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AMT Top Ten Miscellaneous Views for the 15th of December

by with No Comment AMT MarketsAssetsFeatured Highlights

AMT Top Ten Miscellaneous Views for the 15th of December

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10. Book: Doctor Zhivago by Boris Pasternak.

9. Music: Moanin’ – Charles Mingus Big Band 93 Nostalgia in Times Square. Fantastic jazz.

8. Cryptocurrencies: Game of double dare continues as BTC/USD trades near 42,600.00. ETH/USD resides around 2,250.00. USDT remains at 1.00 and BNB/USD (yes, from the much criticized Binance operation) hovers near 250.00. Be careful out there, folks.

7. Argentina: Newly elected President Javier Milei has begun to enact economic reforms as the nation’s citizens and businesses hunger for better days. Will the Argentine Peso begin to stabilize?

6. South Africa: As the nation celebrates a public holiday for its Rugby World Cup victory today, it should be asked if the people are ready to vote for a political change in 2024? Or have things not gotten bad enough yet?

5. Central Banks: Federal Reserve ‘officially’ turned to a neutral/ almost soft monetary policy stance on Wednesday, the BoE and ECB followed Fed’s dance steps yesterday. GBP and EUR have gained and look intent to flirt with July 2023 values.

4. U.S Treasuries: Yields continue to erode and are near values seen half a year ago, with further decreases seemingly ready to occur mid-term.

3. Commodities: Gold is producing near-term speculative upwards muscle. Copper traders appear to be eyeing higher values.

2. JPY: Price velocity has propelled the USD/JPY to fresh lows, this as the currency pair gains speculative interest and behavioral sentiment shifts.

1. All Time Value: Dow Jones Industrials has achieved record heights. Nasdaq Composite and S&P 500 indices at one year highs as investors show risk appetite.

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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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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.

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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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USD/INR: Higher Move Correlates and Political Shadows Loom

by with No Comment AMT MarketsAssetsFeatured Highlights

USD/INR: Higher Move Correlates and Political Shadows Loom

The USD/INR is near the 82.8150 ratio as of this writing the 9th of August, on the 25th of July the currency pair was near the 81.6500 level momentarily. Upwards movement of the USD/INR did produce price volatility in the last week of July, and on the 1st of August the Forex pair was near the 82.1700 ratio. Another dose of upwards momentum quickly occurred on the first day of August, and by the 2nd the USD/INR was trading around the 82.7650 mark.

From Wednesday of last week the USD/INR has essentially taken on a consolidated framework, speculators who are gambling on the USD/INR and need big movement to occur in order to facilitate profits have likely found the currency pair difficult to manage. Yesterday a high of nearly 82.9500 came within sight briefly, this as global risk adverse conditions arose because of the Moody’s rating agency downgrade of some U.S mid and small size banks regarding their fundamental ‘soundness’ and credit worthiness.

Rising interest rates from the U.S Federal Reserve have made it harder for many U.S banks to conduct their business, and loans have become more expensive for their clients struggling to keep up with the rising payments. Particularly if borrowers have the unfortunate position of holding ‘variable’ loans which cost more when interest rates are going up. This has also affected the housing sector in the U.S and in the U.K, as mortgages have become highly priced due to the Federal Reserve and Bank of England having aggressive interest rate policies which are affecting the cost of new home purchases.

The question USD/INR traders may be asking is what does this have to do with them?

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USD/INR One Month Chart as of 9th of August

The USD/INR Doesn’t Trade in a Vacuum

The USD/INR has risen in value the past two and half weeks as many other major currency pairs have suffered a similar fate. Nervous sentiment abounds in the global markets because financial institutions are wary of what the major central banks will do next. U.S economic data has been mixed recently, but this perspective depends on time frames regarding outlooks.

Short and mid-term viewpoints continue to point to complications regarding growth and inflation expectations and interpretations of U.S data. The ratings downgrade of some U.S banks from Moody’s yesterday, and early last week Fitch’s downgrade of U.S Treasuries all is related. Rating agencies are getting nervous, perhaps because they do not want to be blamed and held liable if the proverbial ‘fluff’ hits the fan over the mid-term. Rating agencies largely ‘missed’ the financial crisis of 2007 in a famously bizarre manner. The sudden emergence of rating agencies warning investors has made the USD stronger as global investors have become risk adverse temporarily. Yes, this might feel illogical, but the USD remains the world’s safe haven.

The USD/INR also certainly trades because of economic conditions affecting its value from within India. The Reserve Bank of India has a large hand in managing values and is known to be rather active regarding interventions. Yet the USD/INR is being ‘allowed’ to continue to trade near all-time highs. This as India’s status as a growing economic power has taken shape in the global financial markets the past year. The India government has not been aggressive regarding its interest rate policy, and has allowed inflation to seep into the domestic economy via a weaker Indian Rupee for a number of complex reasons. Purchasing goods from India abroad and the ability to invest in India by global financial institutions may be more attractive to those holding USD and needing to convert into INR only when the time is necessary.

Politics and the USD/INR Price Level as 2024 Elections Start to Lurk

From a political perspective too, let’s acknowledge a general election will take place in India in April and May of 2024. Economic decisions being made today and for the mid-term are certainly being affected by the ruling Indian government’s outlook and desire to remain in power. Having come off of yesterday’s highs in the USD/INR the currency pair does remain within sight of highs.

The 83.0000 level likely remains a key barometer for the USD/INR and the Reserve Bank of India is likely watching this value carefully. While it seems unlikely the India government wants the USD/INR to trace much higher because of the psychological implications, global risk adverse sentiment are making the higher values of the currency pair sticky. Tomorrow’s inflation data from the U.S will affect Forex and the USD/INR via the Consumer Price Index. Friday the U.S Producer Price Index will be published. A slight rise in the broad CPI results tomorrow is expected, while Friday’s PPI outcome is expected to match last month’s numbers.

If risk adverse trading remains evident today and the USD/INR holds its ground over the next 20 hours, the currency pair could find that its consolidated price movement from the past week suddenly changes. A higher tick in U.S inflation could be enough to cause the USD/INR to challenge the 83.0000 ratio. Speculators who are wagering on the USD/INR are cautioned to be pro-active regarding their risk management the remainder of this week.

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Anxiety and Surprising U.S Data for Day Traders to Consider

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Anxiety and Surprising U.S Data for Day Traders to Consider

Global central banks stayed in their anticipated lanes last week as the Fed and ECB raised their key lending rates. The BoJ has admitted it is allowing its yield curve to increase, meaning the Japan government is cutting back on purchases of Japanese bonds. Forex produced anxiety and choppy results for day traders.

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Gold 6 Months Chart as of 30 July 2023

Economic data from the U.S last week provided a strong Gross Domestic Product result on Thursday, and followed with weaker than expected Personal Consumption Expenditures and Personal Income statistics before going into the weekend. Meaning the U.S economy appears to be surprisingly solid, while inflation pressures do indicate they are in decline. The Forex market turned volatile on Thursday and Friday, gold which traded at nearly 1980.00 USD on Thursday went into the weekend near 1959.00.

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VIX Index 1 Year Chart as of 30 July 2023

Stock markets in the U.S via the major indices continue to incrementally rise and folks waiting for a big sustained selloff are having their patience tested. Perceived volatility in U.S markets is very low and the VIX (Volatility Index) indicates many investors are not taking the time to hedge with options because their confidence is remarkably high. A cautious reminder for traders, one bad day could change all of the optimistic sentiment.

In the cryptocurrency world, folks should continue to keep their eyes on the Binance exchange and its Binance coin. Many digital assets seem to be suspiciously close to important support levels as this week begins and appear vulnerable.

Monday, 31st of July, China Manufacturing PMI – while U.S data surprisingly improves, China has not begun to show signs of a positive turnaround quite yet, and this reading is expected to be below last month’s outcome. China data is a solid barometer of global economic health and traders should give these results proper attention.

Monday, 31st of July, E.U Consumer Price Index Flash Estimates – the European CPI numbers are expected to come in slightly below the previous month’s reading. If for some reason these inflation numbers are higher than expected, this could cause some chaos briefly for the EUR/USD. A weaker number however offers no sound wagering basis for short-term day traders either. Behavioral sentiment appears to be ruling the EUR/USD landscape for the time being, and technical levels should be watched.

Tuesday, 1st of August, Australia Reserve Bank Cash Rate – the RBA is expected to follow in the footsteps of the Fed and ECB and raise its lending rate by 0.25%.

Tuesday, 1st of August, E.U Manufacturing PMI – Germany and France are anticipated to produce similar results to last month’s outcomes. Recessionary pressures are a concern in the E.U and better than expected numbers would be welcomed, but this may prove difficult to demonstrate as economic conditions remain challenging.

Tuesday, 1st of August, U.S ISM Manufacturing PMI – the results from the manufacturing sector in the States should be watched. A slight improvement is expected, but the reading is not expected to produce a wildly optimistic result. An outcome which slightly beats expectations, but is not too strong might make the USD slightly weaker. Global investment institutions are likely hoping for any signs that the Federal Reserve will have to become less aggressive. A lackluster to ‘fair’ ISM Manufacturing PMI result could be evidence larger Forex traders want to see if they are aiming for bearish momentum in the USD.

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NZD/USD 3 Months Chart as of 30 July 2023

Wednesday, 2nd of August, New Zealand Employment Change – the jobs statistics are expected to show slightly weaker results from the nation. The NZD/USD remains within the lower elements of its long-term price range. There are many NZD/USD bullish traders waiting for a sustained reversal higher, but it is unlikely to be produced from these New Zealand jobs numbers.

Thursday, 3rd of August, U.K BoE Monetary Policy Summary and Official Bank Rate – the Bank of England remains in a difficult spot and it will likely raise interest rates by another 0.25%. Criticism of the Bank of England has been loud in Britain, but the BoE likely feels it has to remain in line with the Fed and ECB. Recessionary pressures continue in the U.K and inflation remains problematic. Concerns will be heard regarding property mortgages for home owners if the BoE hikes. The GBP/USD will certainly move depending on the rhetoric from the Monetary Policy Summary and talking points delivered by BoE Governor Andrew Bailey.

Friday, 4th of August, U.S Non-Farm Employment Change and Average Hourly Earnings – the jobs data parade will climax at the end of the week, this after starting on Wednesday via the ADP jobs numbers. Investors will watch the Non-Farm Employment Change data carefully and correlate them to the better than expected GDP results from the 27th of July. The wages data from the Average Hourly Earnings is expected to come in with a slight decrease. A weaker inflation result from the wages statistics could cause additional softness in the USD. However, recent data from the U.S has been hard to predict correctly, and day traders may want to sit on the sidelines until all the jobs numbers are digested.

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China and U.S Data Early and Important as Central Banks Fret

by with No Comment Behavioral SentimentCentral BanksFeatured Highlights

China and U.S Data Early and Important as Central Banks Fret

Monday, 17th July 2023, China GDP and Industrial Production – the economic numbers coming from China have shown steady signs of a downturn. Gross Domestic Product figures however are expected to increase this month, but some analysts may question transparency issues regarding the reported statistics. Industrial Production numbers are expected to fall, which on the surface may cause people to question any positive results from the GDP. Retail Sales will also be published on Monday. The housing market in China remains critically important in the nation and some borrowers appear to be suffering financial stress. While many global retail traders might not be invested in China, the nation serves as a good barometer for the world’s economy, particularly regarding consumer demand.

Monday, 17th July 2023, U.S Empire State Manufacturing Index – the New York based report is expected to have a negative reading. It should be noted June’s data came in stronger than expected. Another positive surprise outcome would continue to show economists are finding it difficult to gauge the U.S economy. Last Friday’s solid Consumer Sentiment reading from the University of Michigan highlighted the rather complex results from the U.S, weaker than expected inflation numbers are also factoring into a muddled sentiment. However, the Federal Reserve is still believed to be leaning towards another interest rate hike on the 26th of July. Day traders should remain alert.

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USD/CAD 3 Month Chart as of 17th July 2023

Tuesday, 18th July 2023, Canada Consumer Price Index – the inflation numbers from Canada are expected to show a slight decrease in the velocity of rising prices. The numbers are likely to affect the USD/CAD which is trading near lows last challenged in September of 2022.

Tuesday, 18th July 2023, U.S Retail Sales – considering last week’s improved Consumer Sentiment numbers recently from the States, demonstrating better retail results compared to last month will not be a surprise. Earnings season on Wall Street gets underway this coming week and solid Retail Sales numbers may help mid-term outlook regarding equities. However, behavioral sentiment is fragile.

Wednesday, 19th July 2023, U.K CPI – the inflation numbers from Britain are expected to show a slight decrease in the rate of price expansion, but any result above 8% via the broad data will not make many folks feel better. GBP/USD speculators should monitor the reports.

Thursday, 20th July 2023, U.S Existing Home Sales – the rising costs of mortgages in the States is having an effect on the marketplace. Signs of stress in housing is an intriguing barometer regarding the outlook for the American economy. Better Consumer Sentiment and Retail Sales mixed with less than glowing numbers from the housing sector could make for a troubling diet for traders to consider and act upon.

Friday, 21st July 2023, U.K Retail Sales – recessionary results are shadowing Britain. Poor results from the retail sector would not help behavioral sentiment, particularly if inflation numbers have continued to show they are unrelenting two days before. The Bank of England is in an uncomfortable spot, this as the GBP/USD trades near highs it last saw in April of 2022.

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Summertime Behavioral Sentiment Game: Who Do You Trust?

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Summertime Behavioral Sentiment Game: Who Do You Trust?

Have we started to reach a polite equilibrium within Forex, gold, equities and bonds for a moment? U.S CPI data just came in below expectations, the decrease of inflation pressures in the U.S will be welcomed. Price ranges are starting to show signs of polite trends in Forex and equities – there seems to be a recognition of basic ideas which are perhaps serving as factors that are ‘accepted’ in the broad markets. Please do not close your eyes for long, because conditions can change in a moments notice, but for the moment the USD is weaker.

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Gold One Month Chart as of 12th July 2023

The Federal Reserve could still raise its Federal Funds Rate at the end of July, though today’s CPI data outcome will create headwinds against that notion. There has been a wide voice given by folks who say the Fed shouldn’t raise rates again, and that real inflation will start to come down and that it is doing so now. The CPI has shown a decrease in U.S inflation – a larger drop than anticipated, which will certainly spur on USD weakness today. This confirms – momentarily – many analysts inflation outlooks who work in financial institutions not related to the U.S Federal Reserve and have been saying price pressures will recede. Yet, inflation is not dead yet and may still be heard. Stagflation is a genuine concern.

Tomorrow’s U.S Producer Price Index will be another opportunity to stir sentiment. Remember folks, outlooks are often adjusted according to facts. But what are facts? Can we really trust them. What are leading indicators, what is data that looks forward instead of backwards – numbers are often offered as evidence but randomness often rules interpretations of data. How do acceptable outlooks really develop when data management and outlooks can change within split seconds depending on the team looking over the quantified math. Humans are naturally optimistic, even when the data is negative, this can lead to bias.

We are in an age when trading software is doing a majority of the large volume transactions, and has been coded by algos processed by quant teams in financial institutions. Do retail traders even have a chance in this type of environment? Yes, retail traders can still manage to find opportunities, but they need to combine technical perceptions with fundamental knowledge of data, and combine the two into a behavioral sentiment outlook depending on their time horizons.

Market dynamics and situations change a lot in the broad markets. Assets move depending on the bias of incoming data. Preconceived notions being acted on and then changing according to need can be done in microseconds because of existing trading technology that financial institutions use. Larger players have an advantage and they are not about to give this up. Timeframes are also different for big trading houses compared to small speculators. It is also important to stress institutional traders could care less about day traders in Forex.

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GBP/USD One Month Chart as of 12th July 2023

We have finished nearly a month of summer trading and seem to be confronted by a question of who do we trust? Do we trust the U.S Federal Reserve and its decisions and outlooks? In my opinion, you shouldn’t. But you should also remember the old adage, do not fight the Fed. The U.S central bank is bigger than you and I.

Central banks work together and often coordinate their combined outlooks, while shadows cast from the ‘oversight’ of political leaders rhetoric are frequently given consideration by the Fed, BoE, ECB and BoJ officials even if they claim they are not listening. Inflation is not welcomed by central banks, but because they are largely reactive and not proactive the Fed and others sometimes look uncaring and like fools, while the public sometimes suffer.

Thus we sit and wait for central bank pronouncements, but for the moment we seem to have a good grasp regarding what they will say. And perhaps – for the moment, maybe that is why Forex, gold and equities are trading rather politely. We seem to think we know what is going to be said moving forward for the next few weeks and remainder of the summer – more of the same warnings and interest rate correlations sprinkled in via central bank diatribes.

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Week Ahead: Inflation will be the Crucial Word for Investors

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Week Ahead: Inflation will be the Crucial Word for Investors

Last week finished with another reminder that inflation cannot be easily scoffed at by investors who continue to believe higher prices will eventually slowdown. Average Hourly Earnings last Friday came in above the expectation and this was enough to rattle Wall Street again, which saw the major equity indices decline and bond yields incrementally rise. Inflation ‘talk’ will remain important this week because of coming U.S data.

Real Estate including REITS becoming a Topic of Discussion as Mortgages Rise

Market watchers should also pay attention to news regarding mortgages on residential homes, and listen for troubles from the commercial real estate market, as these sectors deal with rising interest rates in the U.S and U.K. Increased nervousness within these markets could have an affect on behavioral sentiment. Let’s remember the catalyst for the financial crisis of 2007 was the real estate sector.

Which brings us back to inflation and the growing acceptance among investors the U.S Federal Reserve may be ‘forced’ to hike the Federal Funds Rate on the 26th of July, if price data continues to come in ‘hot’. Some investors will likely be heard saying an increase of 0.25% has already been factored into marketplace, but the prospect of another hike in late 2023 could be problematic. Forex, gold and bonds dynamics will tell us a lot when this week concludes regarding outlooks.

BNB/USD Price Should be Monitored as Binance Trembles

An outside source of financial and speculative news is likely to come from cryptocurrency. If you are gambling on this asset class (or should we say commodity based on hot air) and like the adventure of wagering, please continue to pay attention to Binance which is showing signs of duress. If the Binance cryptocurrency exchange shows additional signs of pressure on its BNB (Binance Coin), trading waters within the world of crypto could trigger additional drowning victims. If you thought the Sam Bankman-Fried story made interesting news last year regarding fraud and other criminal activity, the FTX saga could prove to be only the tip of the iceberg.

Data Events Ahead to Watch

Monday, 10th of July, China CPI and PPI – the inflation data could prove important for investors who correlate economic statistics from China into their global forecasts. Traders within India should pay attention to these Chinese price reports, because global investors are starting to shift their assets into the Nifty 50 and other NSE equities because of risk and reward equations.

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GBP/USD One Month Chart as of 9th July 2023

Tuesday, 11th of July, U.K Claimant Count Change and Average Earnings Index – the numbers need to be watched by GBP/USD speculators. The results from the U.K will be intriguing because of employment results, but more importantly for inflation concerns and the knock-on effects. Bank of England Governor Andrew Bailey is speaking a few times this week, and this includes Wednesday the 12th of July, when he will talk about the Financial Stability Report. The GBP/USD has moved towards monthly highs recently.

Wednesday, 12th of July, New Zealand RBNZ Official Bank Rate – NZD/USD day traders will want to pay attention to the central bank’s Rate Statement. While no increase of interest rates is predicted, the Reserve Bank of New Zealand at a minimum will likely have to admit inflation remains a concern.

Wednesday, 12th of July, U.S Consumer Price Index – the inflation reports from the States will have all eyes on the outcomes of the monthly and annual comparisons, including the Core numbers. The results from these inflation statistics will certainly cause momentary volatility within Forex with the USD as the focal point.

Wednesday, 12th of July, Canada BoC Overnight Rate – the Bank of Canada is expected to hike its interest rate by 0.25% to the 5.00% mark. USD/CAD will react to the BoC Rate Statement based on its outlook.

Thursday, 13th of July, U.K Gross Domestic Product – the ‘growth’ numbers are not expected to be positive. A drop of minus -0.3% is the expectation. Talk of recessionary pressures in Great Britain will be heard. Unfortunately, the discussion about a struggling economy, mixed with stubborn higher prices for consumers and mortgage rates that are rising will not make for calm stomachs. U.K equity results via the FTSE 100 Index should be monitored.

Thursday, 13th of July, U.S PPI – the Producer Price Index figures will be the last cog within the important inflation data for the week. Stubborn prices for wholesale goods are a concern, because the costs to consumers becomes more expensive when there are higher price pressures.

Friday, 14th of July, U.S Consumer Sentiment via the University of Michigan – if the Consumer Sentiment readings from the UofM report improves, and the U.S inflation data which was released earlier this week has proven stubborn, this could become a source of pain for investors who may be forced to consider the Fed will not only raise the Federal Funds Rate late July, but later in 2023 also. Short-term traders should monitor this report accordingly.

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Friday Barometer Regarding the BoE Decision and Gold Prices

by with No Comment AMT MarketsAssetsFeatured Highlights

Friday Barometer Regarding the BoE Decision and Gold Prices

The Bank of England’s rate hike of 0.50% cements the notion that global central banks remain steadfastly locked on inflation, and understand politically the implications on the public regarding higher consumer prices which are being experienced. The Bank of England ‘met’ before its Official Bank Rate announcement with corporate bank executives it was whispered, to discuss their concerns regarding the knock on affects of higher mortgage rates to come. However, this did not stop the BoE from being aggressive.

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GBP/USD Three Month Chart as of 23rd June 2023

Is the BoE Move a Sign Regarding the Fed’s Next Decision?

The move by the BoE also is intriguing because the larger than expected hike puts into play the notion the U.S Fed may be raising the Federal Funds Rate in July. The reasoning is based on the idea the Bank of England wants to protect the British Pound from another interest rate hike from the Fed, thus ‘securing’ the value of GBP/USD Forex mechanics.

The U.S Federal Reserve, the BoE and ECB finally seem to have a grasp on import inflation implications. Although higher costs and dynamic pressures on exporting countries like China, India and others that face the gauntlet of these challenges remains critical, because these nations need to raise the costs of manufactured goods internationally when they sell.

Smart Money and the Value of Gold

Let’s talk about ‘smart money’ for a moment surrounding Gold – and please try to hold down your laughter – but the price of the precious metal is interesting and should be monitored even by folks who do not trade the commodity. Gold as of this morning is near the 1915.00 USD ratio.

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Gold Six Month Chart as of 23rd June 2022

On the 4th of May the price of the precious metal momentarily challenged the 2080.00 level. On the 1st of June the price of the commodity was near 1985.00. Do you see a trend here? Please note, Gold isn’t going to zero.

The point to be made is that the build up in the price of the precious metal from the 22nd of November 2022 when Gold was around the 1625.00 USD per ounce level, until early May anticipated the U.S Federal Reserve was going to become more dovish regarding their interest rate polkicy. For consideration look at the price of the USD during this time too, against many major currencies – the value of the USD also started to come down.

‘Smart money’ is showing signs of nervousness certainly since the start of June that more hikes are feared from the Federal Reserve. However, the price of Gold and the USD are not correlating well at this moment. This is a potential sign that Gold and the USD are both within speculative trading zones in which financial institutions are seeking ‘true’ equilibrium and are not comfortable. Fragility in the financial marketplace is likely to be seen until the Federal Reserve Federal Funds Rate announcement late in July. Expect financial institutions to price in their outlooks respectively depending on their outlooks.

Gold and U.S Treasuries: Inverted Interest Rate Implications

Gold definitely fluctuates within daily trading conditions, it is a speculative commodity, but it is also a solid barometer of risk management among the elite. If financial institutions are in favor of buying items like U.S bonds because of their guaranteed short term interest payments (look at the fact U.S Treasuries are mostly inverted – meaning shorter term bond interest rates are paying higher returns compared to longer term bonds) instead of buying Gold as an investment tool.

The Gold and USD Forex dynamics tells us that investment institutions are still very nervous about the Fed potentially raising interest rates a couple of more times this year. July and late this year appear to be reasonable bets. This Fed consideration and concern remains legitimate while looking forward as long as inflation remains elevated in the U.S. However, the Federal Reserve must also feel comfortable they will not kill mid and small sized banks, which by now should have shifted their business practices allowing for slightly higher interest rates to be delivered.

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FOMC Meeting Minutes and Key Growth Data Coming this Week

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

FOMC Meeting Minutes and Key Growth Data Coming this Week

Monday the 22nd of May, Japan Core Machinery Orders – which will likely have very little impact on the markets – not even the USD/JPY should react too much. Although it should be noted last month’s figure was negative and this month’s result is expecting a better outcome.

Monday the 22nd of May, E.U Consumer Confidence – forecast to produce a negative number, but this statistic doesn’t usually get much of a response in the financial markets unless there is a shocking result.

Tuesday the 23rd of May, E.U French and German Manufacturing and Services PMI, along with the broad E.U results – the manufacturing statistics from France and Germany are expected to come in slightly better than last month’s results but remain in negative territory.

Tuesday the 23rd of May, U.K Manufacturing and Services PMI – traders will watch these results after the bad GDP numbers from Britain almost two weeks ago.

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GBP/USD Three Month Chart as of 21st of May 2023

Tuesday the 23rd of May, U.S Flash Manufacturing and Services PMI – the reports could prove of interest and cause a bit of a tremor in the market, but unless there is a big surprise investors will remain cautious as they anticipate the next day’s potentially big risk events.

Wednesday the 24th of May, U.K Bank of England Governor Bailey – will be speaking at two events and could stir the GBP/USD with his comments on the British economy and inflation.

Wednesday the 24th of May, U.S Treasury Secretary Janet Yellen – will be speaking at a Wall Street Journal event, where she will be listened to for any comments on the ‘U.S debt ceiling” crisis. Yellen is a ‘trained’ speaker and she will try not to scare financial institutions who will have some leaders in attendance.

Wednesday the 24th of May, U.S FOMC Meeting Minutes – the report which will outline the U.S Federal Reserve’s thinking regarding its recent interest rate hike and what it might be considering regarding June could impact the marketplace. The report is published late in the day, but financial institutions will certainly wait for the publication and react. While the FOMC paper is sometimes considered ‘noise’, this report will be important because of the nervous sentiment which exists in markets like Forex and equity indices as they deal with a lack of clarity.

Thursday the 25th of May, U.S Preliminary Gross Domestic Product – the growth (or lack of growth) numbers from the States will be watched intently. A muted projected gain of 1.1% is anticipated by some analysts.

Thursday the 25th of May, U.S Preliminary GDP Price Index – this report will deliver insights regarding inflation in the U.S and should be given some attention by traders.

Friday the 26th of May, Core PCE Price Index – the inflation numbers should be watched. Any surprise above the anticipated 0.3% forecast could cause an affect in the financial markets.

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Economic Data that needs Attention this Week

by with No Comment Central BanksDataFeatured Highlights

Economic Data that needs Attention this Week

Tuesday 8th of May, U.S FOMC Member Speaks – N.Y Federal Reserve President John Williams will talk at the New York Economic Club. N.Y Fed is important regarding monetary policy particularly for financial institutions. Williams words should be given merit. Williams will also be likely listened to for any comments regarding U.S corporate banking health regarding mid-size and smaller institutions.

Wednesday 9th of May, U.S Consumer Price Index reports – three key inflation consumer price statistics will be published including monthly, annual and core monthly changes. The results will be important taking into consideration the manner the U.S Federal Reserve conducted its ‘sitting on the fence’ rhetoric last week, as if looking for an accuse to continue to raise interest rates if inflation remains stubborn or worse continues to climb.

Thursday 10th of May, U.K BoE Monetary Policy Summary and Official Bank Rate – which is expected to produce another increase of 0.25%.

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GBP/USD One Month Chart as of 7th of May 2023

Friday 11th of May, U.K Gross Domestic Product – growth numbers from the U.K are expected to demonstrate economic conditions remain challenging.

Friday 11th of May, U.S Preliminary University of Michigan Consumer Sentiment – a rise in consumer sentiment from this report could add to the confusion and ‘concern’ that financial institutions have regarding the U.S Federal Reserve’s short term monetary policy regarding the prospects for a June increase to the Federal Funds Rate. If the number is weaker than expected this could help ‘pause’ outlooks.