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To Risk or Not to Risk that is the Speculative Question

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

To Risk or Not to Risk that is the Speculative Question

Last week U.S equity indices demonstrated a rise in value. The highs achieved in the Dow Jones Industrial Average, the NASDAQ Composite and the S&P 500 by the end of last week only touched values seen in the middle of October. And while their ratios remain below the highs of early August and falling values seen in September, the move upwards was certainly welcome by financial institutions and day traders who hold optimistic viewpoints.

U.S Treasury yields declined last week. While incremental decreases were made through Thursday, the U.S Non-Farm Employment Change and Average Hourly Earnings reports both coming in below expectations on Friday, created a stronger dose of lower yields. The 5, 7, 10 and 30 year U.S Treasuries are now trading near mid-September values. The 2 and 3 year notes are moving around early September numbers.

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Gold One Year Chart as of the 5th November 2023

The USD grew weaker in slight movements against many major currencies last week, but upon the weaker jobs numbers found increased selling price velocity. Gold however remains suspiciously strong, which brings up the notion that risk adverse ‘insurance’ is still being held closely by investors who remain nervous.

The Middle East crisis is ongoing in Israel against Hamas and to a limited extent Hezbullah, but financial institutions have seemingly been able to digest the news and remain tranquil and vigilant. Another sign of calm coming into the global financial markets is the price of WTI Crude Oil which finished the week under 81.00 USD per barrel.

Economic data will be relatively light this coming week, and behavioral sentiment appears to be the potential larger factor until Friday regarding impetus for day traders and financial houses. Certainly loud global developing news could suddenly erupt and cause nervous investors to falter, but last week’s trading results showed signs of improving risk appetite.

The U.S Federal Reserve met expectations last Wednesday and didn’t raise the cost of borrowing. The mid-term seems to indicate interest rates will remain high, but that the U.S central bank will not raise the Federal Funds Rate anytime soon. The lower than expected inflation report via the Average Hourly Earnings before going into the weekend helped highlight this thinking, although it remains a consideration that is still speculative.

Officials from the major central banks including the BoJ, BoE and Fed will be speaking this week and could cause turbulence with their rhetoric. However, no major surprises will likely come from their mouths. Although the Bank of Japan may rattle the prospects of intervention to keep USD/JPY traders on their toes.

Monday, the 6th of November, Germany Factory Orders – the result is expected to be negative and highlight the nation remains within recessionary conditions. The Sentix Investor Confidence reading will also be released slightly afterwards for the European Union and a worse number than last month’s outcome is anticipated. But the EUR/USD is likely to remain mostly USD centric, even though these reports could cause momentary fluctuations.

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AUD/USD Six Month Chart as of the 5th November 2023

Tuesday, the 7th of November, Australia Cash Rate – the Reserve Bank of Australia is expected to raise its interest rate by 0.25% to 4.35%. Will the RBA take a gamble and not raise the interest rate due to other major central banks holding their rates in place, or will the increase go ahead to fight stubborn inflation while trying inspire some confidence in the AUD? A hike seems to be the direction the RBA will decide upon, having said that, the Australian central bank have surprised financial institutions before.

Wednesday, the 8th of November, U.S 10-year Bond Auction – the results from this sale and the yields that develop within U.S Treasuries will have an affect on Forex. Lower yields than anticipated could signal a weaker USD. However, risk adverse elements will need to be calm for the bond auction to produce tranquil results.

Thursday, the 9th of November, China CPI and PPI – the data from these inflation reports will be watched closely. Chinese economic numbers has shown some signs of stabilization the past few weeks, both of these publications are expected to have negative outcomes. Concerns about the financial pressures domestic consumers are facing regarding housing market values in China and the way in which they spend due to lackluster prospects are concerning. The USD/CNY will be affected in the wake of these statistics, and the USD/SGD could see momentary volatility too if the results prove to be a surprise.

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GBP/USD One Month Chart as of the 5th of November 2023

Friday, the 10th of November, U.K Gross Domestic Product – last month’s number came in with an unexpected positive gain of 0.2%, this GDP report is anticipated to show no change. The GBP/USD jumped in value on Friday and financial institutions will be geared towards behavioral sentiment most of this week, but the British GDP data could cause a reaction before going into the weekend.

Friday, the 10th of November, U.S Preliminary Consumer Sentiment via the University of Michigan – the reading is expected to be slightly below last month’s outcome. U.S consumers remain a strong point of light for the U.S Federal Reserve. American consumers have remained spenders, although they have seemingly curtailed purchases of large ticket items such as cars and big appliances. If this data comes in weaker than expected it could propel more selling of the USD. A stronger number than anticipated could spook financial institutions and cause a slight surge in buying of the USD.

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AMT Top Ten Miscellaneous Shots for Friday the 3rd of Nov.

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Shots for Friday the 3rd of Nov.

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10. NBA: Welcome to Victor Wembanyama’s world. VW’s 5th game as a Spur was historic last night.

9. South Africa: The Springboks Rugby World Cup victory is helping unifying the nation and giving all its citizens a hope for better days.

8. Book: The Gulag Archipelago by Aleksandr I. Solzhenitsyn.

7. Crypto: Sam Bankman-Fried found guilty on all counts. Yet, Bitcoin is near 34,600.00 USD per coin.

6. Risks: Signs of appetite as U.S equity indices have moved higher, and U.S Treasury yields have declined.

5. Gold: The precious metal still lingering near 2000.00 USD and may attract bearish speculative positions.

4. Middle East: Global financial institutions appear to have dealt with the noise.

3. U.S Jobs Reports: Non-Farm Employment Change numbers and Average Hourly Earnings inflation data will be published today and shake markets.

2. Federal Reserve: The U.S central bank may have reached the end of it interest rates hikes cycle.

1. USD: The world’s reserve currency remains suspiciously strong and if it is a relatively calm today and this weekend, day traders may begin to embrace selling wagers.

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Ready for Risks as Nervous Markets Await Plenty of Outcomes

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Ready for Risks as Nervous Markets Await Plenty of Outcomes

So you want to be a trader. You imagine that it will be fun and possibly easy to make money from the comfort of a cafe, office, maybe a bus or subway train with a simple touch to an app on your phone that allows seamless possibilities to take advantage of trends that are easy to spot. Yet, this may not be the week to decide on beginning your endeavor, perhaps you will want to watch the global markets and learn from the possible mistakes of others in the coming days.

Simple trends for the moment have largely disappeared and financial markets face a rather important week of data and global risk events that not even the most experienced trader can comfortably embrace. Risk events will shadow this week of trading. There will be a lot of drums beating and earplugs are recommended for speculators.

To get started the war in the Middle East, actually the war between Israel and Hamas is ongoing and it will not end soon. Israel doesn’t want U.S ground troops and while some media sources may make these claims, it is extremely unlikely to happen. Yes, the U.S has sent war ships to the Mediterranean, but this is largely to suggest to Iran that the nation not become overtly active in the conflict.

Global investors who have been around the block and have traded when other conflicts have escalated – Ukraine, Iraq, Afghanistan, African wars, and simmering feuds between China and India are somewhat used to these news flows and developing crisis forays. It does not make things easier, but at the same time being able to separate the noise from the actual reality of these events is essential. Learning to be mindful of the media and its frequent empty hyperbole regarding what could happen next is vital. Traders need to be critical thinkers.

If a day trader can step away from concerns regarding conflicts and focus on how behavioral sentiment is going to develop via the gyrations of financial institutions and larger investors, they will go a long way in starting to pursue a more tranquil path and find the ability to organize their thoughts quietly.

Gold is flirting with the 2000.00 USD mark per ounce. U.S indices continue to trade near lows and risk adverse tendencies will likely continue to flourish in the near term. There is a parade of important data releases and rhetoric that will come this week. Traders who are technically driven should consider paying attention to the economic reports and pronouncements that will come as they mix with business outlooks and varying time frames that must be considered when making bets on the financial markets.

Most of Monday’s economic reports are in already. Australia posted better than expected Retail Sales. German Preliminary Gross Domestic Product statistics came in with a slightly better than anticipated number, although growth is still negative.

Tuesday, 31st of October, China Manufacturing PMI – economic data from China came in slightly better than expected the past week, but shadows lurk and the manufacturing numbers will help provide insights regarding headwinds the nation is facing. The USD/CNY remains at elevated levels. Transparency remains a desire for international investors who want to participate in China.

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USD/JPY Six Month Chart as of 30th October 2023

Tuesday, 31st of October, Bank of Japan – the BoJ is expected to make no changes to interest rate policy (you have heard this song before), but the USD/JPY remains near the 150.000 level and the Bank of Japan is not comfortable with this higher ratio. The question remains how they can combat this value properly. By suggesting the notion the BoJ can intervene when they want to, can keep financial institutions from over aggressively buying the USD/JPY. Expect to hear some of these intervention warnings again tomorrow.

Wednesday, 1st of November, U.S Federal Reserve Funds Rate and FOMC Statement – Jerome Powell made it pretty clear in mid-October the U.S Fed will likely not raise its interest rate at this meeting. However, he warned the potential exist to raise rates down the road if inflation shows unwanted sparks. American consumers are a reason for concern too, although the Fed will not admit this – the U.S Fed would like to see less consumer demand which they believe would help decrease inflation. Problematically, U.S Treasuries are not only sticking near higher yields because of the potential of higher interest rates, but they are also being bought as a safe haven because of Middle East worries. This will continue to put pressure on the U.S government because paying off bonds with higher yielding rates of returns to investors can become increasingly difficult, particularly when U.S government spending appears to be nearly out of control.

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GBP/USD Six Month Chart as of 30th October 2023

Thursday, 2nd of November, U.K BoE Official Bank Rate and Monetary Policy Summary – no changes are expected by the Bank of England. Perhaps like the ECB last week the Bank of England will try to ‘sound’ a sedate level of rhetoric and say they are monitoring economic conditions which remain rather lackluster, but are showing slight signs of improvement via inflation and potential growth. The GBP/USD continues to fight near lows and the 1.20000 level is likely an important juncture.

Friday, 3rd of November, U.S Non-Farm Employment Change and Average Hourly Earnings – the jobs numbers are expected to come in less than the previous month’s results. The wages report could be important if there is a significant change not corresponding with the estimate. Inflation needs to show signs of decreasing before the U.S Fed backs down from its aggressive interest rate stance, if the Average Hourly Earnings number remains stubborn, so will the U.S Fed.

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AMT Top Ten Miscellaneous Points for Friday the 27th of Oct.

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Points for Friday the 27th of Oct.

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10. Rugby World Cup: South Africa Springboks versus New Zealand All Blacks in a titan championship tomorrow.

9. Word of the Day: ‘Resilience’ as Israel’s business and start-up sectors remain focused and strong.

8. El Nino: Change to ocean currents still problematic, Acapulco hit by significant damage via Hurricane Otis.

7. Data: U.S Core Personal Consumption Expenditures Price Index could cause a reaction if the inflation numbers are higher than anticipated.

6. ECB: Pronouncements were consistent yesterday as Europe battles lackluster economy and elevated consumer costs.

5. U.S: Advance GDP results yesterday stronger than estimated, American consumers remain buyers.

4. Electric Vehicles: EV market showing fatigue as poor earnings from Tesla and other manufacturers confront investors due to ‘resource’ hurdles and as legitimacy of mass adaption is questioned.

3. USD: Trend and resistance levels under scrutiny from day traders and financial institutions as potential reversals are contemplated.

2. U.S Equity Indices: Dow Industrials, NASDAQ and S&P 500 now facing critical tests of late May 2023 support levels after yesterday’s selloff.

1. Behavioral Sentiment: Razor’s edge conditions in many assets are dangerous. Risk adverse elements are strong, timing a sustained shift of momentum is speculative.

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Optimism in Challenging Conditions and Time Considerations

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Optimism in Challenging Conditions and Time Considerations

Traders by nature are optimists, after all they are wagering on outcomes they believe are valid with targets regarding future results. Global market conditions for the moment have created expensive price action unfortunately, this as plenty of day traders wagering on their perceptions have found out while whipsaw movements and fast velocity have taken place and caused losses.

The USD continues to create turbulent higher values among many major currencies it is teamed against as financial institutions exhibit risk adverse tendencies. U.S Treasury yields may be going up because the U.S Federal Reserve continues to sound alarms regarding inflation, but the last two weeks of trading globally have seen an influx into U.S Treasuries as a safe haven move. Another signal that risk appetite is poor among global investors is because while the USD has gotten stronger, gold has also risen in value.

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Gold Five Year Chart as of 26th Oct. 2023

And importantly, global markets are trading in conditions which are not considered normal. Many inexperienced people within financial institutions have not dealt with markets like the ones being battled now. High interest rates combined with risk adverse conditions because of concerns regarding an escalation of war conditions in the Middle-East are causing a storm of volatility. U.S stock indices are trading at mid-term lows, and this may continue to be a theme over the next few weeks and beyond, but certainly there are those among us who look towards sunnier days.

So what does an optimist do if they are a day-trader? Perspective needs to be questioned at all times by speculators, and bias regarding all insights by individuals need to be given consideration. A trader must make sure they are not trading based on noise which is coming from the media and tainted with hyperbole. A trader must also question their personal instincts making sure they are free of preconceived notions. Behavioral sentiment gets affected from many angles when market noise becomes loud. Looking for a quiet place to think about market direction is vital for everyone.

Speculators need to remain calm and stick to risk management tactics that prove effective even during chaotic trading conditions. A variety of ways to be involved with the markets directly exists for all, Forex, equities and indices, commodities, bonds are only some of the avenues. Traders can go long or short on their chosen positions, they can participate in the ‘cash’ markets, but can also participate in futures and options trading via time related duration.

Famous investors are known for taking advantage of lower values when fear is high. They look for value via fundamentals within assets with long-term track records. It is not an accident the USD is strong, U.S Treasuries are being sought, gold is being bought currently.

Trends are there to be found and can be taken advantage of by day traders who are looking for quick hitting outcomes, but they must proceed carefully. Because it is also important to acknowledge that no matter how bad circumstances sometimes look in the short-term, that a positive quality among we as humans is to seek optimism. There are reasons to participate in trades with a perspective knowing more tranquil days will come and the markets will grow calm again, markets can reverse and suddenly display risk appetite.

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Fed Rhetoric, U.S Consumers, and Fresh Concerns about China

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Fed Rhetoric, U.S Consumers, and Fresh Concerns about China

U.S inflation data via the Consumer Price Index last Thursday met the anticipated result regarding the core number, and the broad statistics were only fractionally larger than expected. U.S Treasuries yields however jumped via quick reactions about stubborn inflation, then settled down. Equities via the major indices continue to show nervousness.

Day traders continue to get hit by choppiness, which means if they are not on the correct side of a trade initially, they can get knocked out of their positions quickly due to the use of too much leverage.

China produced another round of troublesome Consumer Price Index Producer Price Index reports last Friday, once again highlighting deflation is a legitimate concern for the nation.

The USD began to weaken within many major currency pairs on late Tuesday and early Wednesday, and then began to prove difficult with sideways price action. However, many currencies held onto their slight gains against the USD going into the weekend. But before a massive bearish trend against the USD actually can be sustained, perceptions about the U.S Federal Reserve stands clearly in the way regarding behavioral sentiment.

Inflation numbers last week remained strong enough to suspect the Fed will raise interest rates again on the 1st of November. As a way to keep traders on their toes, U.S Federal Reserve officials will be speaking at many functions over the entirety of this week, offering crumbles of evidence for their less than spectacular rhetoric on the global economy no doubt.

Gold has produced a rather startling climb in the past ten days and its one month charts resemble a rather turbulent roller coaster. Traders who have been pursuing the precious metal during its strong reversals the past handful of weeks have hopefully been using solid risk management while taking a speculative ride.

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Gold One Month Chart as of 16th of October

Monday, the 16th of October, U.S Empire State Manufacturing Index – the number has come in slightly better than expected, but has still produced a negative reading of minus -4.6. While many U.S officials will not state it publicly, a decline in the manufacturing index may pave the way towards a more tranquil Federal Reserve. But this may be wishful thinking too, particularly if inflation remains elevated.

Tuesday, the 17th of October, U.S Retail Sales – the data about consumer spending will affect Forex if there are surprises. Both the core and broad reports are anticipated to be weaker than last month’s numbers. Weaker results could create some USD weakness.

Wednesday, the 18th of October, China Industrial Production, Gross Domestic Product and Retail Sales – the Industrial Production results are expected to be slightly weaker than last months, while the GDP outcome is being estimated to show a significant drop. If the growth number comes in at the anticipated 4.5% mark it would be another signal that China is struggling while trying to jump start the economy. USD/CNY traders should be careful around these reports.

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GBP/USD Six Month Chart as of 16th October

Wednesday, the 18th of October, U.K Consumer Price Index – the CPI data from Great Britain is expected to show a slight decline from the previous month. While last week’s GDP numbers met their rather lackluster expectations; Construction, Manufacturing, Trade Balance data came in much worse than anticipated. While no one from the U.K government is going to cheer on the bad economic numbers from last week, these figures will make these CPI inflation results important to monitor. Will the U.K inflation numbers remain stubborn like the U.S? The GBP/USD certainly needs to be watched in the aftermath of this CPI report.

Thursday, the 19th of October, China New Home Prices – the housing bubble within China is a thing of the past. Last month’s outcome produced another negative number and a poor report would not be a surprise this week. Negative housing values hurt the Chinese public which have largely quantified their personal savings via their real estate holdings.

Thursday, the 19th of October, U.S Unemployment Claims – the weekly report will give another small dose of evidence regarding the strength of the U.S economy for financial institutions to consider.

Friday, the 20th of October, U.K Retail Sales – the consumer spending report is expected to produce a decline of minus -0.3%. GBP/USD traders may use this report as another sphere of influence.

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AMT Top Ten Miscellaneous Niblets for Friday 6th of October

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Niblets for Friday 6th of October

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10. World Cups: Big weekend ahead in Rugby and Cricket international competitions.

9. Book: Darkness at Noon by Arthur Koestler.

8. Travel Tip: The Western Cape of South Africa.

7. Inflation: Dramatic increases in costs of food globally causing nutrition concerns.

6. Jobs: U.S Non-Farm Employment Change data on the calendar.

5. Music: “In a Sentimental Mood” by Duke Ellington and John Coltrane.

4. Gold: Precious metal still languishing as USD remains strong amidst nervousness.

3. Salaries: U.S Average Hourly Earnings statistics results today will be a catalyst.

2. USD: Major currencies still weak as strength of USD causes duress.

1. U.S Indices: Equities behavioral sentiment appears fragile in stock markets.

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Nervous Outlooks and Short Term Fixes Creating Anxiousness

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Nervous Outlooks and Short Term Fixes Creating Anxiousness

A U.S government shutdown has been avoided, but the resolution highlights that an important year of political games is getting fully underway in Washington. Short term fixes via congressional agreements do not hide the fact the U.S government continues to bleed money and is adding to its deficit as yields on U.S Treasuries remain high.

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Gold Five Day Chart as of 2nd October 2023

The price of gold has sank substantially in the past week, which shows the USD continues to be strong, and that speculative short-term games within the precious metal must always be kept in mind by day traders. Long term fundamental beliefs regarding the value of gold cannot stop momentary volatility.

GDP results from the U.S last week came in slightly below estimates, but the ability to still sustain growth also creates the suspicion the U.S economy remains stubbornly strong, which effectively puts the U.S Federal Reserve in a rather difficult place. Crude Oil prices have remained high, and this week’s coming jobs data will be important for short and mid-term market participants as they position themselves while nervous behavioral sentiment continues to be evident.

U.S stock markets are near three month lows and trading conditions choppy, this as yields on U.S Treasuries are elevated and create a tough road for speculators to navigate in the short-term.

Monday, 2nd of October, U.S ISM Manufacturing PMI – a reading below 50 is anticipated which would mean sentiment remains negative regarding the U.S economy, but Core Durable Goods Orders came in better than expected last week. Thus, the result of this manufacturing report could play into short and near-term USD trading and cause a ripple as financial houses anticipate the jobs numbers later this week.

Tuesday, 3rd of October, Reserve Bank of Australia – the RBA is expected to keep its Cash Rate in place. If the RBA cooperates with financial institutions and does not change its key borrowing rate , the RBA Rate Statement will come into focus. However, the AUD/USD is still within the shadows of U.S Federal Reserve like most other major currencies.

Wednesday, 4th of October, U.S ISM Services PMI – the outcome from the Services report is expected to fall below last month’s outcome. The slight miss in the GDP numbers last week was noteworthy, but the better than expected Core Durable Goods results will make this report of interest and provide a bit of impetus to the USD and U.S indices before Friday’s key jobs data – particularly if the Services reading is better than anticipated.

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GBP/USD Three Month Chart as of 2nd Oct. 2023

Thursday, 5th of October, U.K Construction PMI – while not considered a major publication by many analysts, the ordering by purchasing managers in Britain may prove relevant as an indicator regarding outlook. The Bank of England held their interest rates in place a couple of weeks ago and this was based on the belief the U.K economy is slowing. The Construction PMI report is expected to come in slightly below last month’s outcome which could set the table for slight choppiness in the GBP/USD which has continued to trend lower.

Friday, 6th of October, U.S Non-Farm Employment Change and Average Hourly Earnings – the combination of these two reports will impact USD trading before their publication and afterwards for several hours. Financial institutions will examine these statistics carefully. If there is a hint of weakness in the U.S jobs market and wage inflation is tame, this could make the USD weaker. However, if jobs hiring remains firm and there is a slight uptick in the costs employers are having to pay workers, the USD could get stronger.

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Concerns Ahead and a Potentially Noisy Week for Day Traders

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Concerns Ahead and a Potentially Noisy Week for Day Traders

In the wake of last week’s central banks follies, day traders have what may appear on the surface a rather comfortable week of economic data to consider as they make their wagers. However, there are outside risk events looming which will likely stir the emotions and positions of financial institutions, and cause knock on tremors that speculators feel caused by a noisy storm of experts and media pundits.

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SP 500 Index Three Month Chart as of 25th of Sept. 2023

U.S equity indices have struggled recently and this should be viewed as a barometer of current behavioral sentiment. Concerns regarding higher Crude Oil prices, and talk of a growing U.S political crisis as a government shutdown is threatened (remember next year’s election is shadowing all spectacles in Washington D.C presently) highlight the nervous state of affairs. The USD has been stronger and gold has remained under pressure in recent trading. Risk adverse trading is proving rather flavorful for the moment.

The ongoing strong rhetoric from the U.S Federal Reserve and what appears to be an almost certain interest rate hike in November is causing market sentiment to remain anxious. Financial institutions are not only lining up to buy U.S Treasuries, but money market funds are also being sought too which offer the ability to accumulate returns from higher interest rates. While cash is being parked in ‘sure things’ because financial institutions and large investors are keen on locking in ‘known’ returns (profits), this creates potentially less money supply for buying of U.S and global equities momentarily.

Troubling economic data continues to mire the terrain also for financial institutions, and the heightened fear is causing a reaction which day traders need to deal with as short-term volatility mounts creating dangerous speculative conditions. Consumers face a rather large bag of ‘troubles’ via higher mortgages, debt obligations on credit cards and student loans, and inflation costs. Yet, intriguingly the U.S economy has shown resilience which is almost perplexing.

Current behavioral sentiment appears fragile and ready to crack open into a chaotic storm if too much pressure is exerted. Day traders should be cautious this week because plenty of diatribes and warnings are sure to be heard. Unfortunately the warnings being heard now for this coming week could prove correct.

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EUR/USD Six Month Chart as of 25th Sept. 2023

Monday, 25th September, Germany Business Climate via Ifo – investors will keep their eyes on the sentiment reading from Germany which is expected to be worse than last month’s results. The EUR/USD is trading at six month lows.

Tuesday, 26th September, U.S CB Consumer Confidence – the result is anticipated to be slightly negative compared to last month’s outcome. U.S consumers have remained strong and financial institutions will want to see if they remain optimistic regarding their outlooks. The outcome could affect the USD, particularly if the number is weaker than expected.

Wednesday, 27th September, U.S Durable Goods Orders – this report could prove noteworthy via the broad and core reports. Durable Goods Orders are a relatively important barometer on U.S big ticket spending and demand. The numbers are likely to cause a rumble in U.S equity markets.

Thursday, 28th September, Germany CPI – the inflation results will be watched carefully by EUR/USD speculators. Higher prices in Germany are not welcome and a larger number than anticipated would be troubling.

Thursday, 28th September, U.S GDP – the Gross Domestic Product data from the States on Thursday will be closely monitored and likely provide impetus for Forex and major indices. If the growth numbers are stronger than expected this will serve as another nail for the U.S Federal Reserve to hit when it makes its case for another interest rate hike. While it is good the U.S economic growth numbers have been relatively strong, better than expected data could play into U.S Treasury yields remaining high and spark additional complex considerations for investors.

Friday, 29th September, Canada GDP – the data from Canada is expecting a negative ‘growth’ result which would have an affect on the USD/CAD.

Friday, 29th September, U.S University of Michigan Consumer Sentiment – the revised numbers will give insights into American spending habits. The previous two months have been more lower than anticipated, this outcome is expected to produce a reading of 67.7.

Saturday, 30th September, China Manufacturing PMI – while the Purchasing Managers Index reports from China are forecast to show slight improvements, analysts remain worried about economic conditions in the nation. Transparency remains a focal point for investors who want to make sure the results they are being given are accurate.

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Wednesday Federal Reserve Prediction and Central Bank Unity

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Wednesday Federal Reserve Prediction and Central Bank Unity

Later today the Federal Reserve will release its Federal Funds Rate and FOMC Statement. Jerome Powell will also field questions. My prediction regarding the Fed today is that the Federal Reserve will hold (pause). It will say inflation remains problematic and stubborn, and the Fed continues to monitor economic conditions it finds complex. The high costs of energy (Crude Oil) will be presented as part of the problem.

The Fed will say they will strongly consider an interest rate hike next month, thus bracing the markets for what financial institutions have already traded into the system. This because trading houses have listened to the Fed already and believed that a pause would be seen for a few months, but cracks in sentiment quickly appeared in mid-July because of the Fed’s cloudy rhetoric as it spoke out of both sides of its mouth. Ratings downgrades and worries began, the USD sprung to significant values, higher U.S Treasury yields have flourished and increased fears for the long-term investment world. All the noise has certainly helped doomsayers.

The problem for the Fed and they should be aware of this, is that their interest rate hike threats have little direct affect on the price of Crude Oil. The rise in oil prices is directly due to Saudi Arabia cutting back on production. The U.S has much less influence on Saudi Arabia then it would like to believe it does. The Saudi Arabia government is interested in sustaining a profitable price for the commodity. At 90.00 USD per barrel, Saudi Arabia is making significant profit, but under 80.00 USD per barrel they grow concerned. After all someone has to pay for the ‘Line’ project of Neom.

Getting back on point, if the Fed is so intent on raising rates they should do so now. Not next month. But as the Federal Reserve and other major central banks often demonstrate, they are reactive – not proactive. Meaning if the Fed has no direct influence on the high price of energy that they should go ahead now and influence the marketplace instead of rattling a sword which only creates nervous global behavioral sentiment.

And yes, a hike of the Federal Funds Rate would be problematic for credit and cash reserves of consumers and businesses, which face more expensive obligations regarding loans and bonds. However, if you are merely going to threaten to do something, why not do it now and say without a doubt – like the ECB did last week – this will be our last hike for the foreseeable future. But the Fed is likely to prove they have limited desire to act swiftly and try to remain painfully polite, very much like when they refused to acknowledge inflation was a real threat when it started in earnest over two years ago.

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GBP/USD One Month Chart as of 20th Sept. 2023

Lastly, the Bank of England will make their pronouncements tomorrow, and some are suggesting the BoE because of today’s ‘weaker’ inflation results will not raise the Official Bank Rate. However, I disagree, inflation is still high in the U.K and the Bank of England may also feel it has to protect GBP value.

Last week’s interest rate hike from the European Central Bank, which I didn’t believe would happen and was wrong about, suggests the BoE and ECB may have privy knowledge regarding the Fed’s inner thinking. It is quite possible the European’s raised rates last week not only to fight inflation, but because they had been warned by the Federal Reserve that the U.S central bank wants to ‘sound’ aggressive. There is reason to believe if the Fed doesn’t raise tonight, but groans on about a complex economy and stubborn inflation and the need to consider raising rates next month, the BoE will feel very compelled to still hike the Official Bank Rate by a quarter of a point tomorrow.

Nothing quite like coordinated banter between the major central banks which have already demonstrated a rather stark level of mistakes over the past two years. Why not add onto the shenanigans today and tomorrow? Good luck to us all.

postN54.2

Last Week Caught Many by Surprise, as Fed Looms Wednesday

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Last Week Caught Many by Surprise, as Fed Looms Wednesday

The ECB obviously decided to highlight how seriously they want to fight inflation last Thursday, when they increased their Main Refinancing Rate by a quarter of a point. The move was not only a surprise to many financial institutions, but displayed a large ‘miss’ by most analysts. While some point out the European Central Bank is powered by Germany who have a historically bad memory regarding inflation, it would also be correct to acknowledge the ECB is trying to protect their own currency against the potential volatility the Federal Reserve could cause with a rather aggressive monetary policy stance this coming Wednesday.

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WTI Crude Oil One Month Chart as 18th Sept. 2023

Another broad market influence as this week begins remains the high price of Crude Oil which has now surpassed 90.00 USD per barrel. The higher energy price will certainly not calm inflation anxiousness. Higher energy costs equate into costlier logistics, manufacturing, and agricultural production – this is not a problem central banks wished upon their plates as the final quarter of 2023 gets set to start in a couple of weeks.

Monday, 18th of September, Canada Housing Starts – the housing market in Canada is important to its economy and the nation has enjoyed a housing price bubble for a couple of decades. The past two months have produced higher than expected Housing Starts numbers which is intriguing because Canada is suffering from lackluster growth. The USD/CAD could move slightly on this result, but unless there is a profoundly surprising number from this report, the currency pair will remain focused on ‘other’ things to come.

Tuesday, 19th of September, Canada Consumer Price Index – last week’s CPI and PPI numbers from the U.S came in stronger than anticipated, and Canada’s projected estimates for Tuesday’s results nearly match the nation’s total from last month. Leaving the suspicious notion that inflation could possibly come in stronger in Canada like it did in the U.S last week since these two economies often mirror each other.

Wednesday, 20th of September, China One and Five Year Loan Prime Rates – China continues to be watched closely as investors point out potential dark shadows creating headwinds for the nation economically. The results regarding the loans taken by household and businesses are a solid barometer for outlook if the data is transparent.

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GBP/USD 3 Months Chart as of 18th Sept. 2023

Wednesday, 20th of September, U.K Consumer Price Index – the anticipated numbers expects an inflation result of 7.1%, which would be remarkably high and not treated kindly. The results will create havoc in the GBP/USD because not only is the Fed is waiting literally in the wings after this report, but the BoE is going to respond on Thursday.

Wednesday, 20th of September, U.S Federal Reserve Funds Rate – one week ago this day didn’t look like it would cause that much excitement. This all changed last Thursday when the ECB raised its borrowing costs and put financial institutions into a full state of alarm. Yes, the ECB may have acted on its own, but some suspect they know what the Fed is planning on doing already. The Fed is not expected to raise interest rates, but they will certainly sound aggressive and point out inflation remains a danger. Here’s the thing, the ECB sounded quite confident last Thursday, that it will not raise its interest rates again in the mid-term, essentially saying they were done. Did the ECB base this on knowledge that the Fed could do the same thing? What was perceived as a potentially sleepy and quiet Fed meeting and FOMC Statement has now taken on major importance. Forex, U.S Treasuries and global equities will move based on the Federal Reserve’s action and rhetoric. How will the Fed react to higher inflation data?

Thursday, 21st of September, U.K Bank of England Official Bank Rate – the BoE is widely expected to raise the borrowing rate by a quarter of a point. If the Fed did not raise rates the day before and the BoE acts as expected, this could in theory help the GBP/USD gain. However, it should be pointed out following the ECB’s interest rate hike last week, the EUR/USD traded into this past weekend weaker.

Friday, 22nd of September, E.U, U.K and U.S Services and Manufacturers PMI – Europe, Great Britain and the U.S will all release this data on Friday and all expect rather lackluster results. While this data is important, the broad financial markets will likely still be reacting to the actions of the major central banks and the credit crunch problems they are causing globally for consumers and businesses who are facing cash shortfalls and costlier loan expenditures.

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Risks: Short Term Market Chaos and Long Term Viewpoints

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Risks: Short Term Market Chaos and Long Term Viewpoints

Today I got the date wrong, I thought it was Friday the 9th of September, turns out that I caught the error and managed to hide some of the wrong usage. In another calendar gone wrong saga, a couple of years ago I believed there would be a 31st of April on a following day.

I couldn’t understand why my significant other was giving me an odd look when I asked her several times to confirm an event we were scheduled to attend that Sunday, which turned out to be the 1st of May. She thought I was playing a late April Fools’ Day joke, but no I simply did not know there wasn’t a 31st of April. I learned to accept I was wrong.

I don’t know everything. This summer has produced wicked results in Forex and the affects have been hard to swallow for many speculators. The strength of the USD has been steadfast in many cases. The upwards path of U.S Treasury yields have certainly shadowed the markets. The slight downhill slope of U.S stock indices this week has added some loud chatter, this as media pundits clamor for the next apocalypse to gain ratings.

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USD/INR Three Months Chart as of 8th Sept. 2023

I do not know what will happen today in the stock markets or next week. I also do not know what will happen at the G20 this weekend in India, except I will bet Joe Biden makes an error to two regarding context as he speaks. The broad financial markets are showing signs of nervousness certainly, but it is hard to time when there will be an optimistic turnaround or a bone crushing downturn, or if things will simply remain unclear over the mid-term.

Risk analysis is a bit like forecasting the weather, most of the time you can look up at the sky and and tell what the next 12 and hopefully 24 hours will bring. Within the trading world you can often tell by volumes and price velocity if a potential storm is building. I certainly do not want to be someone known as a scaremonger. I prefer to warn and remind traders to use entry points, stop losses, take profits, and to know how to navigate potential ill winds, while searching for smooth sailing.

The trend in the USD has been strong and while I tend to believe that a ‘downturn’ is due, the ability of the ‘greenback’ to continue adding value in Forex cannot be denied. The drop in value of the EUR and GBP the past month and a half is not only interesting, but creates the gut instinct that something is ‘not right’ in the markets. Yes, I can take a look at U.S Treasuries and try to correlate all results to the higher yields, and economic data, but it feels like something else is amiss. I see ‘oversold’ and ‘overbought’ signals aplenty, but the market prices are real, even if my sentiment tells me something is wrong, and until the markets reverse I have to remain cautious regarding my outlooks.

Short-term market outlook looks chaotic . Nervous results continue to filter into view. During these type of conditions I prefer to trust my long-term vision. One insight that has grown on me in the past year is that I am ‘long’ India. I believe the development and progress we are witnessing within India is important and that the nation will continue to make great strides if it remains stable and democratic. Understanding short-term conditions are rough and need to be dealt with carefully is crucial, and having a long-term plan to work towards provides a solid path to improve.