold to climb to record highs recently was put into question, because at the same time the USD was getting strong. This signaled to traders that a known speculative force in Gold was at play; yes, it could be said a speculative force was at play in the USD too, because of Forex and the Federal Reserve, but Gold rose the past month and a half dramatically while the USD also was gaining value.

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USD Cash Index One Year Chart as of 23rd April 2024

Thus, suddenly the inverse correlation of Gold and the USD which are literally weighed against one another was suddenly off balance. The USD was gaining and gold was rising, and one of them was likely ‘full of hot air’ – an imbalance.

Meaning Gold had become inflated in value perhaps, because of speculative forces. While folks could point to geopolitics, and central banks such as China and Russia and maybe Iran wanting Gold because they are ‘angry’ at the U.S and want to signal they do not believe in the USD. There is only so much money these speculative forces have, and they hold the USD as a store of value too, which means if they bet too much on Gold they can find their positions – weight – imbalanced.

The USD remains the world’s reserve currency, and the value of the greenback particularly as the Fed has come under pressure, via the weight of inflation, and had to admit they cannot cut interest rates until inflation erodes has made the reserve currency stronger again. The use of the USD is easier than using Gold. There is not enough Gold in the world to transact business to business, person to person physical exchange everyday. Thus Gold becomes a ‘store of value’ via inventories not only in secure facilities but our minds too.

The past couple of days have seen Gold perhaps lose value again as the counterweights have come back into focus. It was bound to happen as long as the USD remains the world’s reserve currency in which value can be distinguished versus the commodity.

Speculative forces do run out of power, and now after Gold flirted with the 2,400.00 plus level recently, maybe Gold should return to its values which were seen in late 2023, which is where the USD Cash Index is essentially standing technically. Lets also remember where U.S Treasury yields were during this time, long-term bonds are a measure of interest rates and outlook via the Federal Reserve – used as an insurance and investment vehicle by those looking to lock in ‘returns’. Yes, Treasuries can be speculated on too, but their values coincide with USD legitimacy and the Federal Funds Rate.

It is a thought, a speculative notion, let’s see what happens. What should the speculative price of Gold be now compared to the USD? Should it be lower, closer to the 2200.00 to 2100.00 USD levels? The casino will give us the answers.

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Impact: Powell’s White Flag, Inflation Data, and the BoJ

by with No Comment AMT MarketsAssetsFeatured Highlights

Impact: Powell's White Flag, Inflation Data, and the BoJ

Federal Reserve Chairman Jerome Powell’s waving of the ‘white flag’ last Tuesday, when he admitted that inflation was producing stronger than anticipated data had been essentially wagered on since the second week of March by financial institutions. Powell’s speech acknowledging the Fed will find it difficult to cut the Federal Funds Rate in the mid-term (and probably at best not until late this summer) simply verified Forex positions which had already been taken by large players who could afford to make mid-term wagers.

The USD Index has returned to early November 2023 values, and appears able to challenge late September and October prices if inflation data this week causes more volatility, which should put traders of major currencies like the GBP, EUR, JPY and others on full alert. After the USD spiked higher from the 10th to the 12th of April, Forex speculators have seen dynamic action incrementally flirting with stronger USD results the past week and a half.

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USD Cash Index Six Month Chart as of 21st April 2024

Nervous trading continues to be seen in U.S equity indices. The Dow 30 and the Nasdaq 100 are fighting near ratios they touched in the last week of January. And the S&P 500 is traversing ground from the first week of February.

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S&P 500 Three Month Chart as of 21st April 2024

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Gold Six Month Chart as of 21st April 2024

Gold remains speculatively high as its hovers near 2,400.00 USD per ounce. The price of the precious metal has not given back its gains made since the start of March and this is intriguing because of the ‘known’ USD inverse correlation, which had proven to work well with the precious metal over the past couple of years but has been stopped in its tracks for the moment. Technically Gold may look overbought, but geopolitical concerns and the prospect that some central banks may be strong buyers could be fueling the rather incremental gains. Retail traders of Gold need to be careful because price action is likely to produce more surprises.

Forex has been turbulent the past handful of months as shifting behavioral sentiment has created choppy conditions. This coming week contains large fundamental risk events via data releases traders should monitor. USD/JPY speculators will also have to contend with the Bank of Japan.

Monday, 22nd of April, China Loan Prime Rates – borrowing costs are anticipated to remain at the current benchmarks. China produced slightly better Gross Domestic Product results last week, but Industrial Production numbers were weaker. Consumers in China remain burdened by decreasing home values and concerns about the economy.

Tuesday, 23rd of April, European Union and U.K Manufacturing and Services PMI – E.U results via the PMI readings are expected to show slight improvements. However the readings from the United Kingdom are anticipated to come in flat. The EUR/USD and GBP/USD will be affected by the results, but the currency pairs will likely remain focused on U.S data later in the day.

Tuesday, 23rd of April, U.S Purchasing Managers Index – the Manufacturing and Services sectors are expected to produce slightly better readings than the previous month. These results will be interesting taking into consideration the Empire State Manufacturing Index numbers last week were bad. The PMI statistics will provide some impetus to the broad Forex market.

Wednesday, 24th of April, Australia Consumer Price Index – inflation data is anticipated to be higher than the previous month’s results. While stronger inflation is not something that will make consumers happy in Australia, stubborn price results may keep the AUD/USD slightly steadier. The currency pair is traversing values last seen in the second week of November 2023 as of this writing.

Thursday, 25th of April, U.S Advance Gross Domestic Product and Price Index – these numbers are certain to have an impact on all financial assets. A decline in growth is anticipated in the U.S compared to the previous month’s result, but the Price Index is expected to show an increase. Jerome Powell having come out last week and said inflation is causing uncertainty within the Federal Reserve, may have a bit of inside knowledge regarding this GDP inflation number and ‘tipped his hand’. If this inflation gauge is higher than anticipated it could pour fuel onto the already volatile USD. All Forex traders need to pay attention to these results and be prepared with solid risk management.

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USD/JPY One Year Chart as of 21st April 2024

Friday, 26th of April, Bank of Japan – in what has already proven to be a couple of weeks filled with drama for the USD/JPY, the BoJ will step into the limelight. During their last central bank meeting the Bank of Japan increased the Policy Rate to 0.10%. It was the first time the BoJ hiked interest rates in 17 years. The USD/JPY is trading at values last seen in June of 1990. The Nikkei 225 has come off of recent record heights, but the famed Japanese stock index is also trading within territory seen in January of 1990. Business activity via the Core Machine Orders and the Tertiary Industry data last week were stronger than anticipated.

The Bank of Japan may want to maintain a weaker USD/JPY equilibrium to continue fostering domestic growth. However, many financial analysts have been calling on the BoJ to become more hawkish regarding monetary policy. The interest rate decision is certain to cause immediate volatility before and after the Policy Rate is made public. USD/JPY traders need to be prepared for fireworks. A slight raise of the interest rate seems to be needed, but after the March hike the BoJ may prove conservative again. The 34 year lows now being seen in the Japanese Yen are astonishing.

Friday, 26th of April, U.S Core PCE Price Index, and Inflation Expectations – the data from the government, and the reading from the University of Michigan will close the curtain on a big week of economic statistics for all traders. The USD will react to these outcomes. It should be noted the previous Inflation Expectations data from the University of Michigan caused a storm in Forex when it came with 3.1% gain.

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Retail Traders Caught Out by Shifting Sentiment as Data Hits

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Retail Traders Caught Out by Shifting Sentiment as Data Hits

Forex speculators who relied heavily on technical data solely last week were likely punched in the gut by the rather surprising numbers from the Consumer Price Index results in the U.S last Wednesday, particularly if they were on the wrong side of trading trajectories. U.S inflation has shifted sentiment within many large investors with a rather seismic move regarding mid-term outlooks. Financial institutions which have been counting on cuts to the Federal Funds Rate have had to take a step backwards.

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EUR/USD Five Day Chart as of 15th April 2024

The dynamic momentum in Forex hit major currency pairs in the middle of last week and washed away support and resistance levels within a blink of the eye. Behavioral sentiment turned U.S Treasuries yields upwards and the major equity indices also experienced nervousness. Volatility also continued in Gold as new record values were produced, and then were followed by a rather strong reversal lower which likely hurt over-leveraged day traders.

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Gold Five Day Chart as of 15th April 2024

Not only were U.S inflation numbers important last week, but geopolitical noise became heightened. Perhaps the climb in Gold before the weekend was helped by the anticipated conflict between Iran and Israel which did play out. The price of the precious metal and WTI Crude Oil have been more tranquil early today, which may be a signal for the moment that large market players are calm.

Monday, 15th of April, U.S Core Retail Sales – after last week’s larger than expected increase in the CPI results, the spending report today will get attention from financial institutions. Last Friday’s Preliminary Price Expectations reading from the University of Michigan did not allow investors to rest when it came in with a 3.1% elevated mark. If today’s Retail statistics are above expectations, this could make Forex roil again.

Tuesday, 16th of April, China Industrial Production and Gross Domestic Product – these economic reports will be watched closely by international investors. While there have been murmurs that China’s economy is improving, and media reports that the Biden administration is trying to engage diplomatically, the industrial and GDP results are expected to be weaker than the previous month’s outcomes. China will also release Retail Sales figures.

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GBP/USD Five Day Chart as of 15th April 2024

Tuesday, 16th of April, U.K Claimant Count Change – last Friday’s GDP report from Britain did not produce any significant surprises. The U.K economy continues to struggle, but like most spheres inflation remains a problem. The GBP/USD sunk violently last week, while many speculators may believe it is currently oversold they may want to remain cautious.

Because of the U.S Federal Reserve’s own perilous fight against inflation, there are some who believe the Bank of England may need to cut interest rates before the U.S central bank. However, given the lack of proactive characteristics from the BoE and ECB which have been on full display as they dance in step with the Federal Reserve, this makes a BoE cut before the Fed a skeptical notion for the time being. The GBP/USD will stay largely USD centric even in the wake of this U.K employment report.

Tuesday, 16th of April, U.S FOMC Members – a parade of Federal Reserve voting policymakers will speak at various events, this includes Fed Chairman Jerome Powell. There will likely be little in the way of surprises from the Fed members as they likely all stick to ‘party’ lines and emphasize a cautious outlook.

Wednesday, 17th of April, U.K Consumer Price Index – the inflation report could prove to be catalyst for the GBP/USD. If the CPI number does come in weaker than expected it could spur on behavioral sentiment shifts regarding the potential for changes to BoE policy. Because the GBP/USD was so volatile the past week, day traders should be prepared for rather combustible price action from the currency pair which may look counter-intuitive. Smaller speculators should remember that ‘smart money’ from larger players may be positioned for the results of the U.K CPI data already.

Thursday, 18th of April, U.S Weekly Unemployment Claims – although not the most significant of reports usually, financial institutions are ‘waiting’ on a change of statistical direction via labor market evidence. If jobs numbers start to come in weaker than anticipated – meaning there are higher jobless claims – then the USD could react with some selling.

Friday, 19th of April, U.K Retail Sales – having endured a rather wild trading cycle, Great Britain will deliver one more important economic report to end this week. The GBP/USD will react to the consumer spending results.

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AMT Top Ten Miscellaneous Wonders for the 12th of April 2024

by with No Comment AMT MarketsArtificial IntelligenceFeatured Highlights

AMT Top Ten Miscellaneous Wonders for the 12th of April 2024

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10. Free Press: Brazil and the Lula de Silva government are cracking down on dissent in social media. ‘X’ – formerly Twitter – led by Elon Musk is fighting back and refusing to cooperate as Brazilian ‘leadership’ attempts to intimidate the ‘loyal opposition’ in the legislature.

9. GROOT: Nvidia is working on ‘humanoid’ robotics. Project GROOT was presented by Jensen Huang at the GTC Conference. The synergy between machine learning, semiconductors and robotics is an evolution taking place before our eyes. Tesla is involved in similar research as it works on Optimus.

8. Hot Chocolate: Speculation in Cocoa has brought the commodity above 10,400.00 USD per metric ton as of this writing. Questions about gravity and hypersonic speculative values are logical at this juncture.

7. Seclusion: Do humans still need each other? People are relying on their mobile devices for social interactions. Robotics with AI capabilities will make our existence potentially more lonely. Open source software DOBB-E will be part of this future as household chores are taken care of by ‘machines’.

6. Iran: Those with holiday excursion plans which include Teheran this weekend may need to check on ticket availability due to the possibility of flight cancellations.

5. Fed Liberty: President Joe Biden this week spoke about an interest rate cut coming from the Federal Reserve this year, yet Consumer Price Index statistics are demonstrating escalating expenses. Current U.S government leaders may want to spend less on ‘vote buying’ via student loan forgiveness and think about conservative fiscal practices. Why should Americans who choose not to attend universities pay for those who did via higher taxes? Are Fed and Treasury officials still independent?

4. Risk Averse: Gold is within sight of 2,400.00 USD this morning. In the meantime U.S bond yields have inverted completely except for the 30-Year issue. Financial institutions are showing nervous behavioral sentiment.

3. USD Centric: Forex has seen reactive trading this week as financial institutions begin to conclude the U.S Federal Reserve’s monetary policy ‘over time’ will remain disturbingly difficult and full of doublespeak.

2. Caution: Mixed results are flourishing in the major U.S stock indices as the Nasdaq 100 and S&P 500 touch late March values, and the Dow Jones 30 has returned to February levels. Higher than anticipated interest rates are causing turbulence.

1. Energy Illusions: As the prices of food, transportation and housing escalates isn’t it time governments start to question their ‘green’ policies which are making the costs of energy production more expensive? We all want a clean planet, but logical strategies must be applied to create efficient use of resources.

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USD/ZAR Celebratory Parade Should be Put on Hold Awhile

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

USD/ZAR Celebratory Parade Should be Put on Hold Awhile

The USD/ZAR has produced a solid downward turn since the 1st of April when the currency pair was trading above 19.00000.

The value of the USD/ZAR as of this writing is near the 18.48000 mark as the currency pair fluctuates within Forex. The currency pair has produced a solid downturn since the start of April when it was above the 19.00000 level. The ability of the USD/ZAR to suddenly create a streak of bearish trading and make support levels look vulnerable is intriguing, particularly considering USD centric sentiment against many other major currencies the past week and a half has produced very choppy results in the broad Forex market.

The USD/ZAR is now trading at its monthly low via a technical perspective and the currency pair is testing values last seen at the start of January. The ability of the USD/ZAR to suddenly spark selling may be able to be explained because of the higher value of Gold which is trading at record prices while traversing near 2,360.00 USD currently. Mining makes up roughly 8% of the Gross Domestic Product value for South Africa.

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USD/ZAR One Month Chart as of 9th April 2024

However, before a party is launched to start celebrating the reemergence of the South Africa Rand, traders should note the USD/ZAR was trading within its current value range on the 14th of December. Thus the South African Rand is simply taking up residence like many other major currencies including the GBP and EUR within known prices they were valued, when the U.S Federal Reserve ‘changed’ its monetary policy stance on the 13th of December to a more dovish outlook.

The choppiness within the USD/ZAR has been rather extreme over the past few months. On the 28th of December the USD/ZAR was trading near the 18.26000 ratio briefly, on the 23rd of February the currency pair was near the 19.40000 mark and testing values which had been last seen in October of 2023. While the price of Gold is at record values now, the worth of the precious metal might be a false correlation to the USD/ZAR, and technical traders may want to watch the currency pair’s support levels below as a place that reversals higher could be sparked.

U.S Data and Concerns in South Africa Regarding the Election

The U.S will release important inflation data on Wednesday and Thursday. Last month’s Producer Price Index numbers from the States sparked a wave of volatility in Forex and the USD/ZAR was not immune. The bearish cycle in the USD/ZAR has been noteworthy, but fundamental doubt exists regarding its ability to sustain lower price momentum. The U.S Federal Reserve does not appear any closer to cutting its Federal Funds Rate.

There is also a political shadow regarding South Africa elections. The nation’s vote will take place on the 29th of May. The results potentially could create instability and the need for a coalition government which may be difficult to attain without signing off on more costly social policies which the South African government cannot easily afford fiscally.

USD/ZAR Short Term Thoughts:

·         The 18.46000/18.47000 support levels in the short-term may cause reactions if challenged.

·         Traders are urged not to be overly ambitious, particularly if they still want to pursue downside in the USD/ZAR, the use of take profit and stop loss orders is appropriate.

·         Current price levels may spark volatility if financial institutions feel the price of the USD/ZAR has become unbalanced.

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Forex: Behind the Curtain as Speculative Deja Vu Strikes

by with No Comment AMT MarketsCentral BanksFeatured Highlights

Forex: Behind the Curtain as Speculative Deja Vu Strikes

Friday jobs reports came in stronger than anticipated on the surface, and this led to a roller coaster like ride for Forex traders as results were acted upon by financial institutions. However, a look behind the data shows ‘positive’ results were spurred on by part-time hiring and government influences leading to a notion that jobs numbers were not exactly a ray of sunshine regarding U.S economic health. The suspicious results cause a desire to look for ulterior motives, and to wonder if election year politics are playing a role in the U.S employment picture.

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GBP/USD Six Month Chart as of 9th April 2024

The GBP/USD and EUR/USD are rather insightful for technical and fundamental traders. The currency pairs are languishing as of today’s values near pricing that was seen in the second week of December. Since the ‘announcement’ from the U.S Federal Reserve on the 13th of December that a change in monetary policy would begin to occur in 2024, in actuality nothing has really happened, except government ‘speak’ trying to sound as if everything is understood and in control, while it is clearly not.

Economic data from the U.S and Europe has continued to be soiled by mixed results, and retail speculators looking for a trend to emerge have had to deal with choppy conditions. Financial institutions remain unclear about interest rate outlooks. The Fed while trying to ‘sound’ dovish rhetoric remains locked within a Google engine keyword mantra as they mutter the phrase ‘over time’ when trying to convince people that interest rates will ‘eventually’ be cut.

Last week leading up to the Non-Farm Employment Change numbers, many FOMC members were offering cautious tones about the Federal Funds Rate and warning it should not be changed yet. The implication of the Fed’s verbiage could lead some to suspect they have all practiced statements handed to them by their overlords who are concerned this is an election year and jobs are in jeopardy.

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EUR/USD Six Month Chart as of 9th April 2024

Which leads us back to Forex and all financial assets, as investors try to swim waters which have left fundamental perspectives grasping at data which is not easy to decipher. U.S government policy is practicing fiscal spending that is causing massive debts, and perhaps influencing hiring data which may be more akin to putting lipstick on a pig. Many U.S voters seemingly lean towards electing officials who promise to hand out the biggest ‘social rewards’, while ignoring there will be a price to be paid down the road.

The Federal Reserve in the meantime tries to sound optimistic about inflation eroding, but concerns due to U.S government debt being accrued, and global geopolitical affairs combined with energy policy which is making it more expensive to maintain cheap transportation, efficient agriculture and manufacturing, shadow the Fed’s hopes. WTI Crude Oil remains over 86.00 USD per barrel. Gold is trading at record high values and above 2300.00 USD. Does anyone see the dangerous connections? Equity indices should be watched as a barometer this week.

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USD/JPY Six Month Chart as of 9th April 2024

Monday, 8th of April, Japan Average Cash Earnings and Economic Watchers Sentiment – yesterday’s reports matched expectations regarding wages, but workers surveyed noted their concerns about incremental inflation which is being seen in Japan. The USD/JPY is challenging November higher values and the Bank of Japan has been widely criticized for not raising interest rates more aggressively. However, it is possible the BoJ wants the Japanese Yen to remain within its weaker price range to spark a stronger Japanese economy via exports.

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AUD/USD Six Month Chart as of 9th April 2024

Tuesday, 9th of April, Australia Westpac Consumer Sentiment – the results via the consumer reading came in negative. The AUD/USD like the GBP/USD and EUR/USD is traversing values tested in the second week of December 2023, leading to the feeling of deja vu.

Wednesday, 10th of April, U.S Consumer Price Index – you have heard this before, the inflation reports from the States are going to rattle the financial markets including Forex. The USD is certain to react. Data from the U.S has produced surprises aplenty in the past few months. The Consumer Price Index is important and day traders certainly need to pay attention.

Thursday, 11th of April, European Central Bank – the ECB is not expected to change its Main Refinancing Rate, but many analysts believe they should cut borrowing costs. However, the ECB will likely remain within the camp of choosing to ‘wait and see’. The ECB Press Conference with Christine Legarde has widely become regarded as an opportunity for political speech as much as an economic dialogue. Recent data from the European Union suggests the worst of the recessionary cycle is gone, but German Trade Balance numbers released on Monday were negative, highlighting hurdles remain. Inflation is a worry, and a cut to the interest rate might be able to help spur on economic activity while counting on lagging data to prove proactive policy should be implemented. But this likely is not going to happen and the EUR/USD will remain problematic.

Thursday, 11th of April, U.S Producer Price Index – these slew of reports should be watched carefully. If the data is stronger than expected it is likely a part of the residue caused by higher energy costs that have affected logistics and created more expensive raw materials which are needed to produce goods. It was the higher PPI reports last month that caused dramatic tidal shifts in Forex, speculators should brace for the potential of additional mayhem.

Friday, 12th of April, U.K Gross Domestic Product – last month’s GDP numbers from Great Britain came in slightly higher than expected with a 0.2% gain, this report is anticipating growth of only 0.1%. Traders should take a deeper look at the statistics upon publication and check for revisions to past months. The U.K economy has been struggling, the ‘growth’ results will affect the GBP/USD before going into the weekend.