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AMT Top Ten Miscellaneous Salvos for the 29th of September

by with No Comment AMT MarketsAssetsFeatured Highlights

AMT Top Ten Miscellaneous Salvos for the 29th of September

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10. Profit: OpenAI has announced plans to become a money making corporation. Founded in 2015 the artificial intelligence company had the stated goal of creating ‘safe and beneficial’ technologies via its foundation, and now will face the slings and arrows of investors and potential critics. The AI boom the past two years has produced many new competitors. Can Sam Altman, the CEO of OpenAI, sustain the momentum generated or will negative organizational impetus turn the company into an also-ran?

9. Softs: Cocoa, Coffee and Sugar all remain volatile and playgrounds for day traders who like casino experiences via CFDs. Cocoa is again over 9,000 USD, Sugar touched February highs this past week as it shows signs of extreme speculation, and Coffee Arabica surged to record prices on Thursday and Friday. Over exuberance however is not being created by day traders, it is the work of large institutional traders who are in control. While the ‘softs’ may look overbought it would be unwise to bet against trends while big players pursue bullish notions. Massive money is being made in these commodities, but losses are also being felt by those who wager incorrectly.

8. Escalation: Risks in the Middle East have become a focal point, this as the region appears to have generated more must watch television. The noise which the media seemingly craves is hard to escape. Market participants cannot be blamed for maintaining vigilance as sabers rattle, especially after Friday’s events in Beirut when Hassan Nasrallah, the Hezbollah leader, was eliminated by Israel. However, experienced traders who are also strategic analysts have seen this show before and may turn the channel knowing there will be reruns in the future.

7. WTI Crude Oil: Prices closed within the lower elements of the commodity’s long-term depths. Traders did have a chance to react to Friday’s developing news from Beirut, but the energy sector remained calm. The price of WTI was around 68.57 going into this weekend, after trading at highs earlier in the week. For all the talk about fear of escalation from the Middle East, the price of Crude Oil remains within a remarkable bearish stance as large traders appear to be more concerned about lackluster economic growth globally.

6. Apex Gold: The price of the precious metal flirted with 2,685.00 momentarily on Thursday. The price of gold going into this weekend finished near 2,658.00 USD. Sustained highs have certainly continued to catch the attention of short-term speculators, but they need to be aware the commodity does remain susceptible to sudden spikes. While alluring, gold remains dangerous for day traders.

5. Countdown: The U.S Presidential vote is slightly more than 5 weeks away. Interestingly, the Fed will announce their Federal Funds Rate decision only two days after the election results. Will the outcome of the vote change the Fed’s perspective on interest rates? Financial institutions will definitely brace for the outcome of the U.S vote. Cautious winds will start to prevail as the 5th of November draws closer.

4. China: A huge stimulus package from the Chinese government has been initiated, but talk regarding potential effects and outcomes are being debated. The notion that the Chinese economy is be driven too much with a top to down centralized approach is being vocalized by some worried ‘outside’ observers. The USD/CNY is trading near 7.0105. The Shanghai Composite is near 3,087, this after massive gains via a reversal upwards which was sparked from lows around 2,691 which were seen on the 18th of September.

3. Risk Appetite: U.S equity indices continue to challenge record values in the Dow 30 and S&P 500. Yes, the Nasdaq remains beneath its highs, but is still within sight of all-time heights. Trading this week will work under the shadow of the jobs numbers coming this Friday. Financial institutions have produced rather positive behavioral sentiment and do not seem like they are ready to back away from this stance. Are some large market participants starting to quietly bet on the possibility of a Trump victory which they believe would be good for U.S stocks?

2. Forex: USD centric notions remain the impetus in foreign exchange. The USD Cash Index is within the lower boundaries of its long-term values as it trades near July 2023 realms. If the USD Cash Index moves lower it would then start to technically be within price calculations not seen since the spring of 2022. Action in the USD/JPY and GBP/USD, and other major currency pairs have been volatile, choppy conditions should be expected this week for traders leading into Friday’s key data.

1. Jobs Numbers: Last week’s GDP statistics met expectations, while inflation numbers via the Core PCE Price Index came in slightly below estimates. The growth and inflation outcomes set the table for the Non-Farm Employment Change and Average Hourly Earnings which will be reported on the 4th of October. If the employment numbers continue to trend lower and there are additional negative revisions this coming Friday, this could propel USD selling. Financial institutions are trying to figure out if the Fed will cut by 0.25% or 0.50% in November. The Fed was aggressively dovish when they cut the Federal Funds Rate by 0.50% on the 18th of September, but the U.S central bank might want to be cautious in November following the election and wait for all the dust to settle and cut by only 0.25%. Thus allowing for another interest rate cut in early 2025 if needed. The broad markets are in a reflexive mode for the time being, this Friday’s data will be important and cause an immediate reaction that day traders will notice.

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AMT Top Ten Miscellaneous Battlefronts for the 7th of Sept

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Battlefronts for the 7th of Sept

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10. Cape Town: Springboks take on the All Blacks in Round Four of the Rugby Championship later this afternoon. South Africa won last week’s test. Roster changes have been made to both starting squads. Springboks Captain Siya Kolisi will start, this after he had been listed as questionable earlier this week because of a nose fracture he suffered in last Saturday’s game, which will be dealt with surgically in the near future. The All Blacks are extremely difficult to beat two games in a row, today’s match could be a firecracker.

9. Spy Games: Alleged China spy Linda Sun is accused of trying to influence policy while working in New York Governor Kathy Hochul’s office as an aide. The alleged spy also worked in the previous New York administration under Andrew Cuomo. Sun and her husband, Chris Hu, have been charged by the U.S government to be in violation of the Foreign Agents Registration Act amidst a litany of alleged illegal activities.

8. VPN Wanted: Brazilian Supreme Court Justice Alexandre de Moraes has suspended X because of claims the social media service, previously known as Twitter, is allowing ‘misinformation’. Justice Alexandre de Moraes has broad powers and is permitting Brazil’s ruling government led by Lula da Silva to walk a perilous line that does not allow for free expression. Brazil has not heard the last of Elon Musk.

7. Boeing: Starliner returned to earth last night touching down in New Mexico, but without the astronauts it delivered to space in early June. The mission was supposed to take 8 days, but instead stranded the two astronauts on the International Space Station. NASA has stated it was potentially dangerous for the astronauts to return in Starliner. The astronauts are now scheduled to return in February 2025 with SpaceX. Starliner is owned by Boeing. This time last year Boeing’s share value was near 219.00, as of yesterday it is 157.62 USD.

6. Xmas in October: Nicolas Maduro, the Venezuelan President (dictator), has announced the Christmas holiday will be celebrated on the 1st of October, allowing Venezuelan citizens an early celebration in order to forget the troubles imposed on the nation by foes who are working against the socialist government. Maduro joins a well established line of totalitarian leadership who have historically moved or canceled religious holidays to manipulate the population.

5. Harris vs. Trump: A debate between the two candidates will take place this coming Tuesday on the 10th of September. Because of murky outlooks among many financial institutions, this televised ‘exchange of views’ will not only get the attention of U.S voters and an interested worldwide populace, but global investors as well. The last Presidential debate effectively ended Joe Biden’s hopes of being re-elected. Will this event proceed without biased moderators?

4. Wobbly High-Wire: WTI Crude Oil finished the week around 68.52 per barrel as traders appear to be worried about a U.S economic slowdown. Gold closed Friday near the 2,497.00 realm per ounce, as investors fret over the USD and Federal Reserve. BTC/USD is trading around 54,230 at the time of this writing, Bitcoin was valued around 65,000 early on the 26th of August. Cocoa closed near 8,300.00 USD per ton yesterday after flirting with lows touching 7,900.00 on Wednesday. Day traders trying to wager this past week within commodities likely found they were not immune to nervous sentiment.

3. Negative: U.S jobs data was bad. While some say the numbers were mixed the Non-Farm Employment Change came in significantly lower than its estimate, and the previous month’s statistics were revised downwards. The higher Average Hourly Earnings report provided no favors via its outcome of 0.4% compared to the expected result of 0.3%, it wasn’t too far from the estimate and should not change inflation perspectives. Simply put, the jobs numbers are causing concerns in many financial institutions who believe the Federal Reserve is being too cautious.

2. Nervous Investors: U.S equity indices finished yesterday’s trading at their lows for the week. In fact the Nasdaq 100, Dow 30 and S&P 500 are all traversing values they last saw on the 13th of August. The major indices are fragile. Equities on the 13th of August were still recovering from losses seen the week before when previous Fed and BoJ policy chaos triggered overreactive selling on the 5th of August. On Friday the 2nd of August negative Non-Farm Employment Change data was published. What will happen to indices, Forex and Treasury yields on Monday the 9th of September?

1. Fed Fail: John Williams the New York Federal Reserve President said after the jobs numbers were reported, that the Federal Funds Rate is in a position to be cut. However, Williams continued to lean into the widespread notion the Fed will only impose a 0.25% decrease. He did say he would look at the jobs numbers closely, but he believed the Fed is well positioned. Behavioral sentiment among financial institutions appeared to react poorly to Williams remarks, producing a strong selloff as Friday progressed. The dream of orchestrating a soft economic landing in the U.S by the Federal Reserve allowing inflation to erode, the jobs market to soften, and GDP to remain above recessionary pressure remains the lofty goal. However financial institutions do not like the convoluted mid-term economic outlook, they now want to hear a dovish sounding Federal Reserve and appear ready to cause more short-term chaos in the markets this coming week.

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Risk Analysis Review: Warning about Coronavirus in Feb. 2020

by with No Comment AssetsBehavioral SentimentCentral Banks

Risk Analysis Review: Warning about Coronavirus in Feb. 2020

Below is a risk analysis note written in February of 2020 regarding the risks and potential implications of coronavirus as seen by Robert Petrucci on financial markets. The letter was sent to a senior associate who was a Chief Investment Officer for a firm. After speaking to the senior associate on the phone, feeling as if his thoughts were dismissed without heed and told he was too concerned about coronavirus, Mr. Petrucci sent the following to the CIO:

Thanks for asking about my thoughts.

What worries me is the opportunity for the virus to be a catalyst. The reactions in the E.U by government talking heads reminds me a lot of the financial crisis in 2007 when people publicly disregarded the potential domino effect which was becoming apparent. 

The Coronavirus imo is a potential domino which could take down the remainder of a fragile architecture. Meaning the ill-conceived philosophy and work of central banks in Asia and Europe have left them with little regarding ammunition should they need to fire an economic gun. If Europe and Asia buckle the US will be left limping too.

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Psychologically the markets appear vulnerable, but as you rightly point out the higher realms of the Indices have been waiting for a bit of a sell off for a long time and the selling underway may be more of a reaction and mere trigger which has been long overdue. 

However, I wonder about the ‘clever’ algorithms which have been developed and trade also due to human bias. What concerns me more than what is taking place in China is what is happening in Italy right now. 

Italian governments have a long political history of ineptitude and disregard of reality regarding numbers which are staring them in the face, particularly with budgets and a long tradition of corruption and its destructive force on transparency. If Italy continues to spike higher infection numbers and continue to escalate then I believe the E.U is in for trouble. The inaction of Italy and its reliance on the tourism business will make it hard for them to accept shutting down major airports and cities which enjoy the fruits of international visitors year round. 

Also, I must add and circling back to China that it is not known yet if another outbreak may suddenly appear in another zone if someone dealing with this asymmetrical virus is unaware of their affliction. 

Which brings me back to the springboard, worst case scenario I fear is a major outbreak in the E.U including Germany. If we see signs of spikes statistically across Europe the next two weeks it will be devastating economically for the next quarter financially. 

As you say, things will certainly bounce back, they always do, we must look at the long term. Investors need to keep a stiff upper lip and protect themselves as you have done in many regards with Indices, US ten year bonds and some gold. 

The question for me now is what happens the next ten business days across the U.S and Europe and how the world handles this virus. Worst case is pandemic and bad Central Bank formula, which have been in place the past twelve years with cheap money. The desire to keep everything steady may in fact lead to miscalculations which have not been planned for and cause reactions in the markets which cannot be checked this time around. I do not believe we are at a Black Swan point yet, but it does worry me that the E.U politicians and even some U.S politicians seem to have their head in the sand or look like deer stuck in the headlights.

Robert Petrucci 26 Feb 2020

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AMT Top Ten Miscellaneous Notions for the 30th of August 2024

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Notions for the 30th of August 2024

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10. Ellis Park, Johannesburg: The Springboks will face the All Blacks on Saturday in round three of the Rugby Championship. One of the greatest rivalries in sports will match South Africa who is looking to cement their current team’s legacy as one of the best rugby squads ever, versus New Zealand who is looking for revenge having lost to the Springboks in the World Cup Final in October 2023.

9. Labor Day: Short-term speculators should be mindful that today’s volumes may be thin due to U.S financial institutions allowing employees to leave early for a long weekend. While all the major U.S exchanges will be operating, transaction volumes will become lackluster as the day progresses with the last U.S summer holiday approaching.

8. Precious Future: Gold is traversing around 2,520.00 USD per ounce this morning, as Bitcoin is near 59,500 USD as of this writing. The precious metal was around 2,000.00 much of February, while Bitcoin began flirting with 59,000 and 60,000 in late February after starting that month near 43,000 USD. While influencers proclaim the future is digital with Bitcoin, Gold continues to shine and has a historical track record as a store of value.

7. Pavel Durov: The CEO of Telegram was released on Wednesday after posting 5 million EUR as bail, he must stay in France and faces a handful of charges. Russia, the UAE and high profile people, including Elon Musk, have publicly criticized France for Durov’s arrest last Saturday. Free speech advocates are largely against the arrest of Durov, while France contends Durov has not been forthcoming about data which has been shared on Telegram to conduct criminal enterprises. Julian Assange was arrested in 2019 in Britain and was only released in June of this year, promptly leaving for Australia.

6. Commodities: The price of WTI Crude Oil is near 76.00 USD and remains in a fairly stable range, Cocoa remains within sight of 9,000.00 as it trades around 8,950.00 this morning. And the prices for Coffee via Robusta and Arabica continue to flirt with apex highs. Day trading wagers on these commodities should be done carefully before the U.S holiday.

5. Art of Speaking: Kamala Harris is being criticized for her reliance on teleprompters as some pundits wonder loudly when she will sit for an unscripted interview. Donald Trump faces continued scrutiny for speaking extemporaneously, and everyone knows this characteristic is not going to change. The race for the White House appears tight. The televised debate between the candidates remains on the schedule for the 10th of September and its format may present the opportunity for verbal fireworks.

4. Eastern Europe: The Russian-Ukrainian war has been escalating the past few weeks as both sides appear to be working with the belief they need to create facts on the ground over the next few months. The potential of a victory by Donald Trump in the U.S may be pushing Russia and the Ukraine into a mode which hopes they can bolster their respective negotiating positions, this if the newly elected U.S President can get the warring sides to discuss an endgame.

3. China: The nation faces difficult economic circumstances and tries to maintain stability via Yuan and bonds interventions. Also, the foreign policy stance of China is growing tensions with the Philippines. The long standing disagreement about Taiwan’s sovereignty is well documented, but Chinese naval activity in the South China Sea is raising alarm bells among some political analysts. Manufacturing PMI results will be published by China early on Saturday. Economic data from the nation is being inspected by foreign investors carefully who are looking for long-term yields, but are troubled about transparency and the potential of sudden policy changes.

As an aside, APEC will conduct its annual meeting in November from the 10th until the 16th in Peru. Both Joe Biden and Xi Jinping will attend. Depending on Biden’s health and the outcome of the U.S Presidential Election on the 5th of November, this Asian-Pacific Economic Cooperation Forum will prove important.

2. U.S Data: Jerome Powell’s capitulation last Friday via his public statement that the Fed needs to cut interest rates fueled a weaker USD. Forex has seemingly priced in a combined 0.50% basis cut via the Fed for September and November. Yesterday’s stronger than anticipated U.S GDP growth and inflation reports however created headwinds, which caused outlook jitters. Today’s Core Personal Consumption Expenditures Price Index monthly gauge is expected to come in with a gain of 0.2%. If the inflation report can match the anticipated result this may calm Forex, equity indices, and Treasury yields before going into the long holiday weekend. Next Friday U.S Non-Farm Employment Change numbers will be published. Today’s trading may be muted because of thin volumes, but day traders should expect volatility to increase starting next Tuesday.

1. Competition: Nvidia was valued around 47.50 USD per share this time last year, as of today the price is near 117.60. Intel’s value was approximately 34.50 USD this time last year, as of today the price is about 20.13 per share. Intel appears to be valued as a commodity supply company nowadays by some investors, while Nvidia’s outlook remains within the auspices of a highly anticipated technological future. Where will both companies values be this time next year?

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Summer Optimism as Forex and Equities Focus on Fall Outlooks

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Summer Optimism as Forex and Equities Focus on Fall Outlooks

Fed Chairman Jerome Powell admitted the obvious at the Kansas City’s Fed’s Jackson Hole Symposium last Friday. The realization the U.S Federal Reserve is going to cut interest rates confirmed what many financial institutions had positioned their trading desks for via forward cash Forex contracts over the past month.

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USD Cash Index One Year Chart on the 27th August 2024

The USD has been expected to grow weaker by many people because most knew the Fed would have to state a September rate cut would be delivered. The question that was also somewhat answered is the notion if the Fed will also cut in November. Though Powell certainly did not say a rate cut would happen in November, his rhetoric made it clear the Federal Reserve is considering a dovish perspective which could translate into additional cuts down the road.

The Fed has been criticized for being too passive and while Powell can be congratulated for his rather unemotional Federal Reserve leadership, he and the Fed can certainly be faulted for not reacting quickly enough to ‘transitory’ inflation and then not responding until this past weekend to the need for cutting interest rates with dovish rhetoric. Let’s also remember the U.S Treasury (government) is on the line to pay exorbitant costs for debt repayments because of bad U.S fiscal policy.

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As an interesting related side note, the head of the Brazilian Central Bank, Roberto Campos Neto, made a strong appeal for governments to be fiscally responsible while speaking at the Jackson Hole Symposium this past weekend. While he could have been talking to any number of nations regarding spending, his points were obviously meant to highlight his disagreements with the Brazilian government led by Lula da Silva and the Workers Party. Roberto Campos-Neto stated that approximately 50,000,000 (yes, million) people in Brazil receive government allowances, while only about 43,000,000 people are earning money via employment and business enterprises. Traders who want to keep an eye on the USD/BRL this week may be entertained by the potential volatility within the currency pair which is trading a hair below 5.5000 before it opens today. The USD/BRL has certainly not been correlating to broad Forex USD centric weakness, and demonstrates the internal domestic fight between Lula da Silva and the Brazilian Central Bank regarding fiscal policy.

Jobs data from the U.S has continued to turn negative, particularly via revised reports which are being published rather ‘quietly’ as election season approaches. Yet, financial institutions have been aware of the weaker jobs numbers. While the poor jobs numbers combined with eroding inflation is good for USD centric weakness due to the knowledge the Fed will have to reverse from its rather high interest rates, the question becomes how much per the financial institutions selling of the USD has been acted upon in Forex. Is the USD oversold for the time being? It depends on trading timeframes certainly.

Weaker USD centric positions will need more impetus for further bearish trajectories to be seen near-term. Financial institutions may believe equilibrium is being approached, this because it appears interest rate cuts equaling a 0.50% decline seem to have been factored into Forex. Will the Federal Reserve be put into a position in which they will be able to cut by a full basis point (-1.00%) over the next six months?

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Gold Six Month Chart on the 27th of August 2024

Gold is trading near 2,500.00 plus at the time of this writing. Gold has touched higher levels in the past week and is getting a round of applause from its throngs of believers who proclaim the precious metal the ultimate safe haven against inflation and erosion fears via fiat currencies – including the USD. As a reminder, Bitcoin is highly speculative and doesn’t have the historical (thousands of years) track record that gold has acquired.

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GBP/USD Five Year Chart on the 27th of August 2024

The EUR and GBP are traversing higher territories not seen in a while. The EUR/USD is near the 1.11700 level, which was last traded in July of 2023, and it has been since 2022 that sustained prices above this current realm have been traded. The GBP/USD is near 1.32000 and is within a value ratio last seen in March of 2022. Central banks will remain in focus as summer ends and the fall trading season gets underway. The ECB will release their Main Refinancing Rate on the 12th of September, the Fed will present the Federal Funds Rate on the 18th, and the BoE will follow suit with the Official Bank Rate on the 19th.

However, those September dates are still a few weeks away and financial institutions do have data this week which could stir Forex, equity indices and U.S Treasuries in the near-term. Day traders often do not have the ability to rely upon mid and long-term outlooks, and instead have to be content with trying to ride the momentum trends being caused by larger players. While the USD weaker outlook is tempting to rely upon, speculators who are looking for quick hitting wagers need to judge technical charts and try to grasp existing behavioral sentiment which can shift rapidly depending on lengths of time.

Traders should remember the U.S will celebrate its Labor Day holiday next Monday, which sets the stage for potential sudden volatility to flourish before big financial institutions in the States leave for their long weekend. The last week of August should be rather tranquil. Certainly most long-term investors feel as if they have more clarity regarding interest rates and will be able to relax. The hope is that the current calm is not the quiet before the storm due to lingering political issues in the U.S, France and elsewhere. And that escalation of the Ukrainian and Russia war, and the Middle East conflict do not cause sudden surges of bedlam.

Economic data events the remainder of this week that should be given consideration includes the U.S CB Consumer Sentiment reading today. Yesterday’s U.S Durable Goods Orders came in with mixed results as the Core number fell by minus -0.2%, but the broad number came in with a substantial gain of 9.9%.

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USD/JPY Three Month Chart on the 27th of August 2024

The Bank of Japan has published their Core CPI data today and the outcome came in below expectations with a gain of 1.8% compared to the estimate of 2.1%. The USD/JPY is trading near 144.790 at the time of this writing as it continues to show bearish tendencies. The Bank of Japan which was heavily criticized in many circles may actually be achieving what they have planned, this as they have tried to stimulate stronger export and confront inflation. Their battle is not over yet.

Australian CPI data will be published on Wednesday. And on Thursday, German Preliminary Consumer Price Index numbers will be released. The EUR/USD could react to this report, but the European Single Currency remains highly USD centric. Which sets the table for the U.S Prelim Gross Domestic Product report also on Thursday. The growth number from the U.S could diminish selling considerations for the USD if the report comes in stronger than expected. However, the GDP Price Index and weekly Unemployment Claims from the U.S could also impact short-term behavioral sentiment and cause a bit of turbulence if negative results are published.

Friday will see more CPI numbers from Japan, CPI and GDP numbers from France, and GDP data from Canada. But before going into the long holiday weekend the U.S will present one more major report with its Core PCE Price Index and the monthly statistic is expected to show a slight gain of 0.2%.

China watchers will get Manufacturing PMI numbers early on Saturday. Recent China data continues to show signs of economic stress regarding foreign investment, domestic consumer spending, and deflationary results. Buyers beware.

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U.S Growth (Lack of it) and Inflation Report Key to End of Week

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

U.S Growth (Lack of it) and Inflation Report Key to End of Week

Day traders may believe they are being confronted by another wave of data and news which is going to make their endeavors more difficult. The announcement by Joe Biden that he will not run for re-election in November however was not a major surprise. The handwriting on the proverbial wall has been clear for nearly a month that Biden was under immense pressure to step aside. It appears Kamala Harris will get the Democratic nomination per reports that delegates are starting to pledge their loyalty.

Financial markets which may have been interpreted yesterday as cautious due to the Biden and Harris news may actually not have had a tremendous effect. It is quite possible investors and traders have started to position their assets for a Trump victory. Love him or hate him, the polling numbers appear to suggest the Republicans are potentially going to win big in November. Except the word November is the key, there are still over 100 days for things to go wrong for the Republicans. Nothing is settled and day traders need to understand that a lot can change. Economic data from the U.S will be plentiful in the coming days. Also, China has lowered key borrowing costs in an effort to try and fuel spending in the nation as consumers remain hesitant and a sign the nation is battling a troubling economy.

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EUR/USD Five Day Chart on the 23rd July 2024

Traders who have been trying their hand in Forex have seen the EUR/USD and GBP/USD sink in value via short-term price changes. While retail speculators may look at the moves over the past day as vicious, they should note that since Wednesday of last week the USD has been stronger in Forex. It is doubtful financial institutions were betting on Biden to drop out of the race last week or for China to lower their interest rates. What in fact might be playing out is the possibility that most financial institutions believe the USD had been oversold and now want to position for the economic statistics coming this week. Results this week will help motivate notions the Federal Reserve will have to become dovish in September and proclaim a weaker U.S economic outlook through the end of this year, or for more idle chatter as the Fed undertakes a soundtrack which pleads for caution if inflation numbers remain stubborn.

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USD/CNY One Year Chart on the 23rd July 2024

Monday, 22nd July, China One and Five Year Loan Prime Rates – borrowing costs were cut officially yesterday. The interest rate reductions of 0.10% were small, but China hopes this change helps propel stimulus for its struggling economy. It may not. But before folks sell China short, the nation continues to be a dynamic economic and political force and this power is not going to abate soon. The USD/CNY has incrementally risen since the start of 2024, but it is still below the higher values seen from August into early November of last year. It seems possible the Chinese government will continue to allow the Yuan to lose value in an attempt to reignite export.

Tuesday, 23rd July, U.S Existing Home Sales – the past few months have seen a decrease in the housing data. However, last month’s outcome was stronger than anticipated. These numbers tend to get a lot of fanfare, because they are a solid barometer of U.S outlook regarding interest rates and potential inflation. If folks feel like they should not sell their homes because their current payments are cheaper via their existing mortgages compared to taking on higher costs which are being offered now due to more expensive interest rates, this causes existing home sales to often fall. This because those with homes are not looking to move and simply want to stay in place, also making the potential of finding a house for folks who want to enter the market a more expensive proposition. Again, the outcome of this data is more of a barometer and doesn’t tend to affect financial markets like equities or Forex too much.

Wednesday, 24th July, Europe Manufacturing and Services PMI – E.U nations and the U.K will publish their readings. Last week the ECB kept their key lending rate in place. Political questions still linger in France which is more of a thorn in the side of the E.U than the potential outcome of these data reports. France and Germany expect better results from the Manufacturing and Services numbers. The broad E.U estimate also is optimistic about better results. Great Britain too is expecting better numbers. However, Forex traders will likely be more focused on coming U.S data and stay in a USD centric mindset the remainder of the week when making their forward considerations. And it should be noted the E.U and U.K economies are still struggling.

Wednesday, 24th July, U.S Manufacturing and Services PMI – these reports will be important certainly regarding the sentiment of Purchasing Managers, but the index reading may not be the biggest thing on investors minds. U.S data statistics on Thursday and Friday will be the outcomes that are being prepared for regarding potential affects. The Manufacturing number is expected to match the previous result, the Services figure is anticipated to be weaker.

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U.S Dollar Index Six Month Chart on the 23rd July 2024

Thursday, 25th July, U.S Advance GDP and Advance GDP Price Index – last month’s growth number came in below expectations, this GDP number is anticipated to produce slightly better numbers. The U.S economy via data has been showing signs of slowing the past few months and this Gross Domestic Product number is going to get a lot of airplay not only because of investors who will use it as an outlook because they believe the Fed will be paying attention, but also because the GDP result will start to become a political football for the Republicans and Democrats. If the growth numbers are weaker than anticipated this could propel USD centric weakness. However, day traders need to keep their eyes on the GDP Price Index stats too – if the inflation report comes in below expectations this could also fuel USD selling. Day traders need to pay attention to the USD Index charts later this week. While the short-term has seen some bullishness, the range of the USD remains near important support levels via a six month perspective and as the Fed comes under more scrutiny, traders should expect more tests in the near-term.

Friday, 26th July, U.S Core PCE Price Index – last month’s report matched expectations. If this inflation number meets the anticipated outcome, or comes in below the estimate this could sustain USD centric bearish momentum into the weekend and early next week.

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AMT Top Ten Miscellaneous Remarks for the 14th of July 2024

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Remarks for the 14th of July 2024

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10. Words of the Day: Political rhetoric is using platitudes and subterfuge camouflaging verbal nonsense, masking a vacuum of non-results and causing fatigue of populist promises.

9. Harris Prediction: After the NATO press conference in which Biden was more lucid but still made mistakes, it is beginning to feel like Kamala Harris is being given room to audition for the Presidency by the Democratic machine. If her polling numbers show improvement over the next couple of weeks, look for Harris to replace Biden at the DNC in Chicago, if her polling numbers are not good enough in the eyes of the elite power brokers, it is possible Biden may be asked to give up his delegates, allowing for an open convention.

8: Zombie Inflation: Data results via the U.S CPI caused a reaction in the broad markets, and volatility in Forex. While the broad monthly Consumer Price Index number on Thursday was minus -0.1%, the PPI numbers on Friday came in higher than expected causing some to feel that inflation remains a plague. However, if the Producer Price Index was interpreted as being higher because rising prices are coming via more expensive employee costs (which might see an end to the cycle sooner rather than later if jobs data continues to weaken) this is why there might not have been a violent Forex reversal on Friday. And Consumer Sentiment numbers from the University of Michigan came in below expectations again, and inflation expectations via the consumer survey showed some erosion.

7. Federal Fund Rates: Financial institutions have clearly begun to factor in the belief an interest rate cut will occur in September. The Fed which has been cautious consistently the past seven months may now have enough ammunition to consider becoming more dovish. A September interest rate cut has certainly been factored into Forex and Treasury yields, and there is a growing tide of sentiment which believes the weaker GDP numbers combined with the potential of less inflation could spark additional Federal Funds Rate cuts this calendar year. Outlook fueled by optimism regarding a more dovish Fed could be a factor in the markets the remainder of July.

6. Gold and Silver: Commodity prices are soaring as speculators pursue bullish trends. Gold finished this week above 2,410.00 USD. Silver is traversing above 30.00 USD per ounce for the first time since 2011 and 2012. These two metals are not always correlated, and day traders should remember Silver remains a rather easily mined commodity which sometimes influences downwards pressure because supply can be increased. Having said that, Gold and Silver have had solid bullish trends since February of this year.

5. Thaw: Bitcoin is near 60,000 as of this writing. The crypto winter has seemingly ended and many folks are standing in the sunlight and proclaiming long-term projections of Bitcoin as it maintains a higher price range. It should be remembered the most significant percentage of trading volumes within cryptos reside heavily within the top tier, and the ‘assets’ ranked lower remain in wagering cesspools. Cryptocurrency remains speculatively dangerous, and largely a place to move illicit cash with the perception the money can be kept ‘dark’.

4. USD/JPY: The Bank of Japan won last week’s game of fire. The U.S Consumer Price Index numbers dealt a blow to the blind fury of speculative buying in the USD/JPY, and there is also a belief among many that the BoJ added onto the selling momentum of the currency pair too with a well timed intervention. The currency pair which was near the 161.640 juncture suddenly dived to nearly 157.420. The USD/JPY has gone into this weekend near the 157.900 ratio. The USD/JPY saga is not finished yet, and froth via bullish endeavors remains dangerous. Day traders here have been warned.

3. China: Friday’s Trade Balance numbers were good, compared to the rather weak CPI results seen on the 10th of July which were negative. China’s Communist Central Committee begins a Plenary Session tomorrow until the 18th. Will they speak in platitudes? The USD/CNY has certainly seen a ‘soft’ devaluation since February of this year, but the currency pair did go into the weekend near the 7.2500 mark which is off the high of 7.2765 seen this past Thursday. China still must improve consumer sentiment domestically and this remains a difficult struggle as ramifications from the implosion in China housing values mires the landscape. GDP numbers will come from the nation on Monday.

2. Behavioral Sentiment: Equities and indices, Forex, and commodities are all experiencing risk appetite permutations. While it might be tempting for retail traders to bet on lower reversals of trends, sometimes its much easier to simply ride optimistic waves. Certainly there will be days when financial assets struggle, but the apex heights of the Dow Jones 30, S&P 500, Nasdaq 100 should be treated with respect. Treasury yields are at mid-term depths and appear ready to traverse lower.

1. Trump: The attempted assassination of Donald Trump on Saturday in Pennsylvania will galvanize his supporters and likely push many people towards voting for him November. The amount of vitriol Trump has endured from his political opponents including the highest echelons of the Democrats and many in the media needs to be contemplated and quieted. Opposition to political ideology is fine, but the use of hyperbolic musings has led the U.S to a dangerous place. It would be wise for pragmatic adults to rejoin political discourse. Traders should watch the financial markets early this week to see if the U.S political front causes a reaction.

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AMT Top Ten Miscellaneous Fireworks for the 5th of July 2024

by with No Comment AMT MarketsAssetsFeatured Highlights

AMT Top Ten Miscellaneous Fireworks for the 5th of July 2024

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10. Grudge: Ireland and the Springboks begin their rugby two match competition this Saturday in Loftus Stadium, Pretoria. Anticipation is palpable in South Africa. The weather is forecast to be good and the game is expected to be better. The battle between the Green Machines is real. The second game will be played on the 13th of July in Durban.

9. Digital Jitters: Bitcoin is trading near 54,300.00 USD as of this writing. As analysis filters in to explain this particular downturn which essentially began on the 7th of June, the fact is that BTC/USD has become a playground for institutional gamblers while many in the public remain dubious. Excuses such as the U.S election potential outcome and Fed monetary policy are all likely false narratives. Speculation is your answer.

8. Correlations: The USD/ZAR is near the 18.20500 mark, and the USD/MXN is around 18.06000 as of this morning. The South African Rand and Mexican Peso are not correlated, except as currencies that are witnessing a strong amount of political sentiment generate trading behavior in financial institutions which are trying to judge their long-term outlooks. The coalition National Unity Government of South Africa, and the Morena political party of Mexico are in the spotlights and are being watched by anxious investors.

7. National Security: The race for quantum supremacy is real as nations issue significant controls over the export of computing mechanisms to unfriendly competitors as reported by the New Scientist website recently. And the smuggling of semiconductors which are ‘forbidden’ to China who are using organized underground operations in order that Nvidia AI processors can be obtained, was reported on by the Wall Street Journal two days ago.

6. Commodities: WTI Crude Oil is trading above 84.00 USD, the energy has sustained prices above $80.00 since the 17th of June and is approaching mid-term highs, the slight rise in price earlier this week may have been because of hurricane concerns, but buyers have remained strong this morning. Cocoa is still traversing around 8,456.00 USD per metric ton, as it bounces along mid-term technical support levels. In early January of this year Cocoa was trading at half its current value.

5. Jobs Numbers: One of the favorite tools used by salespeople to get day traders geared towards speculating blindly are the monthly U.S Non-Farm Employment Change numbers which will be published today. But because of the U.S Independence Day yesterday, many financial institutions are celebrating a long holiday weekend and will be mostly inactive. Data has become increasingly lackluster from the U.S the past two months with rather pessimistic GDP, PMI manufacturing and services outcomes. Traders considering a dip of their toes into the markets today should be aware that volumes are going to be low which opens the door for volatility. Who will be paying attention to the Average Hourly Earnings report?

4. Markets: U.S Treasury yields are within sight of three month lows, this as the major stock indices via the S&P 500 and Nasdaq 100 make noise at record highs. The Dow 30 is not at a high but within a healthy territory as bullish behavioral sentiment remains rather abundant. When full trading volumes return next week, there is reason to believe the summer rally may continue.

3. Bank of Japan: The USD/JPY is trading below the 161.000 level. Some analysts suspect the BoJ engaged in a limited intervention earlier this week when the currency pair approached the 162.000 vicinity. The Bank of Japan is playing a dangerous game with speculators. The next BoJ Outlook Report is not due until the 31st of July. Until then the USD/JPY apparently is going to traverse in a higher price range with the threat of a potentially engaged Bank of Japan lurking which can punish speculators if they get too comfortable betting on the bullish trend. The price of Gold should be watched as it traverses around 2,365.00 USD, which remains in sight of record highs that touched the 2,425.00 vicinity on the 20th of May. Retail purchasing of gold in Asia is strong as citizens of some nations try to hedge against inflation.

2. Fallout: The Presidency of Joe Biden remains vulnerable as media pundits who have long supported him lurch towards public criticism, and question Biden’s inability to handle unscripted situations. Talk of replacing Biden with another candidate to face Donald Trump remains fever pitched, but there are strong obstacles which will not allow an easy path to unseat the current President. Biden owns his delegates won via Primary voting. He would have to officially relinquish his delegates at the Democratic National Convention in order to allow for a new candidate. The Democratic political party also knows that Vice President Kamala Harris is not particularly well liked, but if Biden were pushed to the side it would open the door for a potentially messy challenge by Harris who would certainly want the Presidency. Getting her to bow out of the race could be another potential disaster for the Democrats, and help create a level of disdain which could trigger a huge landslide for the Republicans in November.

1. Trouncing: Political incompetence is not only a stronghold in the U.S, this as the U.K and France are proving. The GBP/USD is near 1.27685 as of this writing, the EUR/USD is around 1.08230. Both currency pairs have gained this week. The massive defeat of the Conservatives in the U.K last night, and Macron’s political weakness which may increase after the 2nd round of voting this coming Sunday in France has been digested by financial institutions. The GBP/USD and EUR/USD were punished over the past few weeks due to knowledge that the Tories in Britain would suffer a resounding humiliation, and the belief that Macron opened the door for a loss of clout. Financial institutions have proven they are keen observers of politics and are accustomed to shifts of direction via new forces. Some may also say that financial institutions are comfortable as long as they know where power resides in the ‘deep state’ bureaucracies of every nation.

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AMT Top Ten Miscellaneous Punches for the 28th of June 2024

by with No Comment CommoditiesCorporateCryptocurrencies

AMT Top Ten Miscellaneous Punches for the 28th of June 2024

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10. Cricket: The ICC T20 World Cup Championship will feature South Africa vs. India. The two teams are familiar with each other competitively and the final match will be held at the Kensington Oval in Bridgetown, Barbados on Saturday.

9. Selling Pressure: Lows are being challenged in Bitcoin as it hovers above 61,000.00 USD. Cocoa has stumbled dramatically this week and is below 8,000.00 per metric ton. Who will be courageous and wager on reversals higher? Speculators should remain cautious and understand price velocity that looks tantalizing can also prove costly to trading accounts.

8. Grounded: Boeing’s Starliner remains docked to the International Space Station. Problems have plagued The Boeing Company the past handful of months, and their ambitions of becoming a power within NASA’s explorations are also underachieving. SpaceX and Airbus are certainly paying attention to Boeing’s ineffectiveness.

7. Teetering: The African National Congress and Democratic Alliance political parties in South Africa are feuding about how coalition power will be shared within the National Unity Government. The USD/ZAR has become volatile and is near 18.21000 as tensions mount and reversals hit. Financial institutions are waiting for an optimistic resolution, while also fearing the possibility of an abandonment to positive visions.

6. Inflation: Core Personal Consumer Expenditures Price Index statistics will be released today from the U.S. Yesterday’s GDP Price Index came in slightly higher than anticipated which kept USD centric bullish positions relatively strong. However, other American statistics have weakened significantly and the mid-term looks troubling for the U.S economically. Stagflation remains a concern. The Federal Reserve is likely hoping to see today’s PCE numbers come in weaker than expected, which would allow the central bank to hint towards Federal Fund Rate cuts later this year.

5. Ennui: President Macron could find his political power further eclipsed after France’s first round voting results this coming Sunday. French voters appear ready to deliver a resounding message of dissatisfaction to the listless ruling government. Election turnout statistics should be watched. The second round of voting will be on the 7th of July. Financial institutions have braced for a shift of power already, but the EUR/USD will still produce volatility in the days ahead.

4. Geopolitical Risks: Russia, China and their allies are likely considering how they will prepare for a potential change in the U.S White House. Foreign policy following last night’s debate between Biden and Trump must be planned. The fact that Trump is viewed as a rather flamboyant personality and not bound by cautious diplomatic attitudes creates a calculus that U.S adversaries will have to consider. While the potential exists that some nations may try to be more aggressive now, they also know that a Trump victory in November would change the international political landscape long-term.

3. Bank of Japan: The Core Tokyo Consumer Price Index produced a gain of 2.1%, which was above the forecasted amount of 2.0% earlier today. The BoJ continues to remain far too dovish regarding interest rate policy and financial institutions are buying the USD/JPY in massive waves. The USD/JPY is around 160.750 as of this writing and did traverse above 161.000 earlier, these are Forex levels not seen since the late 1980’s for the USD/JPY. Japan’s attempt to stimulate the economy with a weaker Japanese Yen may work, but the U.S and others may start to look at the BoJ’s soft devaluation in a very negative light. Speculators of the currency pair need to be extremely careful, because the BoJ has the ability to intervene violently and cause momentary spikes which could prove deadly for day traders trying to take advantage of the outlandish bullish trend.

2. Behavioral Sentiment: Markets will be a looking glass into the future today, this as trading houses react to the realization that Donald Trump is likely going to be the next U.S President. While there are no guarantees regarding the U.S election outcome yet, the broad markets will certainly feel a shift of momentum in the coming days as large players adjust from a cautious approach to more aggressive postures regarding a Trump presidency. U.S equity indices remain near record highs, and the potential of a more business friendly White House which doesn’t threaten tax hikes on U.S corporations will likely affect speculative outlooks.

1. Power: The resounding defeat of Joe Biden last night in the Presidential debate will spark a heated battle among Democratic power brokers. Biden will certainly be asked to step aside after last night’s poor performance. However, Biden is stubborn, and Dem leaders like Nancy Pelosi and Barak Obama among others will have a difficult task to try and convince Biden for the sake of the nation that he must do the honorable thing and release his political delegates at the August Democratic National Convention in Chicago. If this doesn’t happen, the Republicans may be able to achieve a landslide victory by taking control of not only the White House but the Senate too, along with maintaining power in the House of Representatives. All the camouflage in the world last night, including the liberal media, couldn’t mask the inability of Joe Biden to be coherent.

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The Oldest Hate: Why The Hague Needs to Convict Israel

by with No Comment Featured HighlightsRisk AnalysisWorld

The Oldest Hate: Why The Hague Needs to Convict Israel

Opinion: The following article is commentary and its views are solely those of the author. This article was first published the 14th of June via The Angry Demagogue.

The oldest hate is also the most frustrating hate – why is there antisemitism and why does it never end?  All the reasons to hate the Jews have been refuted by Jewish actions. We are filthy capitalists and then communists. We are separatists and then assimilationists. We are stateless and we have a state. The list goes on and on and we can come to the conclusion that there is no answer.

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The late Lutheran Pastor turned Catholic Priest, Richard John Neuhaus said years ago – I paraphrase as I don’t remember the exact quite – if you don’t like Christian America, just wait until you get post-Christian America. No one can doubt that for centuries Christianity was the source of antisemitism in the European continent as Jews were the easy scapegoats to everything from the Plague to economic crashes. But with the dawn of the scientific age, Christian antisemitism lost its cache along with Christianity itself. What we are dealing with now is an antisemitism of the nihilists.

The nihilists are those anti-semites who, like the operettist Wagner and the philosophers Karl Marx and Voltaire started a trend that reached it climax with Nazi and Stalinist totalitarianism and has now made a comeback with a combination of Islamist and progressive ideologies which are all based on the glorification of violence and cruelty that we see in ISIS, Hamas, Fatah, Al-Qaeda and now manifesting itself in America’s great cities and universities. The question still remains – why do all of these seemingly contradictory ideas all converge in anti-semitism?  

The answer, it seems to me lies in exactly that one international body that was created in the wake of the actions of greatest and most horrible of anti-semitic regimes – the Nazi perpetrators of the Holocaust. The Western world – the modern Christian west, led by the United States, felt it needed laws of war and international bodies that would continue the work of the Nuremberg Trials and make sure all those who would perpetrate genocide would, eventually, be brought to justice. That these bodies have failed miserably is proven by the genocides in Rwanda and Cambodia, the mass murders going on in Sudan and other parts of Africa, the genocide, still ongoing of Sunni Muslims in Syria and the Chinese incarceration in concentration camps (and who knows what else?) of the Uyghurs. 

So why Israel? Why is Israel, why are the Jews the main enemies of the new nihilists?

The enemy is the moral code that the Bible brought into the world – a code that protected slaves from cruel behavior, a code that did not allow the rape of women captured in war, a code that limited the number of horses and wives a king could have, a code with laws of war. Maimonides, writing in the middle ages in Spain and then Egypt, has a whole section of his Code on the laws of kings and war.  Jews didn’t always follow the law and the books of Joshua and Judges are filled with difficult passages but the commandments were there, nonetheless.

Hugo Grotius, writing in the 16th and 17th century developed Just War theory based on Christian thinking and that has formed the basis of the international laws of warfare ever since. This certainly would not have happened without the Bible and the codes that followed it and this is what the nihilists hate most of all.  

Israel is at the heart of the progressive Western, radical Islamic, pan-Slavic and Communist revolt against the containment of violence, cruelty and bloodlust under the rubric of a higher moral law. Maybe it is true that man’s natural state is war, as Hobbes believed.  Maybe Heraclitus is right that “war is the father of us all and our king” and maybe as he continued, it “discloses who is godlike and who is but a man” but the Judeo-Christian tradition taught us that we need to overcome this nature and to live with a moral code that can overcome it and change what it means to be “godlike”.   

The “court” in the Hague represents that pagan and nihilistic outlook on life and the desire to return to a time where violence and cruelty is unregulated, where war can be fought without the rules that the Jews foisted onto mankind. Camille Paglia writes in her magnum oppose “Sexual Personae” that society is the “defense against nature’s power”. Without society and the moral and behavioral codes that make it up, Paglia writes, we would be” storm-tossed on the barbarous sea that is nature”.

Convicting Israel of violating the very laws it itself created will finally put an end to the “farce that is morality” according to the nihilists and return us to that “barbarous sea that is nature”. The destruction of Israel will allow the world to finally defeat that 3,000 year old code that we call the Judeo-Christian heritage that prohibits the nihilists from living as they wish. The Hague needs to convict Israel and the woke left along with radical Islam need to finish the job on the battlefield so that they can return to their beloved state of nature.

They hate the Jews now because we have provided them with the framework to be civilized and they hate civilization most of all.  

Israel will be convicted in the Hague because to find it innocent means the nihilists will be shackled to a morality that prevents them from cruelly murdering, raping and destroying as they please. It means that Hollywood will not be able to continue glorifying the dismemberment of children in their “realistic” crime dramas. It means the universities will have to teach of truth and beauty and not perpetuate the bloody ideologies it loves. It means that they will have to subordinate their beloved blood thirsty ideologies to that horrible bourgeois virtue, human kindness.

Disclaimer: the views expressed in this opinion article are solely those of the author, and not necessarily the opinions reflected by angrymetatraders.com or its associated parties.

You can follow Ira Slomowitz via The Angry Demagogue on Substack https://iraslomowitz.substack.com/

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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.