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AMT Top Ten Miscellaneous Intrigues for the 17th of May 2024

AMT Top Ten Miscellaneous Intrigues for the 17th of May 2024

10. Georgia and Slovakia: It would we wise to pay attention to Tbilisi demonstrations, and also cast an eye on Bratislava after the assassination attempt of Prime Minister Fico. Russia is certainly paying attention.

9. Superconductivity: Origin Quantum Computing Technology of China is making solid advancements and has announced they are ready to domestically produce a 72 qubit capable microwave module known as ‘Origin Wukong’. The battle to create efficient quantum components and operating systems between China, the U.S and others is real.

8. Secretary of Music: Anthony Blinken’s naive decision to play guitar in a Kiev nightclub this week is comparable to Nero playing music while Rome burned. U.S foreign policy continues to raise concerned eyebrows from friends and foes alike.

7. South African Election: The coming vote on the 29th of May is less than two weeks away. USD/ZAR as of this writing is near 18.22000, where will it be on the 30th of May?

6. Biden and Trump: The potential for debates between the two presidential candidates is growing. One question observers may be wondering is if there is adequate supply of caffeine to keep Joe energetic and ample enough hairspray for Donald to look under control?

5. GameStop: Yet another market manipulation of GME is causing massive losses for day traders. The price for the stock finished near $27.67 yesterday, this after touching a high above $56.00 on the 14th of May. GME was close to $10.00 on the 15th of April. Buyers that get in too late to these betting schemes created by frenzied crowds tend to go bust as the early manipulators cash out their profits.

4. Commodities: Cocoa is near 7560.0 USD per metric ton, and Coffee Arabica is traversing slightly below 200.00 USD. Speculative forces remain powerful in both and while they are likely still overpriced, risk management is imperative for those pursuing lower values.

3. Federal Reserve: After the weaker than anticipated CPI numbers printed this Wednesday, and last week’s eroding GDP growth statistics, financial institutions are increasing their risk appetite as they watch U.S Treasury yields decline and consider a mid-term outlook which is allowing for the contemplation of actual Federal Funds Rate cuts.

2. Forex: The EUR/USD is back above the 1.08000 level comfortably, and the GBP/USD has found sustainable trading beyond the 1.26000 ratio. While the major currencies versus the USD have pulled back slightly from near-term highs, large commercial traders are exhibiting risk appetite. A weaker USD centric notion is coming into vogue again.

1. Apex Equities: The three major U.S indices are all near record territories as solid earnings reports from corporations, amidst hopes the Federal Reserve will be able to cut rates a couple of times this year has combined to allow optimism to grow in the S&P 500, Dow 30 and Nasdaq 100. While the U.S public is starting to show they are losing confidence because of escalating consumer prices, financial institutions are wagering on solid returns via economic outlooks. Day traders looking to join the indices parade should make sure they limit their exposure, particularly if they are using CFDs and relying on short-term climbs which can suffer from sudden reversals lower.

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

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

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

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

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

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

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

Gold One Month Chart as of 29th April 2024

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

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

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

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

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

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

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

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Speculative Notions: Gold and the USD as the Casino Lives

Speculative Notions: Gold and the USD as the Casino Lives

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

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

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

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

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

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

Gold One Year Chart as of 23rd April 2024

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

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

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

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

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

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

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

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

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

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

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

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Retail Traders Caught Out by Shifting Sentiment as Data Hits

Retail Traders Caught Out by Shifting Sentiment as Data Hits

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

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

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

Gold Five Day Chart as of 15th April 2024

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

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

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

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

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

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

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

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

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

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

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Iran Front and Center: 60 Tons of Explosives Sent Towards Israel

Iran Front and Center: 60 Tons of Explosives Sent Towards Israel

The Israel-Iran War is soon to enter its 7th month even though last night was the first face to face confrontation between the two countries.

There was much less panic in the air on the “Israeli street” than one would expect after Iranian threats over the last week. I was clearly wrong in my assessment that Iran would not want to start something big with Israel and risk having a chunk of their strategic power degraded but it is hard predicting what fanatics will do. The question is if the utter failure of the attack will bring Iran shame in the Muslim world or if the fact that they sent missiles and drones will be counted as a “victory” even if no damage was done to Israel. Or it could be that Iran was counting on Biden-Blinken holding back Israel from responding and sure enough, NBC is reporting exactly that:

President Joe Biden has privately expressed concern that Israeli Prime Minister Benjamin Netanyahu is trying to drag the U.S. more deeply into a broader conflict, according to three people familiar with his comments.

Last night at about 8:15pm IDF Homefront Command announced that all schools and all educational activity would be cancelled until further notice, angering parents everywhere. A few minutes later they announced that 10’s or hundreds of drones were launched from Iran and on their way to Israel. The news reported that it would take 8-10 hours to arrive, sparking this to make its round on the Whatsapp groups in this very interconnected country:

Google maps also cooperated:

Friends and family in Jerusalem and surrounding areas were awakened by alarms and scurried to the bomb shelters, children in their arms. There were alarms also in the West Bank, the Golan Heights and the Northern Negev dessert. Apparently, the main targets were two air force bases. One was hit by one missile and minor damage was done and the other was untouched. One 7 year old Bedouin girl was critically injured from pieces of a rocket that was shot down. The headline ought to read: Shiite Missile Critically Injures 7 year old Sunni Girl. 

The effectiveness of Israel’s air defense system seems to have surprised even the Israeli Air Force and special thanks has to be given to President Ronald Reagan for ignoring the comics and media (but I repeat myself) and many scientists and engineers (the experts!) as they made fun of his Strategic Defense Initiative and called it “Star Wars” – claiming that it was something undo-able and dangerous even to talk about.

Then Senator Joe Biden, using his favorite word, “provoke”, is quoted in this 1985 NY Times article:

Senator Joseph R. Biden Jr., Democrat of Delaware, pressed hard for reassurance about whether the proposed defensive weapons might be fired by mistake, thus provoking the Soviet Union to launch a real attack.
 

The Biden foreign policy theory for the last 40 years or more is based on not “provoking” your enemy, no matter the cost and appeasing your enemy at any cost.

Special thanks to the U.S armed forces who shot down numerous drones as did the U.K’s air force as well as Jordan’s. There might have been other Middle Eastern countries involved as there is an unofficial regional air defense system set up with Abraham Accord countries and others not part of the Accords. 100% of the suicide drones and 100% of the cruise missiles and 92% of the ballistic missiles were shot down by Israel’s layered “star wars” system. 

If the IRG is honest with themselves, they will understand that they have been defeated. A combination of 300 drones, cruise missiles and ballistic missiles were shot at Israel at once and no drones and no cruise missiles got through. Of the 110 ballistic missiles shot at Israel, 101 were intercepted and only one reached its target. Israeli defense firms closed higher in Tel Aviv Stock Exchange trading today. I imagine Iran’s potential clients are having second thoughts. China too, must be wondering about their own offensive and defensive systems.  

So where does this leave us now?

The War Cabinet assigned to Netanyahu, Gantz and Defense Minister Gallant needs to decide on an Israeli response. I am not sure that Israel has the firepower to destroy Iran’s nuclear sites on its own and there is almost no chance we will see U.S B52’s involved.

So the most obvious target is probably off the table.  It seems that the U.S Administration is pressuring Israel not to respond at all and to leave things as they are. This should not surprise anyone who has been awake for the last six months.

Israel and Iran have been at war for the last 6 months – one could say for the last two decades. This was clear to everyone except Biden-Blinken who could have shortened the war and the suffering by punishing Iran for their attacks on US sailors and soldiers.  Instead, they appeased Iran and released $10 billion to them essentially letting Iran hit Israel with this money.   

 The Scroll is reporting that:

We are now waiting to see how Israel responds. Although an unnamed “senior Israeli official” has been quoted promising a “significant response” to the attacks, Iran appears to have pre-cleared the attacks with the United States via the Oman diplomatic backchannel. And according to Roi Kais of Israel’s Kan News, a U.S. official told Saudi Arabia’s Al-Arabiya on Friday, “the United States will take part in the response to the Iranian response if Tehran escalates the situation inappropriately”—which means that the United States tacitly approved an appropriate level of Iranian escalation, such as, we don’t know, a “symbolic” drone-and-missile attack.

The United States has also, as Barack Ravid reported Friday, demanded to “have a say before decisions are made about any retaliation by Israel.”

If true, that is cynicism taken to the ‘Nth degree’. True enough, the United States needs to watch after its own national interests, but is it possible that the U.S government considers Iran its equal and Israel its vassal? Were Israel faced with a missile attack from China an argument could be made that U.S interests take precedence over Israel’s – but Iran? The Iranian economy is in shambles, the Rial is at record lows, its only economic lifeline comes from China, bankrupt Russia, the $10 billion Biden gave them and illegal activities. As Israel just showed– Iran’s vaunted missile force is worth less than advertised. We have not even spoken about the way it treats women and gays and how it treats opponents to its theocracy, how it spreads terror throughout the Middle East and Africa, how it helps Russia destroy Ukraine, how it is a key player in the global drug trade and money laundering.  

We have also not spoken about its foothold in the Western hemisphere and its attempts to infiltrate the United States itself via the porous southern border. 

Worst of all, if the Scroll story is correct, it shows how Biden-Blinken don’t understand what the office of the Presidency of the United States is. It is not just another head of state or head of government, but rather the President’s warnings ought always to be backed up with actions. Biden’s “Don’t Speech 2.0” was laughed at by Iran in public, for all to see. And the Biden-Blinken response is to tell Israel, “don’t”.

Ignoring Biden-Blinken for the moment, Israel must think deeply about its response. It is clear that any response will be followed by more of the same from Iran. Israel must think a few moves ahead and not just attack for the sake of attacking or it will be in the middle of yet another war of attrition. The end of the multiple rounds of attacks must leave Israel in better strategic shape than it is now and must leave Iran substantially weaker.

Whatever Israel decides to do, it must degrade Iran’s military capability by destroying its weapons and bases and killing as many IRG officers as possible. Israel should not bomb the power stations in Tehran or do other non-military strikes. Air force bases, missile silos and Iran’s navy should be targeted in such a way that degrades capabilities. They could start by sinking the Iranian spy ship that is helping the Houthis in the Red Sea.

Israelis seem to think that by “allowing” Iran to attack them it gives them many diplomatic credits, but we already know that these “credits” do not last long.  Whatever Israel does, it ought not to play the “message” game. Its attacks ought to provide tactical advantages in the coming months and not just “warnings to Iran” and “messages to Hezbollah”.

But let’s not ignore Biden-Blinken for a moment.  What if they decide to threaten Israel that if Israel retaliates the US will sit on their hands? 

This would be the time for Israel to do a little threatening of itself. The worst thing for a sitting President running for re-election is a summer gasoline price spike. Israel could certainly threaten to destroy Iran’s oil facilities and help push the price of oil. High gallon gasoline prices this summer will lose Biden more votes than he can gain in Dearborn, Michigan. In exchange for leaving Iran untouched, Israel can demand a free hand in Gaza, including Rafah as well as in Lebanon.  

Would that be worth letting Iran off the hook? It might. Iran was defeated in this battle, but it still believes it will win the war. Giving Israel free reign to destroy Hamas and then Hezbollah means that Iran will lose the war, too. Without Hezbollah, Iran will lose its most important asset in its overall goal of destroying Israel, chasing the US from the Middle East and establishing Shiite dominance in the region. It would turn October 7th into the day that Iran started on its road to defeat.

Israel needs to be opportunistic and aggressive in its dealings with its allies and its enemies. It has to let its allies know that it too is playing the long game and that it will not only hurt those who hurt it – as Netanyahu loves saying – but that it will destroy all who even try to harm it.

More importantly it needs to show its enemies with actions and not with words that threatening Israel means you will be destroyed. 

The Biden-Blinken team must be told in no uncertain terms that Israel is not a vassal.  The end result of this war cannot only be the destruction of Hamas, it must also be the destruction of the Islamic Republic of Iran as a regional power. By sending over nearly 60 tons of explosives to Israel, they have put themselves front and center.

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 Postings for the 5th of April 2024

AMT Top Ten Miscellaneous Postings for the 5th of April 2024

10. Petrichor: The pleasant smell after a rain has fallen following a long dry spell which elicits earth’s fragrance. The Fed is likely hoping for this sensation via ‘weaker’ Non-Farm Employment Change numbers today. In December the Federal Reserve spoke about data signals needed in order to cut interest rates. If jobs statistics are stronger than anticipated, there will be no ‘petrichor’ for the Fed.

9. Underreported: Five engineers from China on their way to work for the Dasu dam project they participated, were killed in a ‘suicide’ terrorist attack in Pakistan on the 26th of March. Terror attacks in Pakistan on Chinese involved with infrastructure ‘Economic Corridor’ work have been increasing.

8. Qubits: Microsoft and Quantinuum recently announced they have made breakthroughs regarding quantum computing research reliability. Results have shown 14,000 ‘test routines’ without errors. The emergence of quantum technology approaches.

7. Intrinsic Value: Cocoa is near 9640.0 USD per metric ton as of this morning and remains speculatively energetic. Bitcoin is slightly below 67,000 USD and continues to ‘beat’ the notion that intrinsic value is important.

6. Precious: Gold prices have ‘fallen’ below 2300.00 USD per ounce, and is near 2289.00 for the moment, but the metal is shining as crowds admire its ability to create a safe haven.

5. WTI Crude Oil: Middle East news is rumbling and hyperbole is resonating, the price of the commodity is over 86.40 USD per this writing. A calm weekend, and peaceful end to Ramadan this coming Tuesday might help calm nerves. Higher oil prices will not help global inflation.

4. Forex: The USD/JPY has started to experience waves of volatility and has recently challenged long-term highs. Bottom line is the notion that large players are positioning for today’s U.S data which will affect all financial assets as USD centric power resounds.

3. Equities: The U.S major stock indices are beginning their day near lows not seen since the 15th of March for the Dow 30, and the 19th of March for the S&P 500 and Nasdaq Composite. Nervous?

2. Bonds Watch: U.S Treasuries need to be monitored as the 5, 7, and 10-Years Notes respond to nervous investors and fears of a new ‘inversion’. Having come off of high yields a couple of days ago, doesn’t mean all is well as values languish near late September 2023 technical realms.

1. Data: Recent chatter from many Fed FOMC members have created anxious investors. Vivid reactions will occur after the Non-Farm Employment Change and Average Hourly Earnings. Bluntly, today’s jobs reports are crucial and the Fed would like the results to be weaker than anticipated in order to consider cutting interest rates. However, if hiring comes in stronger, it would be a sign of a resilient U.S economy and would ignite more USD strength. The first half hour following the jobs numbers may look counter-intuitive regarding price action as financial institutions adjust their trading positions.

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AMT Top Ten Miscellaneous Rays for the 15th of March 2024

AMT Top Ten Miscellaneous Rays for the 15th of March 2024

10. Argentina: President Javier Milei is practicing fiscal sanity. The health of the Argentine Peso has improved, and monthly inflation data has begun to show signs of erosion.

9. Copper: The commodity has shown a steady increase since the 9th of February and is challenging values last seen in April of 2023. Demand could signal better global economic outlooks emerging.

8. Gold: The precious metal is near 2167.00 USD which appears high momentarily, this as questions about USD near-term direction lurks and Forex remains choppy.

7. Aramco: Profits for the energy producer were an approximately 121 billion USD for 2023, this as Saudi Arabia is propelling the nation’s infrastructure towards an elite future.

6. Bubble Watch: Binance Coin is around 580.00 USD as of this writing. BNB/USD was near 200.00 in the middle of October 2023.

5. Centrists: Will the adults be allowed back into the political arena to govern and brush away populists?

4. Inflation: Consumer prices are causing pain and household arrears are growing. Total U.S credit card debt is estimated over 1 trillion USD by the Reserve Bank of New York.

3. China: New Home Prices are still losing value via data released today. And the Shanghai Composite Index is near 3050.00 which looks suspiciously like a member of the ‘too expensive club’.

2. Data: U.S Producer Price Index stats were sharply higher yesterday, while Retail Sales came in below estimates. University of Michigan Consumer Sentiment readings will be published today. The U.S economic outlook remains murky.

1. Prediction: Fed’s FOMC meeting next week will provide financial institutions cautious ‘vanilla’ remarks about monetary policy from Jerome Powell, meaning market conditions will likely continue to move sideways.

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Inflation Encore: Forex Traders Gathering Important Evidence

Inflation Encore: Forex Traders Gathering Important Evidence

The USD has been weaker against many major currencies the past week and inflation numbers coming from the U.S will test short-term outlooks. It should be remembered that in February before the CPI numbers were published, some who were leaning towards a weaker USD were traumatized after the stronger than anticipated results. However recent U.S economic data has shown a rather polite and distinct downturn.

Day traders should brace for drama today and understand that financial institutions will lead the way, either catapulting trends or stopping them in their tracks. As Forex speculators get set, Gold continues to also flirt with highs, as of this writing the precious metal is near 2175.00 USD. Financial assets from equity indices to digital assets (yes, Bitcoin) are experiencing frothy returns as values seemingly attract more capital inflows. In other words, bullish behavioral sentiment is rather strong and traders are reminded to stay realistic with their goals.

Again, there is a difference between quick hitting speculators trying to take advantage of robust trends compared to long-term investing. Day traders still need to do their homework and not bet blindly.

Gold Five Year Chart as of 12th March 2024.

Monday, 11th of March, Japan GDP – Gross Domestic Product numbers yesterday came in with unexpected weaker results showing a gain of only 0.1% compared to an anticipated 0.3% gain. Yes, the USD/JPY held onto it downwards momentum, which it has established since last week. The trading results in the currency pair suggest financial institutions are placing their faith in mid-term outlooks.

USD/JPY One Month Chart as of 12th March 2024

Tuesday, 12th of March, U.S Consumer Price Index – the inflation reports will headline and drive market conditions near-term. Last month’s numbers provoked a strong reaction when prices remained stubborn. The monthly core report is expected to show a slight decline today, but the monthly broad number is actually anticipated to rise slightly. With mixed statistics forecast already, day traders need to be prepared for a lot of noise – which may prove rather misguided. The problem for the markets today will come from the interpretation of the numbers, if the CPI figures can simply come close to their expectations this might keep conditions from getting wild, but choppy trading should certainly be counted upon leading up to and following the publication. This month’s encore of the CPI inflation numbers will hopefully be less dramatic than February’s performance.

GBP/USD One Month Chart as of 12th March 2024

Wednesday, 13th of March, U.K Gross Domestic Product – a gain of 0.2% is expected via the growth number. Last month’s minus -0.1% outcome should serve as a reminder tough economic conditions remain evident. Yet, last month’s number actually beat a worse expectation. GBP/USD traders who have been patient with their bullish stances have been rewarded recently. A slight gain in the GDP number from the U.K could help bolster additional confidence regarding mid-term outlooks for the GBP/USD. The BoE, like the U.S Federal Reserve, will make their monetary policy pronouncements next week.

Thursday, 14th of March, U.S PPI and Retail Sales – the Producer Price Index and consumer spending numbers may produce the surprise for the week regarding market reactions. The Core PPI results are expected to be weaker, while Retail Spending is anticipated to grow. If the inflation results via the PPI data is weaker than anticipated this could allow for further weakness in the USD to develop.

Friday, 15th of March, China New Home Sales – real estate values in the nation remain a focal point for analysis. Another large decline in prices for homes would not be good news. The economy of China is suffering from deflation which hasn’t shown evidence of diminishing soon. China remains a vital part of the global economy. Industrial Production numbers will come from the nation on Monday.

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AMT’s Dubious Dozen Forex March 2024 Sentiment Outlook

AMT's Dubious Dozen Forex March 2024 Sentiment Outlook

The Dubious Dozen is comprised of nations who are wealthy or should be, and face criticism because of domestic and sometimes international policies. As the reader you are free to differ from the AMT opinions, which are admittedly subjective. The ratings and outlooks are not delivered as trading advice, but as a viewpoint to inform. The work presented is a living document. The nations and currencies listed, and data and critiques shall change monthly according to points deemed important.

AMT Dubious Dozen March 2024 Forex Sentiment Outlook

AMT’s Dubious Dozen Monthly Forex Sentiment Outlook has a scaled ratings table, listing nations and currencies that are judged to have concerns regarding outlooks due to behavioral sentiment factors within financial institutions and among citizens, based on economics, transparency, and risk concerns about government fiscal policy, and ‘leanings’ toward autocracy. Metrics like inflation, gross domestic product, direct foreign investment information, debts and budgets, and foreign currency holdings which are gathered from various public sources will sometimes be presented.

AMT also tries to judge the trust level the citizens of the nations have in their domestic currencies via exchange rates, black market FX factors, and alternative assets held to guard against potential risks – like digital assets, cryptocurrencies, and gold.

A lack of credibility in a ‘fiat’ currency is dangerous and often leads to black markets for Forex in search of safe-haven currencies like the USD. The lack of a credible domestic currency also leads to price inflation because people selling goods fear the value of the domestic currency is losing value rapidly. Rampant inflation also leads to a desire to sidestep taxation on occasion.

Problematic inflation and inability to collect taxes may open the door for certain countries to contemplate and potentially initiate Central Bank Digital Currencies in order to control domestic economic activity. It is not a coincidence that China, Iran, among others are considering implementation of CBDC’s. The potential of CBDC’s by governments could allow for draconian laws for citizens of certain nations. The ability for a government to check on how all money is used via a centralized blockchain could lead to a more authoritarian landscape.

Quick Insights of the Dubious Dozen Nations Listed:

Argentine Peso (ARS): The election of President Javier Milei has started to ignite changes within fiscal policy and has created hope among international observers of a less corrupt Argentina. However, many obstacles still must be overcome by the newly elected leader and the government, and many economic issues will take patience from the public to improve. Patience has not been a classic virtue in Argentina, unless one considers the ability to accept massive corruption and go on with everyday life as a supreme power.

Brazilian Real (BRL):  Concerns regarding potential fiscal policy changes hover over the existing government which leans towards a socialistic bent and has shown a tendency to align itself with some of the most autocratic governments. Some businesses and investors are anxious about the potential of government mismanagement to develop under President Lula da Silva. The listing of Brazil will create catcalls from some, but the fear in some circles is what might happen if fiscal policy which is led by a socialistic government becomes too populist. For the moment the BRL appears to be under control, which is a good thing. However, the Brazilian Real should be kept in sight for any signs of nervousness.

Chinese Yuan (CNY): The domestic economy remains troubling and fragile. Deflation abounds. Manufacturing, electrical usage, real estate, export numbers should be monitored by observers. Government policy, and transparency reliability due to political control by the Communist Party is problematic. Concerns are causing a backlash among many foreign investors who are looking elsewhere for long-term business endeavors, when they have the ability to divest. Stats: IMF expected GDP for China in 2024 is 4.6% for 2024. China is suffering from current monthly deflation around minus – 0.80%.

Egyptian Pound (EGP): Corruption is problematic within national institutions, bureaucracy issues plague businesses due to interference. Central bank independence is in question as the government faces a litany of fiscal problems. Worries persist about a devaluation for the EGP in order to try and get inflation under control which is currently near 26.5%. The Egyptian Pound is viewed as highly vulnerable.

Iranian Rial (IRR): The nation remains mired under international sanctions. The government practices a heavy hand regarding domestic policies which carry the threat of prison and worse because of the ability to oppress the general population. The Iranian Revolutionary Guard which has several branches of ‘service’ helps the ruling government dominate and benefits monetarily, which makes the Iranian leadership and its ability to rule comparable to a mafia. The current inflation rate in Iran is estimated to be around 32.5%. Unemployment in Iran is estimated to be above 10% and 60% of the total economy is believed to be centralized by the government.

Nigerian Naira (NGN): Corruption remains a troubling part of Nigeria. Although it is a massive exporter of commodities including ‘energy’, and has a dynamic demographic, government policy is highly questionable. Nigeria’s GDP is estimated to be around 3.46% as of December 2023. A problem for Nigeria is its shadow/informal market economy, which is estimated to be nearly 58.2%. Corruption and an inability to legitimately collect taxes hurts the government’s finances and its citizens. The Nigerian Naira is weak and is losing credibility.

Pakistani Rupee (PKR): Economic concerns regarding export and import disparities are a major factor in the lack of foreign currency reserves. A new government has been elected in Pakistan which has been able to form a ruling coalition. Issues regarding corruption remain troubling. Pakistan has also formed a stronger relationship with China, particularly as they search for strong economic partnerships, but this may leave them vulnerable politically. The IMF is a large factor in the current valuation of the PKR. The currency has been stable for a handful of months but needs monitoring.

Russian Ruble (RUB): Although the war with the Ukraine battles on, Russia has found a way to continue to create growth within its economy even in the midst of sanctions. The nation has found other ways to trade and acquire products from abroad via ‘new’ trading channels largely coming from Central and Eastern Asian routes. Russia’s government is seen as highly one dimensional and rules with an iron fist.  Russia’s economy appears to have grown at a remarkable rate of 3.6% during 2023. Core Consumer Prices were about 7.15% higher as of January 2024 per annum. Vladimir Putin has played a rather impressive game of economic poker with the ‘West’ in light of the Ukrainian war, much to the chagrin of his critics.

South African Rand (ZAR): The African National Congress has been in power nearly 30 years. Concerns about mismanagement and corruption abound which are believed to influence questionable fiscal policy. The South African economic outlook is weak due to problems regarding reliable electrical supply, logistical problems at ports, and bureaucratic interference led by government policy which leans towards central controls.  A large amount of immigrants from other African nations are still coming to South Africa as a cheap labor source, but professionally trained people are still unfortunately leaving South Africa via emigration in large numbers. The South African Rand has been within the grips a long-term trend of losing value, and while not entirely vulnerable its credibility is becoming shakier.

Turkish Lira (TRY): A thriving business and manufacturing base exists in the nation. However, inflation due to fiscal policy in Turkey remains an impediment for corporations which are forced to deal with a currency that many within the nation are worried about because of its incrementally weaker outlook which has been noteworthy for a handful of years. There are concerns about current government leadership regarding transparency and a tendency to interfere in Turkish Central Bank decisions. Financial institutions and their corporate clients have a difficult path as they try to mitigate the constant threat of high inflation in Turkey due to questionable fiscal policy.

Venezuelan Boliver Soberano (VES): The failed socialistic nightmare continues to cause squalor in Venezuela. If you want to see the potential of where the VES is headed look to Zimbabwe and the years that a combination of despotic rule under the guise of socialism has delivered. Venezuela should be a rich and successful country due to its natural resources, but it is led by a band of thieves. The black market rate of exchange if it can be found in cities like Caracas is much higher than the ‘official’ listed rate of the government. The VES has little to no credibility.

Zimbabwean Dollar (ZWD/ZWL): The nation is still trying to fix the problems caused by government mismanagement under the authoritarian leadership of Robert Mugabe which led to hyper-inflation and the destruction of the economy. Zimbabwe has a long way to go and issues to overcome to achieve the reintroduction of a domestic currency which does not suffer from a lack of faith from its citizens, which have led to a wide abandonment of the Zimbabwean Dollar and demonetization.

A national currency that is tradable internationally does not exist, the government is aiming for another attempt at monetization in 2025 if economic stability is created. The Botswana Pula (BWP), USD, and ZAR are among other currencies that are used and accepted by the population to transact business. The government tries to monitor all FX exchanges after years of misrule, but this does not stop a vigorous black market. There is an accepted perception the current leadership is trying to fix the massive problems which have created havoc in the nation for a few decades, but the road back to normality is still perilous.  

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Forex and Equities Storm: Crucial Data will Impact Markets

Forex and Equities Storm: Crucial Data will Impact Markets

Today will start out with a rather important consumer report from the U.S and day traders should stay alert. It is easy to point to every day and week as being a crucial circumstance for speculators, because that is what gets their juices moving and gets them to wager in the markets.

However, given the rather choppy conditions in Forex seen since the last week of December and pointing to the results of the Consumer Price Index on the 13th of February and the storms created in FX, traders hopefully have enough muscle memory to remember how they felt in the midst of the whipsaw conditions which were experienced only two weeks ago.

Central bank outlooks are fragile among analysts and financial institutions. Simply put this week’s data could prove to be more important than the CPI numbers. Consumer sentiment, GDP, and inflation statistics are all on the U.S roll call this week.

Other geographies will make news too and impact global markets. Last week’s impressive results from Nvidia created another massive wave of positive momentum in equity indices. The Nasdaq 100, S&P 500 and the Dow Jones 30 all have hit record values. Japan’s Nikkei 225 has surpassed record heights.

Yet, other barometers do highlight caution abounds too, U.S Treasuries yields have edged upwards and are touching values which show there is nervousness regarding monetary policy from the U.S Federal Reserve. This week’s data will deliver more insights for investors, and Treasuries are certainly going to react to the economic reports.

Gold One Month Chart as of 27th of February 2024

Gold has edged higher in the past week and is around the 2034.00 USD mark as of this writing. The slight climb above the 2020.00 ratio which has worked like a magnet recently, indicates some traders may be leaning optimistically towards a weaker USD mid and long-term. These folks may be proven correct, but day traders should note that the 2030.00 ratio in gold is below highs seen in December, January and early February – which indicates nervousness. If day traders do not believe gold acts as an inverse barometer for the USD, simply look at the results of trading when the stronger than expected CPI numbers were released on the 13th of February. Gold fell to a low near 1985.00 on the 14th, this was not a coincidence.

Again, while it is easy to sound alarms and jump up and down and proclaim every week important for day traders, the acknowledgement that this week’s economic data is significant should not be treated as hyperbole. You have been warned.

Monday, 26th of February, U.S New Home Sales – yesterday’s results showed another decline in the housing market, and the previous month’s number was revised downwards. The outcome may point to concerns about U.S mortgage rates which remain stubbornly high for those considering purchases.

Tuesday, 27th of February, U.S Durable Goods Orders – a rather large drop of minus -4.9% is expected. The Core data however is expected to produce a rise of 0.2%. These numbers will be a good precursor for the important consumer sentiment which will follow one and a half hours later.

Tuesday, 27th of February, U.S Consumer Confidence via the Conference Board – the results of the important readings have shown intriguing gains since late fall in 2023. While improvement in sentiment has been recorded, revisions lower have also been seen in the previous three reports. The outcome of today’s report should be treated carefully. If another higher reading is produced this may create some positive momentum in the USD momentarily.

NZD/USD Three Month Chart as of 27th February 2024

Wednesday, 28th of February, Reserve Bank of New Zealand Official Cash Rate and Monetary Policy Statement – while many Forex traders will be sleeping when the RBNZ makes its important pronouncement, New Zealand inflation data has remained strong and a conservative government is in charge politically that is pro-business. The question is if the Reserve Bank of New Zealand will go against the grain of other global central banks and actually increase their interest rate while others seem to be adamant about trying to become less aggressive. While many analysts believe the RBNZ will sit on its hands and act according to the whims of others, if an interest rate hike is announced global Forex traders should take note because it would be a signal that central bankers are uneasy regarding their rhetoric and not in agreement.

Wednesday, 28th of February, U.S Preliminary Gross Domestic Product – a gain of 3.3% is the expectation from many analysts. The previous reading was stronger than anticipated. If growth numbers in the U.S come in higher than estimated the USD will react with strength. The Federal Reserve would like to see the outcome meet the expectation or come in below, this so the U.S central bank can consider reducing the Federal Funds Rate late this spring or in early summer. However, if a significantly strong growth number is demonstrated this would cause turmoil in Forex.

EUR/USD Six Month Chart as of 27th February 2024

Thursday, 29th of February, Germany Preliminary Consumer Price Index – a slight gain is expected in the inflation number. The EUR/USD has been struggling as stagflation concerns shadow the European Union. A higher inflation result will not be welcomed by the ECB, which would prefer to cut interest rates sooner rather than later. The German number should be watched and it will cause an impact if there is a surprise. The EUR/USD has been turbulent and is likely to produce more choppy conditions depending on the parade of data results this week.

Thursday, 29th of February, U.S Core Personal Consumption Expenditures Price Index – traders who have felt the previous economic reports already have caused intense reactions this week should brace for this inflation report. A result of 0.4% is expected. The Federal Reserve admits this is one of the most important publications that it monitors. This means financial institutions react to this report too. If inflation were to come in higher than expected, like the CPI results from two weeks ago, this would essentially kill off expectations of a May interest rate cut from the Fed. The USD will react to this report and so will U.S Treasury yields, which means equity indices will also be affected. A weaker inflation report is being wished for by many market participants, but will this be the result?

Friday, 1st of March, China Manufacturing PMI – not to beat a dead horse, but China’s economic data has been poor and this report will be viewed as important. Another negative outcome is expected. Transparency regarding economic numbers from China is a worry for investors. Conditions in China are being watched and it is important for traders to eliminate bias regarding their perspectives. China may be struggling, but its importance as an economic power is still very much in evidence. Foreign direct investment into China is diminishing, but plenty of investors still have ‘skin in the game’ and will be affected by the manufacturing reports.

Friday, 1st of March, U.S Manufacturing PMI via ISM – a slightly improved manufacturing reading is expected. However, because of the U.S data releases from the previous days, the results may be looked at only momentarily and not cause much of a reaction from market participants. Traders may be looking forward to the weekend after this week’s economic publications in order to rest.

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AMT Top Ten Miscellaneous Sunrays for the 23rd of February

AMT Top Ten Miscellaneous Sunrays for the 23rd of February

10. Word of the Day: Abeyance – the state of suspending something until another issue is resolved. Can you say, “Central Banks”……we knew you could.

9. South Africa: National election is scheduled for the 29th of May. Will the disdain the ANC and EFF have for the ‘West’ be addressed by voters or will the masses elect the usual suspects?

8. China and Germany: New Home Sales prices dropped again in China per data released this morning, Germany’s GDP data published today shows negative growth and recessionary pressures growing.

7. Nvidia: Their quarterly earnings report this week showed Artificial Intelligence isn’t a mere marketing tool, but a moneymaker opening a new era for technology.

6. South Carolina: Nikki Haley apparently will lose the Republican Primary in her home state tomorrow, but likely stay in the presidential race hoping that Donald Trump implodes via his own ego or legally.

5. Don’t Touch that Switch: AT&T believes yesterday’s widespread phone outage was caused by human error, not a hack.

4. U.S Equity Indices: Timeframes and patience remain crucial for investors amidst daily gyrations, this as the S&P 500, Nasdaq 100 and Dow Jones 30 explore record values.

3. New Zealand: Will the Reserve Bank of New Zealand go against the grain and actually raise its Official Cash Rate next Wednesday to fight stubborn inflation, or capitulate to the wait and see approach of ‘others’? The NZD/USD should be watched.

2. Caution: Forex remains choppy, U.S Treasury yields have crept slightly upwards, gold is hovering near 2020.00 USD. AMT’s #1 may be the reason why.

1. U.S Data Next Week: Preliminary GDP will be published on Wednesday, and Thursday will present the Core Personal Consumption Expenditures Price Index. The results could create massive impetus in all financial assets.

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AMT Top Ten Miscellaneous Raindrops for 16th of February

AMT Top Ten Miscellaneous Raindrops for 16th of February

10. Bitcoin is trading within sight of 52,000.00 USD, the digital asset was trading near 38,700.00 on the 23rd of January, which is over 34% in less than a month. That’s a lot of air in the balloon folks.

9. Gold: The precious metal has climbed above 2000.00 USD, this after a drop to 1985.00 USD on the 14th of February. Sentiment is uneasy.

8. Not April Fool’s Day: Iran has announced ‘plans’ to build a naval base on Antarctica, after declaring ‘property rights’.

7. WTI Crude Oil: The price of the commodity continues to battle the 77.00 USD level. Higher energy costs will not be looked on favorably by inflation hawks.

6. U.S Treasuries: Yields should be watched today after having provided anxious results this week, U.S equity indices will continue to react to the ‘bonds’ market.

5. Nvidia: After delivering superlative results in 2023, the company has announced the release of Chat with RTX, which allows independent AI chatbot capabilities to interface with your own documents, videos, etc., providing insights from personal queries.

4. Chinese Property: Investments dropped by over 9% in 2023. China’s government faces a clash between socialistic ideology in order to help the market versus practical supply and demand realities.

3. U.K: Gross Domestic Product numbers came in with negative results yesterday for Britain, the combination of recessionary GDP and stubborn inflation is stagflation. Bank of England faces a difficult decision. Will the BoE get proactive and cut interest rates before the Federal Reserve? GBP/USD is below 1.25800 this morning.

2. Data: Stronger than expected U.S CPI statistics caused bedlam on Tuesday, but yesterday’s Retail Sales came in weaker. The ‘disappointing’ consumer spending numbers were likely welcomed by the Federal Reserve and financial institutions. Producer Price Index statistics will be published today, surprise inflation results could jostle financial markets.

1. Forex: Day traders witnessed whipsaw results early this week and should remain cautious going into this weekend. Patience will be needed as USD centric outlooks adjust to nervous shifts in behavioral sentiment.