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Fed Today, Tmrw and Mid-Term with Changing of Guard

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Fed Today, Tmrw and Mid-Term with Changing of Guard

The Federal Reserve will cut its Federal Funds Rate by 25 basis points in a handful of hours, that is unless they want to cause a major selling attack on Wall Street and pandemonium in Forex and gold. The Fed which spoke about uncertainty in last month’s FOMC Statement and utterly refused to give guidance about today’s decision, has had the ignition regarding an interest rate cut delivered with nearly 100% certainty because inflation for the moment remains tame.

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U.S Dollar Index One Year Chart as of 12th December 2025

Fed Chairman Jerome Powell will leave the Fed in May of 2026. This isn’t a subjective opinion, he is leaving because he is not going to be reappointed by the White House. President Trump has made it clear he wants a lower interest rate and that he believes the Fed has failed to be proactive. Given Trump’s propensity for saying outlandish things, he is not wrong about Powell’s overtly cautious posture. The Fed could have cut the Federal Funds Rate in the early summer and refused to initiate.

Financial institutions have factored the 25 basis point interest rate cut into Forex already. Again, unless if for some reason they want to initiate a massive selloff in the equity indices and cause the 10 Year Treasuries yields to rise like a wildfire, the Fed needs to cut today. Day traders need to understand the first couple of reactions following the FOMC Statement tonight should not be wagered upon without deep pockets and steel stomachs.

There are three more FOMC meetings scheduled for the Fed after today’s decision while Fed Chairman Jerome Powell remains in office. The 28th of January, the 18th of March and 29th of April are the listed FOMC Statement announcement dates, this before the June meeting which Jerome Powell will not helm. While some analysts strongly believe the Fed will find it difficult to cut interest rates early in 2026, the potential for a shift in sentiment and open disagreement regarding the Federal Funds Rate could turn intriguing in late January. If inflation remains steady via the Core PCE Price Index it would not be a shock to see another interest rate cut next month.

Caution has prevailed in Forex the past couple of months. Major currencies like the EUR and GBP have lingered within known ranges. Yes, the JPY has incrementally lost value due to BoJ policy. President Trump cannot make the Fed decide what to do, but he can certainly keep appointing folks who agree with his policies and approach to enterprise. If Powell does not outright say an interest rate cut is impossible for next month’s FOMC decision, U.S economic data that will be generated over the next handful of weeks could deliver enough impetus. Let’s keep in mind ladies and gentlemen that holiday trading will come into full force after next week’s price action.

The Fed’s borrowing rate essentially stands at 4.00% for the moment. After today’s rate decision the Fed Fund Rate should be at 3.75%. And for the moment there is little justification to not make the borrowing rate 3.50% in late January. As economic data presents itself now via the PCE Price index and CPI and PPI statistics, there is reason to believe a more proactive Fed is on the horizon as the pressure is turned up on Jerome Powell.

Perhaps nothing will happen in January, but if inflation remains tame not only will Jerome Powell be criticized by the White House, but he may also face a rather public debate from Fed members who do not agree with his cautious approach to interest rate policy. A weaker USD in Forex against many major currencies mid-term appears to be a real possibility. The ability of the EUR/USD to linger within a cautious middling range may be an indicator that financial institutions have built a mechanism which will allow them to become stronger buyers. Dangerous as it is to predict a timetable, the EUR/USD over 1.17000 would not be a surprise in the weeks to come – at least to me. Let’s see where behavioral sentiment takes us.

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Taco Trade Consideration: All about Accumulation Not Ego

by with No Comment AMT MarketsAssetsFeatured Highlights

Taco Trade Consideration: All about Accumulation Not Ego

Taco Friday is upon us. Fair or not the newly coined expression TACO – Trump always chickens out – is a rather savvy way of looking at current market perspectives. Day traders have run into a buzzsaw trying to speculate on daily gyrations, but investors who have the ability to accumulate based on valuations in equities, Forex and perhaps even commodities such as gold and WTI Crude Oil have likely enjoyed the choppy ride the past handful of months.

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Nvidia One Year Chart as of 30th May 2025

Day traders who are betting on the daily whims of Forex or the stock markets have been participating in assets being stirred by a constant storm via behavioral sentiment shifts caused by White House rhetoric. President Trump has said the expression is mean. And in fact the Taco statement may be wrong all together, because what has gone down and back up, has also gone down again followed by additional reversals. But let’s put ego and wrong notions to the side for a moment. Because the important point about the Taco expression is actually about finding value.

Let’s consider that financial institutions have experience and skin in the game. The ability to buy stocks on lows and accumulate them based on a long-term mindset is likely going to prove correct. Consider Nvidia, it has suffered pratfalls, but continues to recover and pick itself off the floor and is now challenging highs again. Yes, the SP500, Nasdaq and Dow30 have all seen what can be described as whipsaw results. However, the optimistic notion that common sense rules and quality will prevail is a feature of investing. Blood on the streets as Warren Buffet has often said, is not a bad thing, it is an opportunity.

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Nasdaq 100 One Year Chart as of 30th May 2025

Day traders attempting to time the markets have always experienced a great deal of pain when speculating on notions that ‘now is the time’. Patience often proves to be worthwhile in trading and investing. Anyone who claims they are constantly buying exactly on lows and selling on apex values should be treated suspiciously. Attempting to time highs and lows is a bit like gambling on sports without any inside knowledge, sometimes you win and sometimes you lose.

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U.S Dollar Index as of 30th May 2025

In Forex the USD has been battered but continues to produce sudden violent price action. Today’s Core PCE Price Index from the U.S is expected to produce a 0.1% increase – which would be considered negligible by the markets. Fed Chairman Jerome Powell recently met with the President for the first time since Trump took control of the White House this term. The President is on the record as saying the Fed should cut interest rates now, this while Powell repeats the word ‘uncertainty’ repetitively.

Today’s inflation report is a vital statistical report for the Federal Reserve and will stir Forex. Perhaps, Jerome Powell should consider the Taco expression and understand that while talking tough Trump often is only expressing a strong stance to achieve a middle ground. If inflation numbers are near the forecasted outlook, the Fed should certainly cut interest rates sooner rather than later.

In the meantime, investors who have been accumulating stock on lower values and are playing a long game, may also be counting on ignition fuel being poured upon the markets to create a dynamic bullish run via positive impetus. Yet, even if profits are not achieved in the short-term, investors also understand they are being given an opportunity via the occasional outbursts from President Trump to take advantage of a rather delicious tactic.

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AMT Top Ten Miscellaneous Frights for the 28th of October

by with No Comment BaseballBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Frights for the 28th of October

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10. MLB Concern: Baseball executives are hoping the Yankees can start to make the World Series more competitive this evening. The Los Angeles Dodgers have won the first two games of the championship battle. Significant hopes for a drama filled, seven game World Series would be dampened badly if the Yankees do not win tonight. Television ratings which were expected to be high could suffer appreciably if the Yankees go down three games to none. A non-competitive championship would mean a loss of revenue.

9. Israel and Iran: The Middle East saga is at number nine, and hopefully doesn’t become number one. A dangerous game of poker is being played by the participants. If Iran decides to up the ante once again, it would be a dangerous decision, because it appears Israel has positioned itself via this weekend’s retaliation to be more aggressive if need be.

8. WTI Crude Oil: The ability of the energy to move below 70.00 USD upon this morning’s trading is a sign the Middle East conflict remains tranquil in the minds of large participants in the oil sector. However, if Iran decides to test Israel again directly, Iran may find that its oil infrastructure is vulnerable. As the price hovers below 68.00 USD during this writing, it appears buyers who bought speculative positions the past few weeks might be capitulating.

7. BRICS: The inclusion of 13 additional nations as Partner States to the international organization led by Russia, China and India shows the entity sees itself as a growing alternative geo-political force and trading sphere with real power. The West should be paying attention, but often seems like it is not concerned about the potential strength of BRICS, and instead makes believe the group is a fallacy and much ado about nothing – this is a mistake by the West.

6. North Korea: The potential of North Korean combat troops entering the Ukraine – Russia war is a dangerous notion. However, it opens the door for Ukraine and South Korea to offer surrendering deserters the possibility of being allowed into South Korea, if soldiers can prove they are not spies. Unfortunately, the temptation of desertion by enemy troops could prove to be wishful thinking because North Korean soldiers will have intense supervision at all times; the threat of being shot as a liable traitor is a likely constant menace.

5. Gold: Record values continue to be seen, the price of the precious metal as of this writing is near 2,732.00. Noted as a store of value, gold is also seen as a safe haven by its buyers. Now may be the time to consider behavioral sentiment as a main driver because of anxiousness in the global marketplace. Speculative forces are certainly involved in the move higher too. With so many risk events shadowing, it may be very unwise for day traders to bet against the rise of gold near-term.

4. U.S Data and the Fed: Advance GDP numbers will be published this Wednesday, the Core Personal Consumption Expenditures Price Index will be seen this Thursday, and on Friday the Non-Farm Employment Change statistics will be presented. Fireworks should be anticipated by day traders. The combination of these reports, the approaching U.S election, and the Federal Reserve’s FOMC Meeting decision on the 7th of November will be enough to make most analysts hearts beat faster.

3. USD/JPY: Japan’s election results today now require a coalition government because the ruling Liberal Democratic Party has lost its majority. The Bank of Japan has a meeting this Thursday and is expected to hold its BoJ Policy Rate in place. The Japanese Yen has returned to values above the 153.000 level as of this writing. While many major currencies have lost value against the USD since the end of September, the USD/JPY needs to be watched as a dynamic combination of risks abound. Political gridlock, inflation, and lackluster economic data in Japan are not ingredients which will provide financial institutions with optimism in the near-term. The historically cautious attitude of the Bank of Japan will be severely tested in the coming weeks.

2. U.S Election: There is a little more than one week to go before the Presidential vote begins. While many folks are focused on the White House, the race for the Senate looks to be a stiff competition too. Republicans are hoping to regain the majority in the Senate and retain their power in the House of Representatives. Financial institutions are apprehensive about the outcomes for Congress, which will have an important role in fiscal and regulatory management. The Democrats appear to be nervous. Noise from the campaign trail and media will become heightened over the next seven days. Top bureaucrats in offices like the SEC, CFTC, FCC and other agencies know their jobs are on the line.

1. Market Volatility: U.S economic data, the coming election, and the Fed means the next week and a half of trading in the global markets are going to be packed with violent firework displays. Day traders who do not have experience should watch from afar, because the coming price action can cause fast losses for those caught on the wrong side. Trading sentiment is fragile, this is evident via the choppy results seen in equities, Forex, many commodities, and rising U.S Treasury yields. Over stating the obvious for the moment about risk management is a public service.

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Risk Appetite: Forex and Equities and Cautious Optimism

by with No Comment Behavioral SentimentEconomic CalendarFeatured Highlights

Risk Appetite: Forex and Equities and Cautious Optimism

Day traders can clearly see that risk appetite has taken hold of behavioral sentiment early this week. USD centric price action has created highs for the British Pound, South African Rand, Singapore Dollar and a host of other major currencies paired against the USD. Yesterday’s poor showing via the CB Consumer Confidence reading in the U.S poured additional fire onto the notion the U.S economy is not doing as well as Fed Chairman Jerome Powell expressed last week, which means caution should be used when looking at the broad markets. Speculators who only make short-term wagers cannot let blind optimism be the guiding light.

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USD/SGD Three Month Chart as of 25th Sept. 2024

While today will be thin with economic data, Thursday’s Gross Domestic Product results could prove to be another ignition switch for market impetus. The quarterly Final GDP result is widely expected by analysts to produce a gain of 3.0%. The Final GDP Price Index statistics are anticipated to show a 2.5% ratio. If the growth and inflation numbers miss their marks this could set off a momentary storm in the markets. A good example of trading that has already been baked into the cake regarding values and mid-term outlook is the USD/JPY, which while maintaining its bearish stance has clearly found a price realm financial institutions are now maneuvering carefully within as equilibrium is battled.

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GBP/USD Three Month Chart as of 25th Sept. 2024

Yet, many financial institutions have clearly leaned further into their optimistic stances particularly via the U.S major equity indices and day traders are likely trying to follow the momentum being generated. Yes, New Home Sales will be published in the U.S today, but these numbers carry a lot of complex considerations which analysts tend to dissect in a myriad of ways, meaning that while they will get some attention, the largest players will stay focused on tomorrow’s growth and inflation data coming via the U.S GDP outcomes.

USD/ZAR Three Month Chart as of 25th Sept. 2024

Forex traders should keep an eye on U.S Treasury yields, yesterday’s slight climbs early in they day were mostly met by reversals lower later on. There is also the knowledge that the yields are traversing long-term depths and there is an assumption they don’t appear ready to see a large shift in momentum. The Federal Reserve is widely expected to cut the Federal Funds Rate again in November by another 0.25%. Numbers via reports like tomorrow’s GDP statistics, and Friday’s Core Personal Consumption Expenditures Price Index will shake existing behavioral sentiment and the Fed’s outlook. The Core PCE number has an estimate of 0.2% per its monthly reading, the last three reports have met expectations.

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USD/JPY Three Month Chart as of 25th Sept. 2024

Fed Chairman Jerome Powell will speak tomorrow at the U.S Treasury Markets Conference in New York, but his remarks will have been pre-recorded and presented via video. Treasury Secretary Janet Yellen will also speak afterwards at the meeting. However, their thinking is widely known and they are expected to sound rather tame. It also needs to be added that both Powell and Yellen are fully aware the U.S Presidential election is approaching. Neither one of them is going to risk saying something that can be interpreted as economically defiant.

Traders should expect the potential of volatility developing tomorrow as financial institutions and larger market participants position for the GDP reports, but if the numbers are within sight of expectations, it is likely current price equilibriums will continue to reflect current risk appetite dynamics. Proper risk management and the use of conservative leverage should be fully practiced. Retail traders should also begin to start considering that Non-Farm Employment Change data that will come from the U.S on Friday, October the 4th. The jobs numbers next week could pose a significant threat.

The Fed last week made it clear they believe there was reason to lower the Federal Funds Rate (while playing catch up) and there is the potential to enact further dovish actions in the months ahead. However, Jerome Powell also insisted – paraphrasing – the U.S economy is rather strong and added this is being reflected in solid growth statistics and a jobs market which may be weaker but remains stable.

Given the Fed’s propensity for a conservative approach, they have crawled out a rather precarious limb regarding their rather positive attitude. The coming economic data will certainly be noteworthy tomorrow and Friday, and via next week’s job numbers. Will optimistic equilibrium in Forex prevail over the next week? The major currency pairs will certainly be tested.

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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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Forex Debate and Coming Impetus this Week for Speculators

by with No Comment AMT MarketsEconomic CalendarFeatured Highlights

Forex Debate and Coming Impetus this Week for Speculators

In many respects the broad markets feel as if they are waiting for big news and this may not be delivered as wanted. Yes, the debate between Biden and Trump this Thursday will get attention, but unless there is a major television moment the outcome is not likely going to give a final affirmation regarding the U.S election results in November. Some people may be counting on Biden to literally misstep, and for Trump to say something incredibly outlandish, but it is also possible the debate disappoints even as entertainment. Perhaps the Presidential debate will deliver sideways action like the broad markets have the past week, leaving us with a desire for more.

Financial institutions will look at U.S growth numbers this coming Thursday certainly, and also keep their eyes on the upcoming Sunday vote in France on the 30th which might prove rather remarkable. The EUR/USD is certainly back within its lower depths when a six month chart is inspected, and traders will react to France’s election this weekend, but it should be remembered the second and vital round of voting will not occur until the 7th of July. Until then, reactionary and precautionary results in the EUR/USD may produce headaches. The EUR does look oversold, but timeframes and the ability to hold a position may prove tough for short-term traders hoping for a wave of optimism to suddenly take hold and create a strong trend.

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EUR/USD Six Month Chart on the 25th of June 2024

Not to be outdone the U.K is gaining plenty of attention because of its election on the 4th of July, but in this case it seems more like a coronation for the Labour Party and only a question about how devastating the carnage will be for the Tories. Financial institutions may have already factored in their perceived outlooks regarding the U.K vote into the GBP/USD. The currency pair will certainly react to the British election results, but financial institutions may have less to fear regarding sudden volatility of the British Pound, compared to the EUR/USD which could still have days ahead when it doesn’t trade in a USD correlated manner due to E.U political unknowns.

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Monday, 24th of June, Germany Ifo Business Climate – the reading produced a drop to 88.6, missing the estimate of 89.4. Germany economic pressures remain negative and this may keep the idea alive that the ECB should be considering another interest rate cut. However, because the European Central Bank cut its Main Refinancing Rate recently and the U.S Fed continues to look rather neutral, it seems unlikely the ECB will decide to suddenly become the only proactive central bank around over the mid-term. Meaning, the ECB may stay conservative and want to wait on others to join the interest rate cut party, this before they create more unbalanced carry trade opportunities which could lower the value of the EUR/USD too much.

Tuesday, 25th of June, U.S CB Consumer Confidence – the reading will certainly be watched by investors, but will it create bedlam if there is surprise for equities or Forex? The likely answer is no. Behavioral sentiment has become flustered and shifted over the past handful of months, and this will create some caution no matter what today’s consumer reading says. Large financial institutions will probably stay geared to other upcoming data which will be considered more important.

Wednesday, 26th of June, U.S New Home Sales – a slight uptick in the amount of housing sales is expected. However, because of higher interest rates in the U.S via the cost of mortgages this number is likely to remain rather muted. For interested traders a look at the previous revisions of the New Home Sales data will prove interesting. The outcome of this reading should be treated with a bit of skepticism because it may be changed down the road. Unless there is a huge surprise the impact of this report may be rather calm, no matter what media narrative dictates.

Thursday, 27th of June, U.K Bank of England Governor – Andrew Bailey will speak about the Financial Stability Report. Bailey is certain to add some insights regarding the BoE’s neutral policy stance taken last week regarding interest rates, but more hints regarding potential cuts later this summer and possibly late this year again may be given. Economic data from the U.K remains troubling. The Bank of England may want to remain cautious because of inflation concerns, but financial institutions would like to see a more proactive dovish stance. Bailey might also talk about the potential affects from the U.K election, but he will have to be careful to make sure it doesn’t sound like he is taking a political side.

Thursday, 27th of June, U.S Gross Domestic Product and GDP Price Index – these two reports will impact the financial markets. The growth and inflation data will be examined by all financial institutions and generate trading reactions. The GDP growth number is expected to come at 1.4%, which is slightly higher than the previous report which posted a 1.3% result. Any number below 2.0% growth will be considered as lackluster by most financial analysts. Traders will then turn their attention to the inflation results which are supposed to match the 3.0% gain from the last Price Index report. If this number can somehow come in below expectations, this could propel some weakness in the USD. However, traders should be careful and remember U.S economic data the past handful of months has produced surprises which have created dangerous and choppy Forex conditions.

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USD/JPY Five Day Chart on the 25th of June 2024

Friday, 28th of June, Japan Tokyo Core CPI – a gain of 2.0% is anticipated. The USD/JPY should be watched carefully. Early this Monday the BoJ likely tried an intervention in the Japanese Yen, but the USD/JPY only had a momentary swift selloff. As of this writing (Tuesday the 25th of June) the USD/JPY is trading near the 159.345 ratio which is very high when historical comparisons are considered. If the inflation number comes in with a 2.0% result or higher this could set off fireworks in the USD/JPY. Financial institutions clearly believe the BoJ should raise their interest rate by at least 0.25%, but the Japanese government appears keen on trying to keep the Japanese Yen weak to help GDP via exports from the nation. The Bank of Japan needs to be given attention. Speculators and the BoJ are battling against each other.

Friday, 28th of June, U.S Core PCE Price Index – the Personal Consumer Expenditures inflation report is forecasted to produce a gain of only 0.1% compared to the previous result of 0.2%. If the PCE Price Index does turn in the anticipated result, and the GDP Price Index from Thursday met expectations or came in lower, this could cause more speculative selling of the USD. However, if the inflation results come in stronger than expected Forex traders could see bullish USD buying which again challenges sellers abruptly.

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Caution as GDP and Reactive Sentiment the Key for the Week

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Caution as GDP and Reactive Sentiment the Key for the Week

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

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

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

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

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

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

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

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

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

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

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Gold Six Month Chart on the 28th of May 2024

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

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

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

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

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

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

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

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