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U.S National Security, Part 2: Regional Alliances – Europe

U.S National Security, Part 2: Regional Alliances - Europe

Opinion: The following article is commentary and its views are solely those of the author. This article was first published the 25th of December via The Angry Demagogue.

As we continue our tour of the administration’s National Security Strategy we will stay with “part III: What Are America’s Available Means to Get What We Want?” and move to the sixth bullet point: “A broad network of alliances, with treaty allies and partners in the world’s most strategically important regions” and work through the important regions that the strategy documents – Asia, Europe, the Mideast and Africa. For good or for bad we will need to split these regions up since the key point is forming coalitions that can handle their actual region. Sweden can’t be part of a coalition to protect Italy’s interests in the Mediterranean and Japan won’t be protecting Singapore.

Some U.S allied countries, like Australia, Israel and India will be involved in multiple regions helping lead alliances in all areas important to them. With that in mind we will point out the first mistake of the discussion on regions and that is Europe. We will suggest something here that would not usually come from the mouth of a hawk and pessimist and that is that NATO has no real mission and needs to be replaced by a series of alliances that make more sense. While the fear during the Cold War was a Warsaw Pact ground invasion into Germany and beyond which would have required the totality of American and European forces, Europe now is facing a Russia that could not conquer Ukraine in nearly four years of war. That is not to say that Russia is not to be feared only that each part of Europe needs to ally to face a Russian onslaught in its own theatre.

Italy is not going to send troops to Sweden to prevent an attack and Norway won’t be helping Greece in any fight. Turkey is a country that other NATO countries fear more than trust, especially regarding Russia.

In short, NATO needs to be broken up into different alliances where each country will be allied with countries whose fall would affect its national security. The United States can either be a signatory to these alliances or it can decide how involved it wants to get in any conflagration depending on its own interests at that time. It can decide to position ground troops in the countries, supply air cover or, as in the 12-day war between Israel and Iran, help with missile defense and in providing the final blow with weapons only America has. Or – it can decide that it will never participate. One hopes that that won’t happen, but each alliance will need to be ready to fight on its own.

We can include France and the U.K as large countries with advanced armed forces as allies to all of these alliances. France certainly can contribute air power to each of the alliances that are faced against Russia. As for the U.K, it is difficult to know where that country is going but its navy and air force are still powerful.

Today we will deal with north, central and western Europe.

The Baltic Alliance

This would be an alliance that includes Poland, Germany, Sweden, Finland, Norway, Denmark, Latvia, Lithuania and Estonia and would provide cover for land, air and naval battles. Each of these countries, with the exception of Germany, has a border with Russia and all are on the Baltic Sea – a key waterway for them and for Russia.

An alliance of these countries would force them to concentrate on those areas necessary for their defense. An incursion, for example into Finland would force Poland to mass forces on its border with Russia and Belarus (Poland borders Russia in Kaliningrad which is separated from Russia proper by Lithuania) and Germany to move forces to Poland. All countries could also contribute ground forces to Finland as well as naval and air power.

The only thing missing is the lack of a nuclear umbrella. That is no small issue but can be dealt with by support or threats from France or the U.K.

The Atlantic Alliance

Aside from helping the Baltic Alliance, France and the U.K will have major responsibility along with the Netherlands for patrolling the North Atlantic and, with help from Portugal, and Spain the South Atlantic. As the Atlantic Ocean can be considered one of America’s seas, this alliance will need to have the close cooperation if not outright membership of the United States. Canada too, will need to be part of this alliance. We can include the increasingly important Arctic Ocean into this alliance’s responsibilities.

As we move towards the south Atlantic countries such as Morocco, can be included as well as other western African allies of the west. An alliance like that could encourage western African countries to abandon close security and economic ties with China and Russia. The “border” of this alliance would be that squiggly line in the middle of the Atlantic that separates the Eastern and Western hemispheres.

The Central European Alliance

We can look at the smaller central European countries that formed the heart of what was the Hapsburg Empire but are not front line countries bordering Russia – Romania, Hungary, Slovakia, Czech Republic, Austria, Serbia and Bulgaria – and we have an alliance that, backed by Germany, Poland and the United States, would create a further deterrence to Russian encroachment into Europe proper.

Where, do you ask does Ukraine fall in this European alliance structure? That answer will have to come from the major European powers in concert with the United States. Adding Ukraine to the Baltic alliance might be viewed as another attempt to NATO-ize them by the Russians. However, attaching them to the less threatening Central European Alliance of smaller countries might be the excuse and “victory” that Putin would need to end the war. But we are getting ahead of ourselves here. Ukraine is a problem that can only be solved if the West decides to actively join the fight against Russia (unlikely) or when Putin and Russia get tired of the fight and look for a way out that could allow them to claim victory (more likely than the former, but sadly, a long way off).

The Administration’s concentration on regions and how certain countries can become leaders in support of western and American interests is correct – but the breakdown of the regions has to go beyond the post WWII world. The place of America in the post-cold war world, with a China that wants to challenge America’s economic and military interests and leadership needs to break down old alliances into more manageable and logical pieces.

The wild card in all of this is, of course, the will of the European powers to take their own defense seriously. The Baltic Alliance we spoke about seems to be filled with countries that understand the threat from Russia, but do they recognize the threat to them from the alignment, the Axis if you will, of Russia, Iran, North Korea and China? And of more importance have they yet come to understand the threat to their countries, as they know them, from open immigration and from their own abhorrence of families? The former is something only the governments can handle, the latter though, must come from the people themselves.

A whole generation (or two in many instances) of Europeans have grown up not only as “only children” but in families that have no aunts and no uncles, no cousins and only very elderly grandparents, if that. They have grown up in other words without families. Will the young generation see the importance of families to themselves and their countries or will they continue the nihilistic lives that they parents have “sanctified”? Religious institutions, too will have a major role in this challenge. No amount of “parental leave” and childcare subsidies will convince the young to marry and have children – will only come from a change in the culture. Is Europe up to it?

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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EUR/USD and German Elections: Saying Quiet Thoughts Out Loud

EUR/USD and German Elections: Saying Quiet Thoughts Out Loud

EUR/USD One Week Chart as of 23rd February 2025

The German Federal Election is taking place today and an expected shift to the right is being anticipated via the German voting public. The EUR/USD will react to the trading results tomorrow on Monday, and speculators who do not have deep pockets may want to remain on the side and simply watch the volatility as it develops.

After touching highs late last week which brought the 1.05000 vicinity into focus, also challenging the highs seen in the previous week, traders started to sell the EUR/USD going into this weekend. Financial institutions will react to the results from the German vote and if the Christian Democratic Union wins with strong results, and the AfD (Alternative for Deutschland) takes more seats than some anticipate this will cause an immediate reaction in the EUR/USD.

Voting publics in the U.S and elsewhere are showing signs of voting for more conservative leadership. Germany has seen lackluster economic results manifest for a long time and their public is certainly yearning for more GDP growth and less inflation. It is no secret that in nations such as Canada, Australia and countries in Europe that conservative voices are becoming louder when unbiased polling is conducted. Prime Minister Trudeau of Canada has already admitted his defeat via his decision to step aside.

The United States saw a very strong election result for Donald Trump and Republicans in November, and it would not be a surprise to see a similarly strong outcome for conservative candidates in Germany as results are announced late tonight and tomorrow. Voters seem to be expressing frustrations they feel they are not allowed to say out loud in polite circles. The results from Germany will likely mirror this consideration.

So what will the EUR/USD do if the voters in Germany elect a vastly more conservative government? Early results will be choppy, but a logical wager is to believe financial institutions will begin to look at the EUR/USD with a more bullish attitude, this if they believe a government is going to take power that is business friendly. Day traders should not bet blindly on EUR/USD upside. But looking for the 1.05000 level and higher to become a focal point for buyers is a legitimate outlook near-term.

The selloff in the EUR/USD this past Friday may have had a bit to do with financial institutions believing the upside had been overdone before the results of the German election were known. But that is likely a false narrative.

There is a better chance the sudden selloff in the EUR/USD on Friday which developed and saw fast velocity downwards, happened because Wall Street equities produced declines on its open and the selling continued going into the weekend. Forex is never easy, many complexities exists for speculators to consider.

The results from the German Federal Election today will influence major currency pairs this coming week and the EUR/USD will be centerstage. If Wall Street begins to show signs of stability this will also help the EUR/USD. Day traders should be extremely careful early tomorrow as financial institutions start participating and react to the results from Germany.

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Risk Analysis Review: Warning about Coronavirus in Feb. 2020

Risk Analysis Review: Warning about Coronavirus in Feb. 2020

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

Thanks for asking about my thoughts.

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

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

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

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

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

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

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

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

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

Robert Petrucci 26 Feb 2020

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Reactions and Risks as Trading Clarity Remains Hard to Grasp

Reactions and Risks as Trading Clarity Remains Hard to Grasp

While many U.S government officials try to shrug off the downgrade of U.S Treasuries by Fitch Ratings last week, a warning shot has been fired regarding U.S spending and the nation’s growing deficit. Janet Yellen and others may believe the downgrade should not have happened, but the prospect that the U.S golden goose is going to stop eventually producing enough eggs is a realistic viewpoint from Fitch. Risk adverse trading on the news was seemingly sparked from the U.S Treasuries downgrade, while many prominent figures including Warren Buffet have claimed they are not worried. However, one thing that the downgrade did was certainly create more clouds for financial institutions which have already been suffering from a lack of clarity the past three weeks.

U.S economic policy remains troubling regarding its spending, and while the government believes its bonds will remain the best in the world for the foreseeable future, it would certainly help matters if responsible ‘adults’ would be allowed a voice regarding stimulus, expenditures and debt ceiling concerns. The U.S has been warned, but with a major presidential campaign approaching on the horizon, more promises to the U.S public will likely carry greater long-term costs.

Gold One Week Chart as of 8th August 2023

While the USD did get stronger across Forex and gold finished last week near lows, some major currencies finished Friday with slight reversals higher against the USD before going into the weekend, based on the weaker than anticipated Non-Farm Employment Change outcome. However, Average Hourly Earnings came in slightly higher. The rise in wages for employees wasn’t expected, but the gains via the inflation number may not have been considered significant enough to cause a panic.

Day traders trying to navigate through the news of the ratings downgrade and the mixed jobs numbers from the U.S may have gotten ripped apart from the volatility late last week. Forex brokers likely had a good week if the majority of their speculators were ‘B’ book – virtual – traders. Survivors of last week’s dynamic price action should be aware that financial institutions do not have the best of outlooks for global central banks. This week’s coming data may help a bit, but trading could also remain rather dangerous and churn volatility.

Global Outside Influence to Give Attention:

Although Niger may seem like a world far away for most day traders, they should keep an eye on the developments of the African nation. A military coup has gotten the attention of global powers and there are threats of military intervention rattling. France, the U.S and Nigeria and other ‘Western’ leaning nations have a stake in the Niger drama, on the other side is Russia and its Wagner affiliated mercenaries. The potential for a war to to start in this landlocked northern African nation appears to be growing. A conflict in Niger could include a wide range of competing sides and create loud rhetoric and hyperbole. It could also cause uncomfortable feelings at the BRICS summit scheduled to begin on the 22nd of August in Johannesburg, South Africa.

GBP/USD One Month Chart as of 8th August 2023

Monday, 7th of July, U.K Halifax Home Price Index – this data is expected to remain rather stable, but the past three results have been negative. Mortgages are getting expensive in the U.K and the pressure added from higher interest rates is not helping. The GBP/USD could react briefly to this outcome.

Monday, 7th of July, E.U Sentix Investor Confidence – the reading is anticipated to be worse than last month’s outcome regarding investor outlook. The past three months have been negative. The E.U is certainly facing recessionary pressure. Oddly enough, a poor outcome could spur on the belief the ECB may have to become less aggressive regarding their higher interest rates. The EUR/USD may see a flurry of reactions from this report.

Tuesday, 8th of July, China Trade Balance – the results will get plenty of attention because recent economic data from the nation has been troubling. Export demand is important for China’s economy.

Tuesday, 8th of July, Germany Final Consumer Price Index – the result is expected to match the forecast of a 0.3% gain. This inflation report will be watched by EUR/USD, but if expectations are met this could create rather consolidated trading until Thursday for the currency pair.

Wednesday, 9th of July, China CPI – the inflation data from the nation will be watched by global investors. Recent statistics from China have signaled concerns about ‘deflation’. An outcome of minus -0.5% is expected. Economic issues are shadowing China, this as it remains active in global affairs.

Last week Argentina announced China helped facilitate a ‘bridge loan’ for the South American nation so it could make a repayment to the IMF. Rising economic concerns in China could start to squeeze its ‘cash power’ as it tries to gain influence globally by pumping Yuan (CNY) into international finance. China has certainly been bold and is playing a ‘long game’, because its choice of Argentina as a nation to help can certainly not expect to produce short-term financial gains.

Thursday, 10th of July, U.S CPI – Consumer Price Index results from the States will cause potentially dynamic broad market movement. Inflation is expected to match last month’s rise of 0.2% via the broad and core numbers. However, traders should note that some analysts have voiced concerns rising energy prices the past month will hit the inflation numbers, if this occurs it could spark a volatile USD. Higher Crude Oil prices combined with a streak of U.S hot weather may create an intriguing outcome. Risk management should be used by day traders who are wagering in the markets as the CPI readings are released.

Friday, 11th of July, U.K GDP – the Gross Domestic Product numbers will be important immediately for the GBP/USD. Although last month’s outcome was slightly stronger than anticipated it was still negative with a minus -0.1% reading. The growth number this time around is expected to gain 0.2% per the monthly report.

Friday, 11th of July, U.S Producer Price Index – economic numbers from the States have been mixed recently. These inflation numbers are expected to show a slight rise, if the outcome meets expectations – the broad markets may remain calm. However, if inflation is stronger than expected, the result could set off fireworks if the outcome sets off fears about the U.S Fed maintaining it hawkish rhetoric.

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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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Cautious Trading as Key Data and Outlooks Await Impetus

Cautious Trading as Key Data and Outlooks Await Impetus

The start of trading this week could prove to be slightly adventurous for speculators as financial institutions return to the markets and start to take positions for their clients. Having survived the past two and a half weeks of holiday season trading, market action will now focus on immediate, mid and long-term goals and outlooks depending on time frames and targets. Slightly nervous trading was on display last week, but some traders may believe their is plenty of room for more optimism and may be suspicious of the results delivered.

Gold Five Day Chart as of 8th of January 2024

Day traders should look at some barometers before they participate in the near-term. Gold has come off highs seen late last week, but remains within the higher elements of its six month price range. Its selloff from apex values last week perhaps correlates to U.S equities and USD turbulence which has also been experienced.

Last Friday’s reaction to the U.S jobs numbers was fascinating. The numbers delivered an initial shock to folks who wanted to react quickly. Hiring the last month increased more than expected, which might have caused the momentary bullish surge in the USD. Only to be confronted swiftly by further investigation of the jobs data which showed previous months statistics had been revised downwards. This acknowledgement set off selling of the USD and technical whipsaw results.

Day traders participating in Forex this past Friday likely experienced a range of emotions. If the market correlations are correct regarding the USD and the reactions seen, trading in gold also seemed to mirror the price action. Interestingly, gold touched a low of nearly 2024.00 USD on Friday in the wake of the jobs report, surged higher to around 2064.00 and then reversed lower again.

The notion that gold is trading within sight of Friday’s lows is interesting for both the precious metal and trying to understand where USD sentiment will lean early this week.

Behavioral sentiment remains rather optimistic, however nervous headlines during the holiday season may have caused cautious shadows to grow darker, particularly as light trading volumes affected results. Today and tomorrow will prove interesting in the broad markets, this as financial institutions return in full and as they brace for U.S inflation numbers later this week.

S&P 500 One Month Chart as of 8th of January 2024

Nervous short term trading is likely today and tomorrow as price equilibrium is sought. U.S equity indices have backed away slightly from their flirtations with all-time highs, but even as selling developed the past week highs are still in sight and are likely still being dreamed about by many institutions. U.S Treasury yields will also be a good indicator for Forex traders early this week regarding how comfortable financial institutions are with their current outlooks.

Monday, 8th of January, Germany Factory Orders – a slight gain of 0.3% was reported today, which was below the 1.1% expectation. The German economy is starting to show signs of economic growth, but has major hurdles to still climb. The lackluster German numbers may keep the ECB in a rather neutral stance for the mid-term. Which might help a bullish EUR/USD outlook if the U.S Fed is seen as the first major central bank which will have to cut interest rates.

AUD/USD Three Month Chart as of 8th January 2024

Tuesday, 9th of January, Australia Retail Sales – the anticipated climb of 1.2% is significantly higher than the negative -0.3% result from last month. A good outcome via the Retail Sales could help the Australian Dollar reignite some positive momentum. CPI data will come from Australia on Wednesday, which will certainly affect the AUD/USD too.

Wednesday, 10th of January, U.S Ten-Year Bond Auction – though day traders may not be too involved regarding the sale of U.S Treasuries, the results from the auction will have an affect on Forex. U.S Treasury yields should be monitored.

Thursday, 11th of January, U.S Consumer Price Index – a slew of CPI results will get the attention of financial institutions. The inflation data is expected to show a slight decrease in the Core CPI result, but show a slight gain in the broad number. This will likely be the most heavily traded day since the third week of December. There will be a reaction from the inflation reports. If the numbers come in around the estimates this may help the bearish mid-term outlooks for the USD. If the results are shockingly stronger, the USD would turn bullish. Day traders need to be careful in the midst of the Consumer Price Index publications because volatility is expected.

Friday, 12th of January, China CPI – a decrease is expected from the Asian giant. Deflationary concerns are shadowing China’s economy. The expected number of minus -0.4% would actually be an improvement compared to the last reading which was minus -0.5%. The USD/CNY has been rumored to have been experiencing some ‘hands on’ management from China. Investors continue to be nervous about China’s economic outlook and would like to see signs of improvement.

Friday, 12th of January, U.K Gross Domestic Product – a gain of 0.2% is being anticipated. Any growth from the U.K GDP would be welcomed considering the recessionary data which has been lingering. The GBP/USD will react to the results and bullish momentum in the currency pair could be sparked by a better than anticipated number.

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Trading Optimism for 2024 and Pursuit of Castles in the Air

Trading Optimism for 2024 and Pursuit of Castles in the Air

Traders may feel like horses being kept in their stables right now. The desire to run freely in Forex and other markets is certainly being felt, this as many analysts have jumped onto optimistic bandwagons and are pointing to the U.S Federal Reserve and its rather dovish outlook for 2024. Gold in early trading this morning is lingering near highs and the USD remains within weaker territory when technical charts are inspected via one month results.

Gold Three Month Chart as of 2nd January 2024

Yet, thin holiday trading is full in effect. Light volumes will continue to be seen early this week after the New Year’s celebrations. Financial institutions will open their doors today, but their corporate clients around the world will have plenty of employees who will remain on vacation until the 8th of January. Thus, while day traders may feel enticed to wager in the markets with various CFDs, they should be careful and understand unbalanced positions may cause temporary chaos. Risk taking tactics should be carefully considered.

The desire to dream about castles in the air is a source of comfort for many new day traders. But remaining realistic about potential results, while not getting overly ambitious about targets is an important aspect for all speculators. While trends may look attractive in Forex, commodities and equities a well planned approach regarding risk taking is a practical road. Castles in the air tend to vanish.

Optimism will be a word frequently heard in the coming days and weeks, and here’s to wishing everyone a prosperous and peaceful 2024. The potential of a more dovish U.S Federal Reserve regarding monetary policy and declining Treasury yields sparking more risk appetite in equities as investors seek solid returns is alluring, however risks remain on the table. The economy of China continues to worry analysts and tensions in the Middle East are still a long way from being solved.

However, the biggest cause for speculative concerns during 2024 may come from elections in Taiwan, India, South Africa and the United States. Taiwan’s presidential vote is on the 13th of January. China will certainly be watching the results, and traders should expect to hear swords rattling afterwards and then hope the noise calms down.

USD/ZAR One Year Chart as of 2nd January 2024

Tranquil voting results in India will be welcomed by investors. India is becoming a noteworthy economic giant, its rapid growth and ascension as an important investment vehicle needs to remain stable. South Africa remains troubled domestically by concerns regarding corruption and inefficiency, its upcoming spring election results may not solve the problems it faces. There will be many elections in Africa this year, which could spur on considerations regarding geopolitical alliances and the price of commodities.

The U.S election late in 2024 will start to grow in noise as the months progress and by early this summer behavioral sentiment will begin to become nervous regarding the outcomes for the White House and Congress. The U.S appears to be braced for an election between Joe Biden and Donald Trump and this will certainly cause skittish storms.

Traders should feel confident about risk appetite in the global markets improving, but they should keep in mind that impetus coming from many different spheres can affect the financial world.

Tuesday, 2nd of January, U.S Final Manufacturing PMI – today’s Purchasing Managers Index is expected to show a slight improvement, but the results may fall on deaf ears because many market participants will not be around to react due to the fact they are still on vacation.

Wednesday, 3rd of January, U.S ISM Manufacturing Prices – this inflation survey from purchasing managers may be given a bit of attention, but its effect may be limited because of light trading volumes still being exhibited.

Thursday, 4th of January, Germany Preliminary CPI – the inflation data from Germany will get some consideration, and the result is expected to show a slight increase. Services PMI data will also come from European Union nations, the U.K and U.S.

Friday, 5th of January, U.S Non-Farm Employment Change and Average Hourly Earnings – the jobs reports will get the notice of financial institutions. The results for employment and wages are expected to be slightly weaker than the previous month’s outcomes. Typically these numbers would cause a stir, but unless there are surprises, most financial institutions may not react massively to the reports because it remains a ‘holiday’ week. If the numbers come in weaker than expected this could cause interesting reactions on the 8th of January and weaker USD sentiment.

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Yields, Credit Worthiness, Trading and Geo-Political Risks

Yields, Credit Worthiness, Trading and Geo-Political Risks

Traders participating in Forex and equity indices this week may want to consider finding a very quiet room and avoiding the loud conjecture which is certain to be heard. U.S bond yields will remain a focal point the entire week, and Moody’s new negative label regarding U.S credit worthiness issued late on Friday will not help the Federal Reserve and Treasury as the size of U.S debt is called into question once again. Forex markets provided speculators velocity and volatility last Thursday and Friday, and this week’s risk events are certain to cause behavioral sentiment turbulence.

USD/CNY Five Year Chart as of 13th November 2023

Added to the ‘fun’ for speculators this week will be the APEC Summit gyrations which will be held in San Francisco, and includes a scheduled meeting with President Joe Biden and President Xi Jinping this Wednesday. The meeting comes at a critical time as geo-political and economic concerns come from Asia, the Middle East and Eastern Europe.

However, traders should not allow their emotions to grow too nervous, financial institutions actually showed a taste for U.S equity indices last week and the price of gold has declined, while the value of Crude Oil per barrel has also eroded. This shows that even in the midst of carnival like barking from pessimistic naysayers, that investors are still participating in the broad markets and makeing bets on the notion that optimism will continue to show sparks of light.

Monday, 13th of November, U.S Federal Budget Balance – this report is certain to be rather negative if studied closely. However, investors already know this story, and last week’s Moody’s downgrade of U.S credit accountability has already rang alarms. Thus, this report will likely fall on deaf ears today.

Tuesday, 14th of November, E.U Flash GDP – the numbers from the European Union are exected to be negative. However, last week’s slightly better than expected Germany Factory Orders may help the European Gross Domestic Product results limit the capability of a surprisingly bad decline. An expectation of only minus -0.1% is awaited.

Tuesday, 14th of November, U.S Consumer Price Index – the inflation numbers from the States will get the attention of most global investors. The results are sure to affect the USD, Treasury yields and equity markets. A weaker than expected outcome could propel the USD lower. Stronger than estimated statistics could ignite buying of the USD based on the notion the Fed will feel compelled to remain aggressive via its monetary policy rhetoric.

Wednesday, 15th of November, China Industrial Production – while the APEC Summit is highlighted by the media, it is economic data from China which remains important. Data from the nation continues to be lackluster and demand for commodities, the USD/CNY, domestic real estate and conusmer spending are all being watched and questioned by financial analysts. A gain of 4.5% is expected.

GBP/USD Three Month Chart as of 13th of November 2023

Wednesday, 15th of November, U.K CPI, the inflation numbers from Britain will be important and will follow Tuesday’s Average Earnings Index publication. The GBP/USD has found choppy terrain and the results of the combined numbers from the U.K will affect Forex, even if USD centric considerations remain key.

Wednesday, 15th of November, U.S Producers Price Index, Retail Sales, and the Empire State Manufacturing Index – these reports will be issued at roughly the same time and will factor into sentiment created from the U.S CPI data seen the day before. The combination of all these outcomes will play into the broad markets, and the USD within all major currency pairs. Weaker than anticipated numbers would be welcome by USD sellers. However, until the reports are published wagering on the USD will prove volatile and risk management is encouraged.

Thursday, 16th of November, U.S Federal Reserve Officials – at least 4 U.S Federal Reserve members will be speaking at various conferences. They are sure to give their opinions on the Federal Funds Rate outlook and will be asked to comment on the week’s data already published in the U.S regarding inflation and consumer spending.

Friday, 17th of November, U.K Retail Sales – a gain of 0.3% is expected compared to last month’s negative results. Speculators will react to the consumer driven data and the GBP/USD will again come under the influence of risk sentiment regarding outlook. However, traders need to understand these numbers are largely a result of looking backwards and not forwards regarding outcomes.

Friday, 17th of November, U.S Housing Starts and Building Permits – the American housing industry is being closely monitored and the high costs of mortgages is affecting the U.S marketplace. The Building Permits number is expected to be slightly lower than last month’s outcome. Traders should also keep their eyes on the potential of revisions to suddenly emerge from previous reports.

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Preventing WWIII: This is a 1936 Moment for the Middle East

Preventing WWIII: This is a 1936 Moment for the Middle East

Opinion: The following article is commentary and its views are solely those of the author.

The wonderful historian and public intellectual Niall Ferguson has aptly called the current US-China relationship a “Cold War II” and the current debate in the punditry is if the Israel-Hamas war lead to a WWIII. But what if we are already in WWIII? While Russia and the rest of the world did not expect the war in Ukraine to still be fought nearly three years later, the Russia-Ukraine war is now clearly a part of the fight of the West vs the new Axis – Russia/Iran/China/North Korea. But it was the Hamas attack of Israel on October 7 and the response of the Axis and its allies that have more clearly established the battle lines.

We have Russian and Iranian weaponry vs. American and Israeli weaponry. The Russians and the Iranians are using what we so quaintly call “proxies” for a plausible (un)deniability, sheltering them from retaliation. Iran has its various Shiite militias, with Hezbollah being the strongest and most lethal. Hamas and Palestinian Islamic Jihad (PIF) are the Sunni useful idiots helping the Shiite empire to destroy their Sunni cousins by dying for the cause. The Shiite militias formed and fighting in Iraq and Syria along with the Houthis in Yemen round out Iran’s ability to pretend it is not fighting while creating a genocide of Sunnis in Syria and Iraq and Jews in Israel. On the Russian side we have of course the infamous Wagner Group which in its racist undertaking is taking over and subjugating sub-Saharan Africa in its run to control minerals, gold and diamonds. They are now helping Hezbollah with weaponry and training by providing anti-aircraft weapons. The two groups fought hand in hand saving Bashir Assad, the leader and butcher of Syria, to stay in power so they already have close ties. Wagner is Russia and Russia is Wagner. Hezbollah is Iran and Iran is Hezbollah. The quicker we understand this the better off we will be.

We don’t have any details on Chinese or North Korean weaponry being used by Hamas or Hezbollah, but that might just be a timing issue. China has already decided not to report Hamas atrocities to its people in its official Chinese language news service and are eliminating Israel from its maps. It only reports Israeli’s response and has taken a clear stance supporting its ally, Iran. Will they learn from their Axis allies and also form proxies in Asia to destabilize countries like the Philippines or Vietnam while being immune to retaliation? They don’t need to conquer or even blockade Taiwan if they can destabilize their neighbors while still selling the West all that it wants to buy and inundate our youth via Tik-Tok propaganda.

Japan has realized what this war is about, and is supporting Israel like it never has. Being totally dependent upon the Mideast for its oil, Japan has never been a close friend of Israel. But they have now condemned the Hamas attack while refusing the criticize Israel’s massive response. The Japanese understand well that an Israeli defeat can lead to Chinese dominance in the Indo-Pacific.

Back to the Mideast – it seems we always go back to the Mideast.

Iranian backed Hamas and PIJ launched a brutal attack on Israel.

The Iranian backed Houthis in Yemen declared war on Israel and launched cruise missiles and drones in their opening attack.

Iranian backed and financed Shiite militias are moving to Syria and Lebanon hoping to open two new fronts against Israel.

Iranian backed and financed Hezbollah is attacking from the north in what, for some reason, we are not yet considering a war.

And Iran itself is feeling safe from attack from Israel or the US/West since “only” its proxies are fighting.

This is the remilitarization of the Rhineland of 1936 and a Western betrayal of Israel by hamstringing the IDF by allowing gasoline into Gaza or by a forced cease fire, will be the Munich, 1938.

Are we in WWIII yet? Not being an expert, I don’t know. But the main link tying the Axis together is Iran. They are the most experienced in exporting terror and supporting anti-Western regimes from the Mideast to Africa to America’s doorstep – Latin America. They support and are supported by the Castroite regimes in Cuba and Venezuela and have made deep inroads in Argentina, Brazil and now even Mexico. They are currently nearly as great a threat to the west as is China and probably a greater threat than Russia. A nuclear Iran would create three nuclear powers that could threaten the West as an Axis or independently. The Obama-Biden Iranian policy has been proven a total disaster and its seems that the Biden team is finally understanding this. But they can, in Margaret Thatcher’s famous warning to the first President Bush, “go wobbly” at any moment.

The only way to prevent a full fledged WWIII is Iranian regime change. This would bring the entire Persian Gulf (and its oil) into the Western sphere of influence as China does not yet have the naval power to challenge the US. Hezbollah would be instantly neutralized reducing the threat of war and denying the anti-Western powers another presence in the Eastern Mediterranean. Although the Syrian butcher, Bashir Assad would still have Russia to back him, it is not clear that Russian power alone could keep him in power. In Latin America, Iranian export of terror would stop instantly.

This does not mean that the US needs to invade Iran in order to defeat it. A majority of the Iranian people are sick of the Islamist regime and sick of paying the price for their being ruled by terrorists. The destruction of Iranian nuclear and missile facilities along with the destruction, by air and cruise missiles, of the main Revolutionary Guard bases will be enough. It is not an easy task -but one within the capabilities of the US Navy and Air Force. It is only the Revolutionary Guards that keep the terrorists in power in Iran – the regular Iranian armed forces can be left alone to decide if they want to help overthrow the regime or stay in their barracks. Once they see that the Guards are weakened it is a good bet they will take the side of the Iranian people and help topple the Islamist-terrorist regime.

Regime change in Iran in 2023 will change the global dynamic just as regime change in Nazi Germany in 1936 would have saved 70 million lives in WWII. A failure to act against the source of evil and to cut off the main link in the current Axis will just kick the can down the road – once again. We have appeased Iran enough and if the West and the US don’t act quickly it will have to act while simultaneously fighting off a Chinese attack in the Indo-Pacific – on its own or with its very own proxies – as well as terrorist attempts coming from Latin America and Russian nuclear blackmail in Europe.

And we haven’t even spoken of the West’s moral obligation to prevent a second holocaust, which will be the very first task of a nuclear Iranian regime.

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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Last Week Caught Many by Surprise, as Fed Looms Wednesday

Last Week Caught Many by Surprise, as Fed Looms Wednesday

The ECB obviously decided to highlight how seriously they want to fight inflation last Thursday, when they increased their Main Refinancing Rate by a quarter of a point. The move was not only a surprise to many financial institutions, but displayed a large ‘miss’ by most analysts. While some point out the European Central Bank is powered by Germany who have a historically bad memory regarding inflation, it would also be correct to acknowledge the ECB is trying to protect their own currency against the potential volatility the Federal Reserve could cause with a rather aggressive monetary policy stance this coming Wednesday.

WTI Crude Oil One Month Chart as 18th Sept. 2023

Another broad market influence as this week begins remains the high price of Crude Oil which has now surpassed 90.00 USD per barrel. The higher energy price will certainly not calm inflation anxiousness. Higher energy costs equate into costlier logistics, manufacturing, and agricultural production – this is not a problem central banks wished upon their plates as the final quarter of 2023 gets set to start in a couple of weeks.

Monday, 18th of September, Canada Housing Starts – the housing market in Canada is important to its economy and the nation has enjoyed a housing price bubble for a couple of decades. The past two months have produced higher than expected Housing Starts numbers which is intriguing because Canada is suffering from lackluster growth. The USD/CAD could move slightly on this result, but unless there is a profoundly surprising number from this report, the currency pair will remain focused on ‘other’ things to come.

Tuesday, 19th of September, Canada Consumer Price Index – last week’s CPI and PPI numbers from the U.S came in stronger than anticipated, and Canada’s projected estimates for Tuesday’s results nearly match the nation’s total from last month. Leaving the suspicious notion that inflation could possibly come in stronger in Canada like it did in the U.S last week since these two economies often mirror each other.

Wednesday, 20th of September, China One and Five Year Loan Prime Rates – China continues to be watched closely as investors point out potential dark shadows creating headwinds for the nation economically. The results regarding the loans taken by household and businesses are a solid barometer for outlook if the data is transparent.

GBP/USD 3 Months Chart as of 18th Sept. 2023

Wednesday, 20th of September, U.K Consumer Price Index – the anticipated numbers expects an inflation result of 7.1%, which would be remarkably high and not treated kindly. The results will create havoc in the GBP/USD because not only is the Fed is waiting literally in the wings after this report, but the BoE is going to respond on Thursday.

Wednesday, 20th of September, U.S Federal Reserve Funds Rate – one week ago this day didn’t look like it would cause that much excitement. This all changed last Thursday when the ECB raised its borrowing costs and put financial institutions into a full state of alarm. Yes, the ECB may have acted on its own, but some suspect they know what the Fed is planning on doing already. The Fed is not expected to raise interest rates, but they will certainly sound aggressive and point out inflation remains a danger. Here’s the thing, the ECB sounded quite confident last Thursday, that it will not raise its interest rates again in the mid-term, essentially saying they were done. Did the ECB base this on knowledge that the Fed could do the same thing? What was perceived as a potentially sleepy and quiet Fed meeting and FOMC Statement has now taken on major importance. Forex, U.S Treasuries and global equities will move based on the Federal Reserve’s action and rhetoric. How will the Fed react to higher inflation data?

Thursday, 21st of September, U.K Bank of England Official Bank Rate – the BoE is widely expected to raise the borrowing rate by a quarter of a point. If the Fed did not raise rates the day before and the BoE acts as expected, this could in theory help the GBP/USD gain. However, it should be pointed out following the ECB’s interest rate hike last week, the EUR/USD traded into this past weekend weaker.

Friday, 22nd of September, E.U, U.K and U.S Services and Manufacturers PMI – Europe, Great Britain and the U.S will all release this data on Friday and all expect rather lackluster results. While this data is important, the broad financial markets will likely still be reacting to the actions of the major central banks and the credit crunch problems they are causing globally for consumers and businesses who are facing cash shortfalls and costlier loan expenditures.

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Anxious Results and Outlooks as Traders Brace for Week Ahead

Anxious Results and Outlooks as Traders Brace for Week Ahead

Speculators with visions of taking advantage of day trading perspectives often look for correlations within asset classes to help gain an outlook on another trading vehicle they may be considering. The problem with this like many things for day traders is that sudden gyrations in asset classes technically are often affected by positioning from large players who do not care what the ‘minnows’ are doing. Institutional trading is frequently done with long-term considerations.

S&P500 Index Future Three Months Chart as of 11th Sept. 2023

The Forex market has seen the USD grow stronger since the middle of July against most major currencies. At the same time charts via U.S Treasuries clearly demonstrate yields increasing. This is not a coincidence. Market behavior remains anxious as financial institutions look to lock in a certain amount of ‘guaranteed’ returns. Recent economic data has been lackluster from the U.S and this week important inflation numbers are certain to influence existing sentiment.

A side note for day traders who like to study economic data, ‘revisions’ via published data is starting to set off concerns among traders. Revisions to previous statistics reported are becoming a talking point among investors who believe the numbers they are looking at from many countries, including the U.S, need to be given a certain degree of skepticism. The Wall Street Journal published an article about this a couple of weeks ago.

WTI Crude Oil Three Months Chart as 11th Sept. 2023

In the coming days the price of Crude Oil may make headlines as the commodity enters this week near values last seen in November of 2022. The high price of Crude Oil will spark vocal warnings about potential inflation dangers. Speculative elements within the energy sector will be active and hope to take advantage of its trend. A sustained move above 90.00 USD per barrel would be intriguing.

Some analysts might try to correlate higher energy prices to increased demand from global manufacturing sectors, but this could be questionable considering many spheres are suffering from recessionary pressures. But again, the real facts and dynamics behind a potential sustained climb of Crude Oil prices are complex.

Smaller traders need to understand the news they are reading today was known by ‘insiders’ many days before and they have already acted on their knowledge to take advantage of prices.

The cuts in production from Saudi Arabia and other producers has sparked speculative influence, and perhaps the narrative that outlook for more Crude Oil demand could build if the U.S continues to demonstrate a ‘soft landing’. The chatter and explanations for changes to price are almost limitless and day traders need to be aware they will not be privy certain information.

This leaves the door open for day traders to consider trying to understand market behavior within the financial world. The answer for short-term speculators who are wagering on price direction is not a simple interpretation of technical charts, they should also consider fundamental knowledge of the asset mixed with an understanding of current market dynamics as sentiment shifts among institutional players.

In other news to look out for this week, traders who are active in the cryptocurrency space should continue to monitor the support levels that Bitcoin and Binance Coin are traversing. Incremental drops in value continue to be seen and a sustained reversal higher has been difficult to attain.

Monday, 11th of September, China New Loans – the amount of borrowing from businesses and consumers within China will provide insights regarding the strength (or weakness) of the domestic economy.

Tuesday, 12th of September, U.K Claimant Count Change and Average Earnings Index – the jobs numbers from the U.K will provide the GBP/USD with a bit of additional impetus. The U.K economy is in the spotlight and critics have become loud as many point to Brexit problems, which they claim are causing complications. However, within a global economy that is under pressure the fact that conditions in Britain are difficult doesn’t take a lot of time to find other correlations.

Tuesday, 12th of September, Germany Economic Sentiment via ZEW – the reading is expected to show a negative outlook again from the responses of institutional investors based in Germany. A result of minus -15.0 is the forecast. The report could shake the EUR/USD a bit momentarily.

Wednesday, 13th of September, U.K GDP – growth numbers will certainly get plenty of attention for Britain. The anticipated number is minus -0.2%. If the result is worse than the recessionary estimate it could spark more negative sentiment.

Wednesday, 13th of September, U.S Consumer Price Index reports – inflation statistics will be studied carefully and impact Forex immediately if the published results do not meet expectations. The Federal Reserve, institutional investors and the broad financial markets will react to the CPI data.

Thursday, E.U European Central Bank Main Refinancing Rate – the ECB is not expected to make any changes to borrowing rates. The European Central Bank is also anticipated to warn that economic conditions remain challenging and they are monitoring inflation and growth. Anything more than these words via the ECB Monetary Policy Statement and Press Conference could spark some EUR/USD price action.

Thursday, 14th of September, U.S Producer Price Index – like Wednesday’s inflation numbers, the PPI statistics will affect market sentiment regarding outlook and interpretations regarding the potential responses from the Federal Reserve.

Thursday, 14th of September, U.S Retail Sales – this data will give traders insights regarding the spending habits of U.S consumers, which is a key barometer for equity traders regarding consumer driven stocks, and also because an increase would underscore solid economic sentiment from the public.

Friday, 15th of September, China Industrial Production and Retail Sales – these two reports will provide additional insights about the Asian giant. Global investors continue to be concerned about the direction of the Chinese economy. Slight gains are forecast for both publications.

Friday, 15th of September, U.S University of Michigan Consumer Sentiment – the preliminary report is expected to have a reading of 69.2 which would be below the previous reading.

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Federal Reserve Bank Decision and FOMC Statement Wednesday

Federal Reserve Bank Decision and FOMC Statement Wednesday

Monday, 24th July 2023, E.U Flash Manufacturing and Services PMI – a slew of Purchasing Managers Index readings will come from European Union nations including Germany and France. Projected outcomes are expected to show slight improvement in the Services readings and mixed results from the Manufacturing sector. The EUR/USD may get a momentary nudge from the published numbers.

EUR/USD 3 Month Chart as of 23rd July 2023

Monday, 24th July 2023, U.K Flash Manufacturing and Services PMI – the British economic reports are anticipated to come in below last month’s readings. The U.K did report slightly better Retail Sales numbers last week, but a Consumer Confidence outcome was weaker than expected. The GBP/USD might react briefly to the U.K PMI data.

Monday, 24th July 2023, U.S Flash Manufacturing and Services PMI – the reports from the States are forecast to be below last month’s numbers. U.S data produced nervous and weaker economic insights last week from the Housing sector. The Federal Reserve will certainly give some attention to the PMI data as they try to gauge the strength of the U.S economy while likely preparing to hike the Federal Funds Rate on Wednesday. The PMI statistics could factor into the Fed’s outlook, which is the crucial ingredient that financial institutions want to understand and still have skepticism about while considering the Federal Reserve’s potential actions later this week.

Tuesday, 25th of July 2023, Germany ifo Business Climate – the results are expected to be slightly weaker than last month, showing businesses in Germany are not optimistic about current conditions and outlooks.

Tuesday, 25th of July 2023, U.S CB Consumer Confidence – the report is anticipated to show U.S consumers are feeling more confident about their spending habits. If this report is stronger than expected, it could be one final clue before the U.S Federal Reserve springs into action the next day.

Wednesday, 26th of July 2023, U.S Federal Funds Rate and FOMC Statement – most financial institutions are prepared for a hike of 0.25%, which would bring the key borrowing cost to 5.50%. This number has been anticipated for a handful of weeks and any deviation would cause volatility. Forex has largely priced in the rate hike. Speculators need to pay attention to the FOMC Statement regarding outlook regarding comments on inflation, growth and what the Fed is prepared to do moving forward.

Because U.S inflationary price pressures showed a decrease recently, many financial institutions are likely betting on a slightly more optimistic sounding FOMC Statement. The question is if the Federal Reserve will risk sounding dovish, or continue to voice disciplined rhetoric about its ability fight inflation as needed and keep a middle ground. For all the criticism of the U.S Federal Reserve if it can raise interest rates without causing a credit crunch on mid and small sized banks the remainder of the summer, that would be a victory – particularly if it is perceived the U.S central bank will not raise hike the Federal Funds Rate the remainder of the year. However, that remains to be seen.

Thursday, 27th of July, E.U European Central Bank’s Main Refinancing Rate and Monetary Policy Statement – the ECB is expected raise their key lending rate by 0.25% and back up their recent ‘tough’ and heightened rhetoric regarding inflation. Again, day traders should understand the interest rate hike to 4.25% has been anticipated and largely digested into Forex. The question is the ‘voiced’ concern from the ECB within its Monetary Policy Statement. Financial institutions will react to the ECB Press Conference led by Christine Legarde, which comes about half an hour after the release of the Monetary Policy Statement.

USD/JPY 3 Month Chart as of 23rd July 2023

Friday, 28th of July, Japan BoJ Policy Rate and Outlook Report – the Bank of Japan is the one global central bank that marches to its owner drummer and this will not change in the near-term. The BoJ is expected to keep its policies of low interest rates in place, voice concern about inflation and likely say their ‘boat’ remains steady on the water. The USD/JPY will have reacted before to the rhetoric from the Federal Reserve in the middle of the week. Yes, the USD/JPY could see a flourish of volatility on Friday, but most of it will have likely been seen already on Wednesday and early Thursday.