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Forex and Political Sentiment Moving the South African Rand

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Forex and Political Sentiment Moving the South African Rand

Recent trading in the USD/ZAR has become bearish and highlights the behavioral sentiment shifts taking place within South Africa, this as outlooks and perspectives create opportunities for financial institutions and speculators.

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USD/ZAR One Month Chart as of 20th June 2024

South Africa politics have generated optimistic selling of the USD/ZAR in the past week and a half as the ANC has agreed to a National Unity Government coalition. Financial institutions pulled the USD/ZAR higher and to the 19.00000 realm in the second week of June as concerns grew the African National Congress could decide on a hard-left coalition in the nervous days following the election results. But those fears disappeared when it became clear the ANC would actually undertake a working association with the Democratic Alliance. The USD/ZAR began to selloff. Yesterday’s ability to test values below the 18.00000 level highlight the price velocity that optimistic outlooks have generated the past handful of trading days. Not all of South Africa’s problems are going to vanish magically, but there is a hope that better days are ahead.

As simplistic as it sounds, financial institutions trade based on their outlooks and they take an approach with much longer timeframe considerations compared to day traders. In a sense the price of the USD/ZAR isn’t a reflection of what is, it is a mirror of what can be. The trend lower will now run into a test as financial institutions question the move lower that has been attained the past week and a half, compared to realities which still have to be handled per the existing problems that remain. The African National Congress and Democratic Alliance aren’t natural bedfellows. They will certainly clash regarding fiscal transparency, day to day power sharing as the nation and municipalities are managed, and geopolitical alliances will be questioned.

While the USD/ZAR has definitively traded lower and is testing intriguing support, optimistic sellers who have a mid-term outlook will look at one year charts and know the currency pair has traded at significantly lower values in July of 2023. Day traders should not get overly ambitious, because it will be nearly impossible for most short-term speculators to hold onto a position longer than a day or two because of transaction fees most trading platforms charge for overnight positions. However, the notion that financial institutions will look at the lower values seen technically about eleven months ago, and consider the potential of ‘what can be’ might start to affect the USD/ZAR more over the coming weeks and months.

There are warning signs that need to be monitored, there is already talk among media outlets in South Africa that the ANC and DA are in disagreement regarding the working relationship they share and what type of influence will be allowed from the junior partners – which includes the Democratic Alliance and at least four other smaller political parties. Nothing is for free in politics. Power and the ability to govern will need pragmatic approaches by all members of the National Unity Government in order for it to remain viable. The coming days and weeks are sure to create headlines which will make financial institutions occasionally nervous and create support levels which sometimes look very durable.

Perhaps the best barometer for short-term traders of the USD/ZAR will be resistance technically which is tested in the coming days. The USD/ZAR is trading near the 18.14200 ratio as of this writing. U.S traders will be returning from their holiday celebrations yesterday and increase Forex volumes which could cause uneasy reversals. However, if the 18.20000 level proves to be durable resistance near-term, it may signal financial institutions may believe additional positive impetus will create more selling. Behavioral sentiment will remain nervous in South Africa, but if optimistic outlooks remain the USD/ZAR could move lower again. The search for equilibrium in the USD/ZAR is not over and the coming weeks will be worth watching.

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AMT Top Ten Miscellaneous Complexities for the 14th of June

by with No Comment Behavioral SentimentCentral BanksFeatured Highlights

AMT Top Ten Miscellaneous Complexities for the 14th of June

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10. International Tech Research: Universities and institutions around the world are developing innovative systems to deliver a quantum future. Cal-Berkeley, MIT, Cambridge, the Barcelona Supercomputing Center, the Institut Polytechnique de Paris, and the Cleveland Clinic are only a few of the places in the ‘West’ that investors should monitor for developments, Asia is also very focused on high speed computing.

9. Musk Schedule: The tech mogul has had a busy week. His Tesla stock option compensation package was approved by shareholders yesterday. In 2018 Musk negotiated a package with Tesla that included a massive compensation agreement via stock options if he met valuation targets over a 10 year period. He achieved the valuation goals within only a few years. Musk also formally dropped his lawsuit against OpenAI and Sam Altman in recent days, this after the enterprise released emails showing Musk backed OpenAI’s pursuit of profits in the past. Around 2015 Musk invested about 45 million USD into OpenAI.

8. Muted Data: The U.S Consumer Sentiment and Inflation Expectations numbers will be released today via the University of Michigan. However these numbers are likely not going to impact financial assets in the U.S. The Fed and CPI results from the States published this past Wednesday will dominate the investing narrative. Searching for meaning regarding why assets move in a particular direction is the media’s job, but perceived realities always remain open to complex interpretations as real time prices are exhibited. Day traders need to be cautious of revisionist history.

7. Petrol Dollar: Saudi Arabia has not reconfirmed its commitment to transact Crude Oil exports with USD. The formal agreement reached in 1974 has expired. Forex traders should not panic about this development yet. Speculators should note that Saudi Arabia is likely to still demand most of their payments in USD since they can count on the valuation of the currency to remain relatively tranquil compared to other instruments like China’s Yuan. What the absence of an agreement between the U.S and Saudi Arabia does indicate unfortunately, is that U.S foreign policy continues to look vulnerable.

6. Optimism: A South Africa government coalition agreement could be formalized soon and create a better economic outlook for the nation. While geo-political concerns remain, and the ANC is not a 100% friendly philosophical match with the Democratic Alliance and some of the other political parties which will be involved, it appears a working agreement can be reached. The question in South Africa is if transparent fiscal and anti-corruption mandates can be accomplished while diverse political outlooks will be heard and demanded from different factions. For the moment, financial institutions seem to like what they are hearing and the USD/ZAR has edged lower in the past week.

5. Highly Valued: Gold is over 2300.00, BTC/USD is near 67,000, and Cocoa is within sight of 11,000. Speculative large players remain active, and traders looking to take advantage of short and near-term fluctuations in these commodities need to remain vigilant. Cocoa, while extremely dangerous to trade, has outperformed gold and Bitcoin recently. Investors in gold think long-term, and Bitcoin influencers preach ‘hold on for dear life’ as non-believers shake their heads in disagreement. However, daily gyrations influenced by large players can still wreck havoc on those looking for short-term wagering opportunities.

4. Zombie Fed: Cautiously optimistic undertones were served from Jerome Powell as expected this past Wednesday, but intriguingly Powell admitted some government data remains open for interpretation, particularly the suspiciously strong headline jobs numbers which are being questioned. The Fed now says its outlook is for one interest rate cut this year. Financial institutions likely believe the Fed remains too reactive. The U.S GDP has shown signs of struggling, and CPI numbers have begun to erode. Crude Oil prices remain under 80.00 USD. However, the Fed seems intent on still pumping the brakes in order to kill off inflation via the high Federal Funds Rate. It would help if the U.S govt stopped spending cash recklessly, and the U.S Treasury stopped printing money.

3. Equities: U.S political concerns as the election approaches will create more analysis paralysis than normal. Short-term behavioral sentiment may sound nervous, but a bullish trend and risk appetite remain evident. Day traders may be able to take advantage of technical trading via support and resistance in CFDs, but fundamentally financial institutions appear inclined to count on equity indices achieving record highs.

2. 157.000 – 158.000: Today’s BoJ decision to remain stuck in the mud has created more financial institutional dismay in some quarters, and the the Japanese Yen will be punished occasionally against the USD. But the folks at the BoJ are not stupid and likely anticipated the USD/JPY move higher which ensued. The BoJ is obviously preserving its ‘soft devaluation’ of the JPY in order to maintain an export advantage for the U.S and European consumer markets. The question is if and when the BoJ will buy billions worth of JPY in order to punish bullish USD/JPY Forex speculators occasionally.

1. Volatile Near-Term: EUR/USD and GBP/USD price action has been boiling. France and the U.K have crucial elections in the coming weeks, after policies in both nations have led to a lack of confidence in the ruling governments. The ruckus outcome from the E.U Parliament voting have created an intriguing complication. Oddly enough, the U.K may be the left’s torch bearer in the coming year, while other European nations drift towards the right. Can centrists create a middle ground? Volatility and the search for equilibrium via financial institutions may create a lot of opportunities for Forex day traders in the coming weeks in the EUR/USD and GBP/USD as reversals and trends are sought.

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AMT Top Ten Miscellaneous Politicos for the 7th of June 2024

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Politicos for the 7th of June 2024

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10. Three P’s: Pragmatic and populist politicians are clashing in a world that seeks to try and sell utopian visions from all sides, instead of admitting realities that should be understood and defined, thus creating a more dangerous world. It would be funny if it weren’t so serious.

9. Investment: Pasqal, a quantum tech company located in France founded in 2019, and IBM have announced a collaboration to integrate efforts on creating quantum centric supercomputing architecture. The quest for fully functioning applications appears to be years away as theories such as neutral atoms are studied and applied, and cooling systems are pressed to their limits. However, a transition into working research continues to build momentum. Accelerated investment paths for those seeking the quantum golden goose are flourishing.

8. Three C’s: Cocoa, Coffee and Copper are creating speculative storms for traders as volatility has seen apex values, then dramatic drops, followed by violent reversals higher in the commodities. Cocoa is back above 10,100 USD per metric ton as of this writing, and Coffee Arabica and Copper have been delivering huge profits and staggering losses for large players and day traders who continue to wager.

7. India: Narendra Modi has retained power after a hard fought voting outcome has diminished some of his power. However, fears that turned the Nifty 50 index sharply lower earlier this week, also created a market discount for long-term investors. Foreign investors continue to have a positive economic outlook for the nation. It will not be a surprise to see the Nifty 50 back to pre-election levels and challenging record highs soon, yet again delivering a lesson for day traders who are speculating on the short-term instead of being patient.

6. South Africa: Coalition government discussions are ongoing and will grow in noise in the coming days as a deadline to conclude an agreement approaches. The ANC is said to be talking seriously with the Democratic Alliance, but the Congress of South African Trade Unions which is strongly aligned with the ANC is against the move. It has recently been reported that South Africa’s ports are among the least dependable in the world by the Container Port Performance Index. Poor infrastructure, corruption and a lack of transparency are hurting South Africa. The ANC decision in the coming week regarding a coalition is vitally important. Either it will decide to make concessions and bring the DA in as a working government partner and hopefully build a bridge towards a better South Africa, or the ANC will decide on a hard-left coalition which could potentially bring it to a Venezuela or Zimbabwe type of outcome. The USD/ZAR will react.

5. Conservatives: The U.K election is less than one month a way, and Labour appears set to take power and control Parliament with a large majority. The failure of the Tories to create the perception of successful economic, foreign, and social polices that resonated with the public, appears to be easing the way for a ruling Labour government which has not been seen since since 2010.

4. Carry Trade: The EUR/USD will become an interesting test ground for carry trade fundamentals in the coming weeks and months. The ECB cut its Main Refinancing Rate as anticipated yesterday by 0.25%, but said it is neutral about more cuts. The ECB explained it was able to cut interest rates yesterday, because current inflation levels have dropped enough that a modification of interest rates was needed, but that it remains cautious about inflation in the future. This statement and policy could potentially allow for the Federal Reserve to become the more dovish central bank over the mid-term and lead to a stronger EUR/USD. How much will financial institutions wager on this notion in the near-term?

3. USD/JPY: Serenity now should be the new mantra for the BoJ. The Bank of Japan seems to be waiting on the Fed to sound more dovish, which could stop the need for the BoJ to intervene again. The USD/JPY remains high and is currently testing the 155.000 to 156.000 range in a fairly steady manner. The Bank of Japan will release its Monetary Policy Statement on the 14th of June. While Forex tranquility has been demonstrated the past couple of days, conditions may change rapidly later today and day traders should brace for price velocity.

2. U.S Indices: Equity values have recovered in the Nasdaq and S&P indices, and while the Dow 30 is below apex highs it is still within sight of the 40,000 level touched on the 20th of May. Treasury yields have traded slightly lower this week which has ignited risk appetite again. Gold is trading below the 2,400.00 USD ratio, but still comfortably above 2,300.00 for the moment. If Treasury yields continue to experience a downturn, institutional investors are likely to funnel cash into the stock market.

1. Data: U.S jobs numbers via the Non-Farm Employment Change and Average Hourly Earnings figures will be published today. The result will certainly set the path for the Federal Reserve’s June 12th FOMC meeting. Yesterday’s weekly Unemployment Claims came in weaker (more claims filed) than expected and other jobs data was weaker the past few days via JOLTS and the ADP statistics. All financial assets will react to the U.S data today. Weaker jobs numbers would create more confidence among institutional investors that the Fed will have to sound dovish rhetoric regarding potential cuts to the Federal Funds Rate in the coming months. Fast trading conditions are coming today.

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USD/ZAR and EUR/USD as South Africa and ECB Create FX Shadows

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

USD/ZAR and EUR/USD as South Africa and ECB Create FX Shadows

Risks for day traders will abound this week in Forex. Taking advantage of trends in the days to come will rely on interpretations of behavioral sentiment, which may become rather reactionary from financial institutions if they feel existing positions are vulnerable. For the moment there is calm but day traders should not expect this to last.

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USD/ZAR Three Month Chart on the 3rd of June 2024

The results from the South Africa election have delivered the need for a government coalition. The USD/ZAR will certainly move according to degrees of nervousness being generated in South Africa. While the African National Congress has publicly called for unity and openness to achieve a working government, there are legitimate fears the ANC may consider a left wing coalition known as the Doomsday approach, which could include political parties that are not seen as being pro-business or inclusive for the entire population. Financial institutions in South Africa and abroad will have their trust of the ANC tested in the days ahead.

South Africa political concerns may cause the USD/ZAR to step out of line and not correlate to the broad Forex market. The ANC has two working weeks to reach a coalition deal. The ANC has never been in such a weak position before, and if the ANC makes a political deal which is interpreted as being against free enterprise it will not be welcomed by many businesses. Will the ANC be able to admit a new path can be followed in South Africa that creates a space for more transparency regarding fiscal policy and oversight, or will the ANC become stubborn and make a deal with a political party that moves the nation backwards economically and causes more strain via geopolitics?

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EUR/USD Three Month Chart on the 3rd of June 2024

From Europe, the ECB will step into the spotlight this coming Thursday. Following last week’s lower than expected Consumer Price Index data from Germany, the ECB is widely anticipated to cut its Main Refinancing Rate by 0.25%. Day traders need to be aware of this, because on Thursday if and when the ECB does cut the interest rate, the reaction in the EUR/USD may not move the market as much as small retail speculators anticipate.

Instead the volatile reaction could come from the inspection and understanding of the published Monetary Policy Statement, and the Press Conference which will follow half an hour later. The EUR/USD it should be noted jumped higher last Wednesday on the weaker than expected inflation report from Germany, which may mean some of the EUR/USD bullishness has already been bought into the currency pair.

The thought that the ECB has seemingly stood in the shadow of the Fed for the past year and largely reacted only after the U.S central bank is important. If the ECB actually goes out on a limb and cuts its interest rate this week, and says it is considering another later this summer it will cause a reaction. The differentiation between the Main Refinancing Rate from the ECB and the Fed’s Federal Fund Rate will cause momentary headaches too.

However, this might ignite thinking within financial institutions that the Fed has given the ECB a quiet ‘green light’ and assured the ECB that the Federal Reserve will become dovish over the mid-term. However, the Fed is not expected to cut the Federal Funds Rate next week. What should happen is that the Fed delivers a December 2023 repeat performance on the 12th of June, in which it expresses a rather dovish perspective – but this time delivers, but there are no guarantees.

The U.S jobs numbers this Friday will play into the EUR/USD sentiment too and all other Forex pairs. Importantly, traders do not want to see a retraction from the Fed again in the coming months and cautious talk about inflation. While higher prices may be the reality for the moment, financial institutions appear to be hoping on proactive actions from the ECB and Fed combined. If dovish rhetoric isn’t seen Forex choppiness will become intense again.

Political rhetoric and its influence on Forex will not only come from South Africa and Europe, but India as its election results are finalized tomorrow and Mexico after the outcome of its vote held this past weekend. The results in India and Mexico have produced the anticipated outcomes, so the USD/INR and USD/MXN should expect to become calmer in the days ahead.

After the anticipated U.S Fed FOMC meeting rhetoric on the 12th of June, and the Bank of Japan’s policy tidbits on the 14th perhaps things will become relatively tranquil. However, financial institutions will be busy over the next ten business days as they try to make sure they have balanced Forex positions, which take into account their commercial transactions and cash forward outlooks for clients which could add to the potential for volatility.

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AMT Top Ten Miscellaneous Blossoms for the 31st of May 2024

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Blossoms for the 31st of May 2024

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10. European Supremacy: The NBA Championship between Boston and Dallas is set to begin on the 6th of June. If the Dallas Mavericks win, it will mean Giannis Antetokounmpo in 2021, Nikola Jokic in 2023, and Luka Doncic in 2024 were victors, and are cementing the terrain as the best players.

9. Brisk Breeze: The need for ‘chill’ among AI and server companies isn’t only about attitude. The advent of quantum computing will add to the wintry demands. Vertiv, Asia Vital Components, and Auras Technology are a few of the enterprises in the industrial environment sector helping deliver precision cooling for the technologies to work efficiently.

8. Glitches: Stalled data within the S&P 500 and Dow Jones 30 for their index calculations took place yesterday for nearly one hour, but individual trading within companies via stock prices appears to have been unaffected. Futures trading for the two indices weren’t affected. On Monday the 18th of March, Nasdaq suffered a tech problem that stopped pre-market trading for a couple of hours.

7. OPEC: The cartel will conduct a one day online meeting this coming Sunday. Production levels will be discussed, among other issues. The price of WTI Crude Oil as of this writing is below 78.00 USD per barrel. While news remains stuck in hyperbole from the Middle East, the price of Crude Oil has declined since the first week of April.

6. Conviction: Donald Trump was found guilty in a NYC courtroom yesterday, but the verdict is certain to be appealed. The law of unintended consequences could come into play from the U.S as reactions generate. The perceived notion that ineffectual and non-credible leadership is mounting in the U.S, lends credence to some people around the globe regarding dwindling American exceptionalism.

5. Results: South Africa voting counts will be finalized sometime this weekend, India’s election count will be known on the 4th of June. The unknown outcomes are affecting the USD/ZAR and USD/INR, and more volatility in the currency pairs should be expected early next week.

4. Coincident: GDP results came in around their expectations yesterday. Growth numbers produced a gain of 1.3%, while the GDP Price Index showed a 3.0% climb. The data produced does show the U.S economy is slowing and is another ripple to be considered by analysts and traders.

3. USD/JPY: The Bank of Japan appears to be betting on weaker U.S data to continue, and potential dovish Fed rhetoric on the 12th of June to propel the USD/JPY lower, thus helping the BoJ to remain on the sideline and avoid an intervention for the moment. The BoJ will release their Policy Rate decision on the 14th of June and many eyes will be on the central bank’s Monetary Policy Statement.

2. Inflation: The Core PCE Price Index report outcome today is anticipated to be around the 0.3% ratio. The Federal Reserve pays plenty of attention to this publication and if the number meets the expectation or comes in below it, this could cause a repeat of the Fed’s dovish December 2023 FOMC Statement. Financial institutions have already begun wagering that the Federal Funds Rate could be cut this summer and later again this year. Many assets will react to today’s inflation report.

1. Behavioral Sentiment: Nervous price action has been seen in the equity indices and Forex this week. Investors may have felt they got a little ahead of their risk appetite curve and now appear to be waiting on more solid impetus to reconfirm their outlooks. Choppy price action has certainly been fueled by U.S Treasury yields which increased earlier this week. Losses in the S&P 500, Dow 30 and Nasdaq the past handful of days are now waiting for buyers to reemerge. The question day traders may want to consider is if financial institutions and large investors believe assets will cost less next week, or if prices have now hit worthwhile support levels which will spur on buying today?

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Caution as GDP and Reactive Sentiment the Key for the Week

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Caution as GDP and Reactive Sentiment the Key for the Week

Forex markets have seen plenty of sideways action with the USD Cash Index lingering within the weaker parts of one and three month ranges. Yes, financial institutions appear to be leaning towards a belief the Federal Reserve will have to become more dovish over the mid-term, but last week’s price action before the onset of the long holiday weekend which has just passed did start to produce headwinds.

Risk appetite although high has climbed down from its peaks for the moment. Yet, financial institutions, investors and day traders likely still are aiming for more optimistic results. Speculative inclinations may believe more weakness is about to come from the USD, and major currencies are within sight of important technical barometers which could fuel more bets on a weaker USD to develop.

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USD Cash Index One Month Chart on the 28th of May 2024

A taste for speculative buying in the equity indices while running out of some power last week remains within sight of highs. The Dow 30 and S&P 500 might have come off their records along with the Nasdaq, but the slight declines may be viewed as a buying opportunity by day traders.

However, before retail speculators dip their toes in the water they should understand that the Gross Domestic Product numbers this week will factor into existing behavioral sentiment. Again, taking a position for a short-term wager is different than buying an equity index as a long haul investment vehicle. The two are not the same and the daily fluctuations, even the weekly movements of the equity indices, do not bother investors who are gearing their outlooks for the long-term, while short-term moves can wipe out a person using too much leverage if they are pursing a casino like belief in direction without solid risk management.

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Dow 30 Index One Month Chart on the 28th of May 2024

Yesterday’s holidays in the U.S and U.K have likely given financial institutions a chance to reflect on events and outlooks which will be unfolding and affecting sentiment. The announcement on Wednesday of last week that Britain will have a national election on the 4th of July will certainly start to create concerns for the GBP/USD.

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USD/ZAR Six Month Chart on the 28th of May 2024

Tomorrow the South Africa election will be held. While not an event which will get the attention of all investors, the implications of the vote in South Africa and the potential for a coalition should be watched. If the African National Congress is forced to form a coalition, investment managers will be hoping that the political maneuvering doesn’t bring about a ‘hard-left’ ruling government. Again while the investment stakes may not be felt by everyone around the globe concerning the results in the South Africa election, its impact on geopolitics long-term could be substantial.

International mining companies with large amounts of infrastructure and investment in the nation will certainly be keeping their eyes on events. There is a high level of suspicion within South Africa that load-shedding (rolling electrical blackouts) which has largely disappeared the past few months could reappear after the election, which highlights some of the distrust citizens have regarding the current leadership. The ANC has been in power for 30 years and tomorrow’s election marks one of the first times their leadership may prove vulnerable.

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Gold Six Month Chart on the 28th of May 2024

As a clue for speculators and the level of complexity being seen in the financial markets near-term is that the price of gold remains elevated. Although not at its apex values, the price is certainly within sight of highs. What is interesting is that the record levels have taken place as USD centric attitudes have turned weaker the past month, showing that their is likely a large speculative presence within the gold market.

Certainly governments via central banks and other investors could be buying gold. The apex values in gold coupled with weaker USD sentiment which has developed the past month shows that nervousness still lingers. Again, long-term players in gold have much less to fear than short-term day traders who are betting on intraday price changes. Gold is a remarkably strong inflation hedge historically, but retail wagers on the price of the precious metal is a constant battleground. If the USD stays weaker over the mid-term it will prove very interesting to see where gold starts to display a durable support level – if in fact it is tested. There are gold bugs who certainly believe the price of the commodity should be much higher in relation to the unreliability of paper money in many spheres.

For traders who are looking ahead to the economic data risk events, the price of WTI Crude Oil needs to be given attention too. The price of the energy source remains under 80.00 USD per barrel which is important. If the costs of WTI Crude Oil remains stable this may cool some inflation fears. It should be noted that OPEC will begin conducting a conference to discuss Crude Oil production on the 2nd of June.

Tuesday, 28th of May, U.S Consumer Confidence via the Conference Board – the University of Michigan Consumer Sentiment numbers came in slightly better than expected last week. However, today’s reading is expected to be slightly lower than the previous result. Weaker than anticipated data could actually help the USD remain within its bearish technical range in Forex.

Wednesday, 29th of May, Germany Preliminary Consumer Price Index – this CPI result will impact the EUR/USD. The expectation is for a weaker result of 0.2% compared to previous outcome of 0.5%. If this number matches the expectation, this could put the European Central Bank into a collision course with financial institutions who want the ECB to take on a proactive dovish policy and begin cutting interest rates.

Thursday, 30th of May, U.S Preliminary Gross Domestic Product – the growth and Price Index numbers via the GDP reports will be significant and cause a large impact in the financial markets. Forex, commodities and equity indices (and Treasuries) will all be affected. The growth number is expected to be weaker than last month’s. Having produced lower results last month, if this GDP statistic is below the anticipated level of 1.3% it could set off fireworks. The GDP Price Index will have many eyes upon it too, and it carries a expected gain of 3.1%. Inflation remains a chief catalyst for the Fed and in Forex. The combination of the growth and price numbers is certain to cause volatility.

Friday, 31st of May, China Manufacturing PMI – economic data from China has been mixed recently, but foreign investment is still weak and the nation is looking for positive outcomes. Traders should keep their eyes on these numbers and also remember that economic results from China are not exactly the most transparent. Consumer numbers via retail spending domestically in China are still struggling. China is hoping to attain better trade relationships in Europe, but its intentions are running into a more competitive export landscape and political complications which are making the chances for a quick fix for its economy elusive.

Friday, 31st of May, U.S Core PCE Price Index – this report should be watched by Forex traders because it is highly regarded by the Federal Reserve as an inflation gauge. An outcome of 0.2% is the expectation for this report and if met, the USD could turn weaker going into the weekend.

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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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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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BoJ and Fed are today’s Forex Bogeymen, and Job Numbers Lurk

by with No Comment Behavioral SentimentCentral BanksFeatured Highlights

BoJ and Fed are today's Forex Bogeymen, and Job Numbers Lurk

While the Showa holiday is being observed in Japan, the BoJ has apparently reacted with an intervention after seeing the USD/JPY race to new highs in the wake of the central bank’s decision to hold its Policy Rate at 0.10% on Friday. If in fact the Bank of Japan has acted when most Japanese financial institutions are celebrating a long holiday weekend, the reaction to the intervention will be noteworthy when Japanese currency traders return to their desks tomorrow. The question obviously becomes whether large players in the JPY will continue to wager against the Bank of Japan’s current monetary policy or if the apparent intervention will make them cautious.

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USD/JPY One Day Chart as of 29th April 2024

U.S data this past Thursday turned in rather clumsy statistics starting with the Advance Gross Domestic Product growth results which showed the American economy is slowing. However, the GDP Price Index came in slightly higher than anticipated. This caused some tremors in Forex. Friday was followed by additionally troublesome readings when the University of Michigan’s Consumer Sentiment outcome was weaker than expected, but the U of M Inflation Expectations gauge was higher than the previous month’s report.

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USD Cash Index Five Day Chart as of 29th April 2024

The USD began to show signs of weakness in many major currency pairs last week. Perhaps the expectation that the worst of Federal Reserve outlook has now been absorbed is playing into the Forex results. However, the past four months of trading have produced a continuous choppy wagering landscape for speculators and clarity still does not exist.

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Gold One Month Chart as of 29th April 2024

Suspicion of the Bank of Japan’s intervention this morning and the creeping shadow from the U.S Federal Reserve which is scheduled to deliver their FOMC Statement this Wednesday have created trading bogeymen in many financial assets. The strains in the major equity indices, Treasuries and Forex are prime examples. While day traders try to find fair market value technically and financial institutions seek equilibrium, most observers likely have nervous behavioral sentiment as they consider mid-term prospects. The past month of speculative trading in Gold has produced record highs, but ran into resistance the past week as questions arise about USD inverse correlations not being technically efficient recently.

Monday, 29th April, Germany – Consumer Price Index – the inflation results from Germany should be given attention. The number will certainly affect sentiment surrounding the ECB and the EUR/USD, however the report should not cause an earthquake.

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USD/CNY One Month Chart as of 29th April 2024

Tuesday, 30th April, China Manufacturing PMI – the nation has been making claims via government officials the economy is showing signs of a rebound. Yet, disturbing consumer data continues to be seen. The manufacturing statistics from China though will also reflect demand in what is generally accepted as a recessionary period for many global spheres. Traders of the USD/CNY should pay attention to the outcome, the currency pair has incrementally climbed and there are rampant whispers about China undertaking a policy to weaken the Chinese Yuan to spur economic growth.

Wednesday, 1st May, U.S Federal Reserve Funds Rate and FOMC Statement – the Fed will not change its interest rate this week. What will be noteworthy is how Fed Chairman Powell presents this month’s FOMC Statement rhetorically as he is asked questions during his Press Conference. We are certain to hear words mentioned like ‘lagging data and positive signs regarding the potential of weakening inflation’. The question financial institutions want to know is how long will they have to wait for a change to the Federal Funds Rate. The Fed is likely to try sounding cautiously optimistic, but will it be believed? Forex will react to the Fed’s policy meeting pronouncements, but no major surprises should be expected. Some observers may find interesting evidence regarding the future for Fed’s policy via the price of WTI Crude Oil which is hovering near 83.00 USD per barrel as of this writing, because stable energy prices are a key factor regarding inflation.

Thursday, 2nd May, U.S Weekly Unemployment Claims – the jobs data which will start to be delivered late this week will get attention. Forex traders however will be swimming within the riptides already created by the Federal Reserve’s policy.

Friday, 3rd May, U.S Non-Farm Employment Change Numbers and Average Hourly Earnings – these reports will cause a reaction. What financial institutions will be on the hunt for is weaker than anticipated hiring. The inflation numbers from the wages report will be a factor too. The USD traded with a slight decline in Forex last week, those who believe the greenback has been too strong and are inclined to remain sellers should pay attention to the U.S jobs numbers. If the headline hiring number is stronger than anticipated, analysts will rush to the back pages of the statistics to see if part-time hiring is still outpacing full-time employment.