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AMT Top Ten Miscellaneous Battlefronts for the 7th of Sept

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Battlefronts for the 7th of Sept

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

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

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

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

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

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

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

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

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

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

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Has a Great Selloff Begun? The Fed Holds a Crucial Card

by with No Comment AMT MarketsAssetsFeatured Highlights

Has a Great Selloff Begun? The Fed Holds a Crucial Card

Once upon a time the Federal Reserve caused a massive amount of fear to simmer and then boil over in the global market place but this is no fairy tale, the date was the 5th of August 2024 to be exact. However, the trigger causing events to unfold was pulled on Thursday the 31st of July. The Bank of Japan increased their policy rate to 0.25%, which was an increase of 0.15%. Then later on the same day the U.S Fed published a cautious sounding FOMC Statement followed by an inconclusive Press Conference, which left investors scratching their heads.

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Nikkei 225 Three Month Chart as of 4th September 2024

Markets started to react with scorn on Friday the the 1st of August, particularly when the U.S jobs numbers showed a big miss with the Non-Farm Employment Change numbers, and also a lower than anticipated Average Hourly Earnings report was produced. Because Japan was essentially closed for equity trading when the U.S jobs data was released late on Friday, the Nikkei 225 responded with fury on the 5th of August. Global markets essentially crumbled over the next twelve hours as a massive selloff was sparked.

Some analysts noted the move lower in equity indices was an overreaction and the wild Forex trading would calm down, and this began quite predictably on the 6th of August. In essence the bad jobs numbers from the U.S proved the Federal Reserve was being too cautious and would need to begin sounding more aggressive regarding interest rate cuts. This dynamic played out when Fed Chairman Jerome Powell made his Jackson Hole Symposium speech on the 23rd of August and admitted the Fed would have to begin cutting interest rates – and he seemed to indicate the use of a plural regarding Federal Funds Rate cuts. This dynamic essentially confirmed what most financial institutions had bet on starting in late July via Forex. Equity indices which were able to recover plenty of lost ground after the 5th of August, also built up more momentum per Powell’s rhetoric at Jackson Hole.

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USD Cash Index Three Month Chart as of 4th September 2024

However, Powell while sounding more dovish did not say how much the Fed would cut by in September. And based on the history of the Fed’s rather cautious and very passive monetary policy over the past handful of years, many financial institutions likely felt a cautious outlook should include a 0.25% cut on the 18th of September and then another 0.25% move lower in November. In the last week of August – yes, last week – equity markets started to show signs of nervousness again and the USD began to produce choppy trading before going into the Labor Day holiday.

Yesterday’s large selloff in assets has sparked more worries. While it is clear U.S inflation data has shown signs of erosion, the Federal Reserve has not indicated in any form that a Federal Funds Rate cut of more than 0.25% should be expected in two weeks. And perhaps not so coincidentally, the U.S Non-Farm Employment Change and Average Hourly Earnings data will be published this Friday. The outcome of these two reports will shake the ground for investors and financial institutions may be positioning for the drama.

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Nvidia Three Month Chart as of 4th September 2024

An interesting three month barometer looking backwards has been created by Nvidia which has been choppy. While it remains only a ‘stock’, the company’s earnings and outlook are firmly on center stage for many investors. Nvidia has soared in value the past year. While some may feel that the asset is within a bubble, the company continues to post impressive earnings and its outlook appears bright as new software and hardware relies upon its products and development promises. Some analysts have said that earnings reports from Nvidia are now just as important as U.S economic data like inflation and jobs numbers. However, that is overstated, but let there be no doubt that Nvidia’s trading results over the next six months will probably tell us a lot about global market conditions and behavioral sentiment within financial institutions.

Day traders should not panic, they have the capability of watching from the sidelines if they choose over the next few days. The USD is still standing on weaker legs and Gold remains near 2,500.00 USD. Investors who have long-term holdings will certainly be nervous and want to make sure their mid-term yield perspectives are alright and their long-term targets are safe. Speculators small and large know the Fed will definitely cut the Federal Funds Rate in September. Yet, the trillion dollar question is if the Fed will only cut by 0.25%?

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Gold Three Month Chart as of 4th September 2024

If the U.S jobs numbers this Friday come in below anticipated results once again, the Fed should strongly consider a 0.50% basis cut to the Federal Funds Rate on the 18th, that is what financial institutions would certainly like to see. They should also consider coming out with a brief statement this Friday to make sure investors know that a more aggressive stance will be taken if the jobs numbers are weak. However, as long time day traders and investors know, it is not in the Fed’s nature to grab the microphone loudly, unless a seismic event is taking place in the world and inflicting harm on the financial markets. Are investors now trying to warn the U.S Federal Reserve that they will ignite a major selloff unless the Fed becomes more aggressive?

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

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

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

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

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

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

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

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

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

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

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

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

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

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

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Summer Optimism as Forex and Equities Focus on Fall Outlooks

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Summer Optimism as Forex and Equities Focus on Fall Outlooks

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

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

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

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

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

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

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

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Gold Six Month Chart on the 27th of August 2024

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

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

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

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

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

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

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

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

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

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

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

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AMT Top Ten Miscellaneous Rays of Light for 23rd of August

by with No Comment AMT MarketsArtificial IntelligenceFeatured Highlights

AMT Top Ten Miscellaneous Rays of Light for 23rd of August

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10. Word of the Day: Like crepuscular animals which are active during twilight, large market players are ruminating as their summer hiatus draws to an end over the next week and a half. Plans for coming hunts are being formulated as leisure concludes for financial institutions preparing to work in the shadows.

9. Scrolling Failures: Lack of solid results on search engines are becoming a growing annoyance. Is it just us? An abundance of poor information via defined searches on the internet and finding what is sought is becoming increasingly problematic. Is AI being allowed to do too much while still too dumb? AI doesn’t know when it is wrong. Competitors to Google and others are sought.

8. How Dare Us: The postponement of imposed dates regarding energy policy changes are multiplying. The end for the classical use of oil, coal and nuclear is not near. Efficient power is evolving, but this will have to include ‘antique’ generation and grids. The demand for electric vehicles are being confronted with declining sales via U.S consumers. Tangible technology needs precise planning, not apocalyptic rhetoric which tries to scare people.

7. Middle East Calm: The storm is being limited within a tea cup for the moment. The potential for a dangerous boiling painful mess still exists. ‘Serenity now’ remains a mantra for those who need to pay attention as chagrin and anxiousness mix.

6. Fed Retreat: The FOMC Meeting Minutes released this week showed some Fed members remained cautious, while others banged the drum louder regarding interest rate cuts. However, a Fed Funds Rate reduction is almost a 100% certainty for the 18th of September. The question now is what the Fed will do in November. Fed Chairman Powell and a slew of other renowned global central bankers will speak today and tomorrow at the Jackson Hole Symposium. Financial institutions largely believe they know what is going to be said, but comments from Bank of Japan and Brazilian leadership could prove to be informative and entertaining for central bank nerds. Monday could be volatile for USD/BRL traders.

5. VIX: The CBOE’s Volatility Index climbed to the 56 vicinity on the 5th of August as panic grew via widespread overreactions to hyperbole ripping through the markets. The fear gauge is near the 17.55 ratio as of this writing. Market calm has resumed across the board as financial institutions and day traders have been able to achieve a pleasant tone again. Traders who use the VIX as a template regarding the potential of risks suddenly cascading into assets should keep their eyes on the index, which went to a low around the 14.45 mark on Monday. Yet, the slight incremental climb the past few days could be coming from folks still speculating on volatility which may not develop near-term.

4. Barometers: Gold is lingering slightly below 2,500.00 for the moment, this after having achieved a record high on Tuesday when it touched the 2532.00 apex. WTI Crude Oil is near 74.00 USD per barrel and is maintaining a polite value range. Speculatively, Cocoa is again above 9,000 USD per ton and Bitcoin has fought its way above 61,000 this morning. Risk appetite remains stable for the moment.

3. Forex: USD/JPY, EUR/USD, even the USD/ZAR have been able to hold onto their recent trends as USD centric weakness remains viable. Traders who were looking for huge moves in FX this week have likely been disappointed. Retail speculators need to understand financial institutions have been positioning for a weaker USD since the tail end of July. Market players may be quite pleased regarding current Forex equilibrium, which may allow technical traders the ability to take advantage of existing behavioral sentiment, this as reversals flourish and the next big wave of impetus is awaited. Next Thursday’s U.S Preliminary GDP numbers may deliver some noise.

2. Cassandras: Market experts who proclaimed a long-term stock market crash in early August have crawled back into their caves to take cover and percolate their next fear mongering tactics. This after the latest round of predicted catastrophes have vanished. While the major U.S stock indices are not at record highs, they have recovered plenty of lost ground and appear ready for more days in the sun.

1. Political Winds: The curtain closed on the Democratic National Convention in Chicago last night without a serious hiccup. Kamala Harris and Donald Trump now enter a crucial phase of campaigning, and will get plenty of attention as they go into attack mode. The next big event for Harris and Trump will be their televised debate on the 10th of September. Will the outcome prove to be a devastating storm for one of the candidates?

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Tranquility: Forex, Equities and Treasury Yields Drama-Free

by with No Comment AMT MarketsAssetsFeatured Highlights

Tranquility: Forex, Equities and Treasury Yields Drama-Free

Sometimes no news is welcome. The markets though not devoid of drama, have been relatively tranquil. It is obviously summer in the northern hemisphere which helps bring about quiet, this since many ‘active’ market participants are off vacationing having been allowed to go on holiday. The implosion in the markets on the 5th of August after the dangerous riptides created by the combination of the Federal Reserve and Bank of Japan have certainly eased and evidence of the chaos is fading. Retail traders who are always looking at charts and for opportunities may have even been able to rest too the past week and a half.

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USD/JPY Three Month Chart as of 20th August 2024

The USD/JPY as of this moment is near 147.185. The Nikkei 225 has recovered lost ground from over-reactive selling on the 5th of August. The value of the Japanese equity index is within extremely intriguing territory as financial institutions are clearly taking a wait and see approach regarding more BoJ and Fed rhetoric, combined with fundamental analysis of Japan’s economy and their companies in consideration. It is a healthy market dynamic, particularly via a notion the Nikkei 225 having reached an early August equilibrium is a solid result, this if you have a long-term viewpoint.

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Nikkei 225 Three Month Chart as of 20th August 2024

The GBP/USD, EUR/USD, USD/SGD have all seen better results for traders who have been wagering on USD centric weakness. Even the USD/ZAR has produced a solid trajectory. U.S Treasuries yields are falling.

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Gold Six Month Chart as of 20th August 2024

Yes, day traders definitely have different approaches compared to long-term investors, but if a speculator who is accustomed to quick trades synthesizes an outlook using the behavioral sentiment of long-term institutional players, they might find it helps build some foundations which help perceptions when deciding what to pursue. The use of barometers is always good too, this often gives a trader insights regarding market mood even if it is not an asset class they want to pursue. Gold is within record territory as it hovers around 2,500.00 USD per ounce.

Investors can argue all day and night about interpretations regarding results. The trading within gold the past six months, even since November of 2022 opens doors to a vast amount of complex explanations and narratives. They are too numerous to argue here, but the ability of the precious metal to march higher should continue to be watched. The recent surge higher since the end of June suggests – but it is again, only an explanation after the results have been seen – that gold traders believed the Federal Reserve would have to eventually capitulate and stop behaving hawkish about interest rates.

And this brings us squarely to this weeks events. Yes, the DNC is underway in Chicago and hopefully it provides a rather calm atmosphere free of political chaos via unwanted demonstrators. If investors can focus on the Fed’s FOMC Meeting Minutes report which will be published on Wednesday this would be good.

Because the Fed refused to sound dovish in their last FOMC Statement this created the potential for massive retaliation by institutional traders, and when coupled with the BoJ hike and their rhetoric, market turmoil in Japan and globally promptly ensued for a few days. However, because of recent inflation data again highlighting U.S prices via Producer Price Index are stable and decreasing in some sectors, and CPI has continued to come in below anticipated results, investors again firmly believe the Federal Reserve will definitely cut the Fed Funds Rate by at least 0.25% in September, and may be in a position to cut in November. Thus, the weakness and volatility of the USD which is clear to see via the USD Cash Index results.

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USD Cash Index Three Month Chart as of 20th August 2024

Yet and potentially amusing tomorrow, the Fed’s FOMC Meeting Minutes may simply restate the cautious and very passive rhetoric from the last FOMC Statement. This because the Meeting Minutes are a reflection on thoughts shared at the Fed meeting, and we know what that outcome was already. Meaning tomorrow’s publication may scare some investors, but it shouldn’t. Tomorrow’s Fed paper may prove to be a non-event.

This sets the table for the Jackson Hole Symposium in Wyoming which starts on Thursday to produce a myriad of central banker statements led by Jerome Powell and his counterparts from the European Central Bank, Bank of Japan and Bank of England. The event is likely going to be important, but much of the talk which occurs in closed meetings is unlikely going to be made public.

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Reactions and Risks as Trading Clarity Remains Hard to Grasp

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

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.

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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.

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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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Central Banks and Summer Storms for Traders as Actors Change

by with No Comment AMT MarketsAssetsFeatured Highlights

Central Banks and Summer Storms for Traders as Actors Change

Yesterday’s rather quiet start to the week regarding economic data allowed for traders to look over the financial markets before the onslaught of central bank mayhem hits on Wednesday. The Forex market has seen rather interesting results the past few weeks as behavioral sentiment has clearly shifted (for seemingly the tenth or so time) towards a more dovish outlook regarding the U.S Federal Reserve. Expect stormy waters this week in currency markets.

The usual lazy summer of the markets has had to deal with political winds in June and July as Britain, France and the U.S have delivered rather intriguing mischief via election results and changes of leadership. However, the world has survived and this is a lesson new day traders need to understand quickly. While tomorrow may not be known, experienced market players have seen these dramas before, they might be new episodes with different actors, but the theme remains the same for veterans of the markets.

Although powers shift, a focus on outlooks is often what matters. People and institutions are in pursuit of profit. This week central banks will be heard from and the rhetoric delivered will affect assets.

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GBP/USD Five Day Chart on the 30th of July 2024

Monday, 29th July, U.K assorted data – Mortgage Approvals, Net Lending to Individuals and M4 Money Supply data was released to various fanfare yesterday and did not shake the GBP/USD dramatically. However, making more important news perhaps was the public statement by Rachel Reeves, who is the new Chancellor of the Exchequer, saying there is an existing 22 GBP billion ‘black hole’ within the U.K government finances that was not accounted for by the Conservatives. In other words the blame game between the new Labour bosses and now banished Tories has begun. While the GBP/USD dropped a bit on this development, it did not crush the currency pair as it returned to the lower depths of its higher three month technical chart.

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GBP/USD Three Month Chart on the 30th of July 2024

Tuesday, 30th July, E.U Gross Domestic Product – a variety of GDP reports came from across the continent this morning, including France which recorded a slight gain of 0.3% and the German numbers which recorded a minus -0.1% result. The numbers show the E.U remains in trouble for the larger economic nations. Spain did show an improvement, but it is nothing that should start parades of celebration.

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EUR/USD One Month Chart on the 30th of July 2024

Tuesday, 30th July, U.S CB Consumer Confidence – this sentiment report for the U.S consumers will get some notice today, but financial institutions are largely braced for tomorrow’s U.S Fed rhetoric. The trading of Forex, gold, equities and their indices will likely remain choppy today as folks take on cautious tones.

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Wednesday, 31st July, Bank of Japan Policy Rate – and here we go ladies and gentlemen. The BoJ can never be counted on to do what is logical in the eyes of many analysts outside of the central bank’s inner circle. Japan has pursued a soft devaluation of the Yen this year. The Bank of Japan should consider an interest rate hike to the 0.20% level from the 0.10% ratio, but will they? Speculators need to be extra careful with the USD/JPY over the next 30 hours. If the BoJ somehow decides to raise and the U.S Fed makes it known they will consider more than one interest rate cut this calendar year, the USD/JPY could see swift price velocity lower. Perhaps the BoJ will stay muted and cautious, allowing for the currency pair to go higher again. However, there have been some signs large players suspect a slight interest rate hike could come tomorrow from the Bank of Japan. Day traders are advised to be extraordinarily careful.

Wednesday, 31st July, U.S Federal Reserve FOMC Statement – the Fed is not going to lower their Federal Funds Rate during this meeting. But what they are expected to do via their FOMC policy rhetoric is to say a cut is likely in September considering the current economic data, and that if inflation continues to show signs of erosion another cut will be considered in November. Recent economic data in the U.S has been mixed. GDP numbers jumped higher, but importantly the GDP Price Index was lower than anticipated last Thursday, and the PCE Price Index on last Friday matched expectations (and importantly didn’t rise). If the Fed sounds optimistic about an interest rate cut in September this will match the expectations of many financial institutions. If they sound cautious about a possible second rate cut later this year, this could cause a hiccup for those with weaker USD centric outlooks over the mid-term.

Thursday, 1st August, U.K Bank of England Official Bank Rate – the BoE is expected to lower the borrowing rate by 0.25% to 5.00%. The GBP/USD has been trading higher in July based on a cocktail of a weaker USD stance. There is plenty of reason to believe the less than sterling economic data from the U.K will help deliver the lower interest rate from the BoE this week. The BoE is likely to have spoken with the Fed and ECB to correlate a gameplan. The Bank of England Monetary Policy Summary should be given attention. GBP/USD traders will have responded to the Fed’s outlook from Wednesday, opening the door to plenty of volatility after the BoE speaks. Meaning that Forex speculators should be extremely cautious if they are pursuing short-term wagers which will be akin to surfing a violent storm.

Friday, 2nd August, U.S Non-Farm Employment Change and Average Hourly Earnings – this data will be anti-climatic. The results from Wednesday through Thursday from the central banks will take a lot of the bang out of these reports. The earnings report should be given some attention, but the financial markets will likely be trading on behavioral sentiment generated over the prior days.

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

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

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

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

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

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

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

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

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

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

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

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

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

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AMT Top Ten Miscellaneous Missiles for the 21st of June 2024

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Missiles for the 21st of June 2024

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10. Say Hey Kid: Baseball legend Willie Mays passed away earlier this week. He was a beloved player on the New York and San Francisco Giants in the 1950s, 1960s, and early 1970s. He might have been the best five tool baseball player of all-time.

9. AI Apocalypse: Talk about selling Nvidia shares to cash out of the super hot Artificial Intelligence tech boom on Wall Street might be considered the safe thing to do in order to protect profits. However, betting on the existing ‘machine learning’ gold rush in the stock markets to possibly end soon, thus turning into a ‘dot com’ like bubble bursting in the spring of 2000 could be misguided. The ‘dot com’ exuberance essentially started in 1995 and ran for almost five full years. The Artificial Intelligence surge may still have a lot of room to run.

8. Simmering Crypto: Bitcoin, Ethereum, and Binance Coin all remain at lofty prices, but they have lost value since touching highs in the first week of June. Trading volume of cryptos – including BTC/USD – is still below its peak of 2021 and early 2022. While the introduction of ETF products for Bitcoin has gotten institutional money involved, many individual ex-traders remain cautious. Former illustrious speculative plays like Dogecoin and Shiba Inu have turned into niche wagering cesspools.

7. Hezbollah Poker: Hassan Nasrallah delivered a surprise statement earlier this week when he proclaimed if there is an escalation between Hezbollah and Israel, that Cyprus could be attacked by missiles. The U.K still maintains sovereign military bases at Akrotiri and Dhekelia on the island of Cyprus. Direct fire from Hezbollah on an E.U member nation would be a major intensification of the Middle East conflict. Nasrallah may believe the rather limited response by the West to the Houthis attacks in the Red and Arabian seas, makes his threats on Cyprus an objective guise to get the West to pressure Israel to hold their fire.

6. Commodity Watch: WTI Crude Oil price is over 81.00 USD as of this writing and Gold is near 2365.00 per ounce. The price of energy needs to be watched because of its potential impact of inflation. WTI prices have been rather tame the past two and half months, but have climbed the past week. The precious metal remains within sight of highs and has been lingering within an elevated range since the middle of April. Cocoa for those interested is back below 10,000.00 USD per metric ton.

5. Shifting Sentiment: The Mexican Peso and Brazilian Real have lost value as politics in Mexico and Brazil are causing nervousness among financial institutions. The governing political parties in both nations are trying to reach for new powers, and the selloff of the two currencies against the USD have been clear. Morena, the leftist political party governing Mexico, is seeking controversial judicial reform which is seen as an attempt to gain more political influence. Lula da Silva’s Workers’ Party is attempting to take the head of the Central Bank of Brazil, Roberto Campos Neto, to court to try and muzzle his fiscal viewpoints. The USD/MXN is near 18.31650 and the USD/BRL is around 5.4539 as of this writing. Rand traders who have seen a bearish USD/ZAR trend emerge the past week and a half because of renewed optimism in South Africa might find the spats in Mexico and Brazil intriguing.

4. Euro Barometer: The first French election will be held on the 30th of June, the second on the 7th of July. The contest is shaping up as a election between the Left and Right. Political coalitions are being formed rapidly. The attempt to coalesce on the Left is an obvious sign that politicians feel threatened with the prospect of sweeping losses. Media noise is certain to boom and be exaggerated in the coming days as warnings about this election potentially affecting all of humankind litters the airwaves. Macron and other politicians may find tough days ahead as they apologize for policy failures and get punished via the election outcomes. The EUR/USD is close to 1.06931 for the moment.

3. China Woes: Economic data from the housing sector continues to show a downwards trajectory regarding home values in the nation, and it is having an impact on consumers as their net worth suffers and affects spending habits. Not only are property values still dropping at a rapid pace, but recent Factory output data has come in below expectations. China is tentatively scheduled to release Foreign Direct Investment numbers soon.

2. Summer Doldrums: Investor behavioral sentiment appears to be in a wait and see mode as as more impetus is awaited and large players grow cautious. The U.S will issue PMI manufacturing and services data today, but the results will have a limited effect. The U.S Juneteenth holiday which was celebrated on Wednesday and the return of traders yesterday did not rejuvenate optimism. The Nasdaq Composite and S&P 500 lost some ground. While the Dow 30 did gain slightly yesterday, the index has been treading water compared to the Nasdaq and S&P over the past month.

1. Geriatric Debate: Next Thursday the 27th of June, President Biden and former President Trump will debate. The televised event will be watched by American voters and the world. Not only will the debate deliver potential impetus to financial assets if there is a clear winner, but it may provide a large wagering environment for betters who gamble on which Presidential candidate will be the first to go off script. People in the U.S desire a discussion about the economy, foreign policy and immigration, this while hoping for a lack of mishaps, hyperbole and demagoguery which is unfortunately quite likely.

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Forex Noise: Influences from Suspicious Data and Rhetoric

by with No Comment AMT MarketsAssetsFeatured Highlights

Forex Noise: Influences from Suspicious Data and Rhetoric

Yesterday’s GDP numbers from Japan served as evidence regarding things to be considered this week regarding the rather complex web central banks and governments have created for financial institutions and day traders. There are plenty of risk events ahead that should be given attention this week.

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USD/JPY Six Month Chart on the 11th of June 2024

The USDJPY is now again in a dangerous value range near-term as it battles within a higher trend. The BoJ did intervene twice – in late April and early May – to try and damper speculative buying zeal of the USD/JPY and stop overly exuberant selling of the JPY. But they have been acting duplicitous as they have also wanted to no doubt allow a weaker Yen – while keeping its value within control. The BoJ has likely been hoping the Fed is going to sound more dovish this week, but if the Fed sounds more cautious than had been anticipated it could set the table for remarkably dynamic price action in the USD/JPY this week and next. If the currency pair moves too high, the BoJ could intervene again, particularly after the Fed’s FOMC pronouncements. So traders need to be careful.

Traders likely know that tomorrow CPI data and the Fed are on the schedule and these will be key events, but the noise generated around the inflation statistics and FOMC rhetoric should be viewed through the eyes of not only potential reactions from financial institution behavioral sentiment, but the possibility many of the ‘big houses’ have already positioned for the outcomes they believe will play out. In other words day traders should be ready for whipsaw trading results in the immediate aftermath of the Fed’s FOMC Statement and Press Conference.

Last week’s Non-Farm Employment Change numbers provided intriguing forensic data which will stir the suspicions of large players in Forex, equity indices and Treasuries. The jobs numbers via the headline stats looked strong. However, it must be said U.S government hiring continues to pick up, which can be looked at as an expensive way to fuel a sugar high for Americans as the States go into an election season.

Also full time workers continue to add part-time work to their tasks, this to battle rising inflation no doubt which is making their paychecks actually less effective, even if they are getting raises and receiving extra money from the added work loads they are taking on. The costs of products in the U.S are outpacing rising income. Also there is a fact that while part-term hiring is on the rise, full-time hiring is declining along with the average amount of hours employees are working per week.

The Gross Domestic Product numbers from the U.S are in decline. If folks push aside their political ideologies and look at real job numbers on the back pages of Friday’s report, and then ask why people are working less hours it is easy to conclude many businesses are actually cutting back expenses in order to try and remain profitable.

All three major stock indices from the U.S remain in sight of record highs, while there is caution surrounding the mid-term, investors still seem to be banking (wagering) on the U.S Fed to become more dovish over the long-term. Part of this analysis includes the belief that weaker GDP will eventually start to impact inflation and that this conclusion will affect the decision making of the U.S Federal Reserve at some juncture.

The Fed finds itself in a precarious position right now. They need to sound cautiously optimistic. It is an election year and they know this too. The Fed cannot publicly say they want growth to slow down because that would irritate most Americans and the White House, but they know full well that slowing GDP eventually should lower demand for products and thus erode inflation pressures.

Yet turning this full circle, the hiring being done by the U.S government, and the as of yet unmentioned fact the U.S  Treasury has increased its sales of Two Year Notes since around November; and the record amount of money the U.S is spending via a slew of suspicious costs like the ‘student loan forgiveness’, creates a muddled and over-heated fiscal policy which could be interpreted as trying to buy votes from those receiving the gifts. In other words, while the Fed is trying to stress it is battling inflation with higher interest rates and anticipates lowering them eventually, other facets of the U.S government are making this difficult because of the record amount of spending and interest rate payments they are making on short term Treasury notes. Jobs and money in the short-term are candy for voters, but the government has problems ahead regarding conflicting policies because it can lead to more economic problems.

So what do financial institutions think, well they are focused on returns for their clients. They are also looking ahead and trying to swim waters that are murky but offer the ability to profit for themselves too. They might believe they know the landscape just as well as the Fed does, and financial institutions also understand what will be said and can be done may be two different things. What to expect moving forward therefore remains confusing over the mid-term for everyone.

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Gold Six Month Chart on the 11th of June 2024

Gold remains highly valued and traders should continue to use it as a barometer. Speculative players are also betting on gold as the USD and its ultimate mid and long-term direction remains complex. The recent downside price action after making record highs in May for the precious metal could reflect the belief the USD is going to become weaker over the mid-term.

Also it should be noted that a handful of commodities are being influenced by an abundance of speculative forces in Copper, Coffee and Cocoa. There has been a lot of talk surrounding the meme stock GameStop the past month. Experienced commodity traders understand the dynamics of speculative influences, pump and dump schemes better than most. Traders tempted to wager in these commodities should ask the same questions speculators in GameStop need to, what is the real value and when will the pin pop the balloon?

Monday, 10th of June, Japan Final GDP Price Index – the result in yesterday’s inflation data came in negative with a climb of 3.4% compared to the expected outcome of 3.6%. This is noteworthy might create more cautious rhetoric from the Bank of Japan later this week.

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GPB/USD One Month Chart on the 11th of June 2024
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EUR/USD Six Month Chart on the 11th of June 2024

Wednesday – 12th of June, U.S Consumer Price Index – the inflation reports will be watched by all market participants in the financial world. The broad monthly CPI result is expected to come in at 0.1%, which would be below the previous months’s outcome, but the Core monthly statistic is anticipated to match the previous result of 0.3%. The CPI numbers will certainly set the tone for the price action to come in Treasuries, equity indices and Forex. Weaker numbers could spark a selloff of the USD. Stronger numbers could create more bullish ability in the USD. No matter the outcome of these CPI numbers, the U.S Federal Reserve will be standing in the shadows and ready to take center stage a handful of hours later.

Wednesday – 12th of June – U.S Federal Reserve’s FOMC Statement and Federal Funds Rate – unless there is a massive surprise tomorrow, there will be no interest rate cut from the Fed. Anyone who was holding onto the idea of a cut, had these wrong thoughts killed off this past Friday because of the ‘better’ jobs numbers report. The Fed’s monetary policy statement is likely to try and sound cautiously optimistic and will certainly include the residuals of the CPI reports filed earlier in the day. However, financial institutions will want to hear if the Fed is leaning into the notion of cutting the Fed Funds Rate late in the summer as a possibility, or if the Fed sounds so cautious that they suggest a rate cut will not happen until later this year. Let’s remember this is an election year. Yes, the Fed is supposed to be an independent body, but like the Treasury there have been signs developing that the ironclad independence of Fed rhetoric can be influenced by U.S government influences from higher up the ladder. Or perhaps it is just all a happy coincidence and the White House, Treasury and Fed all simply agree on policies which remains rather questionable in the eyes of financial institutions and analysts.

EUR/USD Consideration into Wednesday

On this note, price action in the EUR/USD is a good representative of behavioral sentiment and the different ways it can be interpreted. EUR/USD will need attention during and after the U.S Federal Reserves’s policy rhetoric. The ECB cut its interest rate last week. However the ECB refused to say it will cut rates more – leaving the EUR/USD in a neutral position. The EUR/USD sold off on Monday, this after selling off strongly this past Friday after the U.S jobs numbers.

The Fed was looked on as having to become more dovish this Wednesday, but that is now in question because of the suspiciously strong U.S jobs numbers this past Friday. And then there is the outcome of the European Parliament voting this past weekend and a turn towards the right which many in the media seem to believe is the end of the democracy, but may simply represent that some citizens of Europe want a return to law and order, solid economic practices, and respect for their historical and cultural heritage.

Meaning that financial institutions aren’t likely to be too scared about the voting outcomes regarding the European Parliament and are likely more focused on the coming U.S inflation report and FOMC meeting results. However, as much as Forex traders are considered to be sophisticated and financially astute, they still reacted to the stronger selling which was sparked yesterday. Perhaps the EUR/USD results the past couple of days will prove to be like the reaction in the India markets, this when the Nifty 50 selloff occurred early last week upon election results being in question, only to experience a reversal later.

Thursday, 13th of June, U.S Producer Price Index – these inflation reports will be watched, but the reaction to the outcome is likely to be muted because of Wednesday’s dynamics from the U.S and behavioral sentiment which will have already been stirred.

Friday, 14th of June, Bank of Japan – the BoJ is expected to keep its Policy Rate at 0.10%. The BoJ will certainly have been paying attention to the USD/JPY this week, this before they make their public announcements. The Bank of Japan like the Fed is in a difficult spot. The BoJ is trying to fuel a stronger Japanese economy with a weaker Japanese Yen, while trying to sound vigilant in order to stop speculative buyers of the USD/JPY who are trying to take advantage of the trend higher. The threat of intervention should be a concern for day traders, even though the BoJ likely doesn’t want to take this avenue because it is costly and they know the only real way to make the Japanese Yen stronger is by increasing the BoJ Policy Rate which they seemingly do not want to do for the moment.

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AMT Top Ten Miscellaneous Politicos for the 7th of June 2024

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Politicos for the 7th of June 2024

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10. Three P’s: Pragmatic and populist politicians are clashing in a world that seeks to try and sell utopian visions from all sides, instead of admitting realities that should be understood and defined, thus creating a more dangerous world. It would be funny if it weren’t so serious.

9. Investment: Pasqal, a quantum tech company located in France founded in 2019, and IBM have announced a collaboration to integrate efforts on creating quantum centric supercomputing architecture. The quest for fully functioning applications appears to be years away as theories such as neutral atoms are studied and applied, and cooling systems are pressed to their limits. However, a transition into working research continues to build momentum. Accelerated investment paths for those seeking the quantum golden goose are flourishing.

8. Three C’s: Cocoa, Coffee and Copper are creating speculative storms for traders as volatility has seen apex values, then dramatic drops, followed by violent reversals higher in the commodities. Cocoa is back above 10,100 USD per metric ton as of this writing, and Coffee Arabica and Copper have been delivering huge profits and staggering losses for large players and day traders who continue to wager.

7. India: Narendra Modi has retained power after a hard fought voting outcome has diminished some of his power. However, fears that turned the Nifty 50 index sharply lower earlier this week, also created a market discount for long-term investors. Foreign investors continue to have a positive economic outlook for the nation. It will not be a surprise to see the Nifty 50 back to pre-election levels and challenging record highs soon, yet again delivering a lesson for day traders who are speculating on the short-term instead of being patient.

6. South Africa: Coalition government discussions are ongoing and will grow in noise in the coming days as a deadline to conclude an agreement approaches. The ANC is said to be talking seriously with the Democratic Alliance, but the Congress of South African Trade Unions which is strongly aligned with the ANC is against the move. It has recently been reported that South Africa’s ports are among the least dependable in the world by the Container Port Performance Index. Poor infrastructure, corruption and a lack of transparency are hurting South Africa. The ANC decision in the coming week regarding a coalition is vitally important. Either it will decide to make concessions and bring the DA in as a working government partner and hopefully build a bridge towards a better South Africa, or the ANC will decide on a hard-left coalition which could potentially bring it to a Venezuela or Zimbabwe type of outcome. The USD/ZAR will react.

5. Conservatives: The U.K election is less than one month a way, and Labour appears set to take power and control Parliament with a large majority. The failure of the Tories to create the perception of successful economic, foreign, and social polices that resonated with the public, appears to be easing the way for a ruling Labour government which has not been seen since since 2010.

4. Carry Trade: The EUR/USD will become an interesting test ground for carry trade fundamentals in the coming weeks and months. The ECB cut its Main Refinancing Rate as anticipated yesterday by 0.25%, but said it is neutral about more cuts. The ECB explained it was able to cut interest rates yesterday, because current inflation levels have dropped enough that a modification of interest rates was needed, but that it remains cautious about inflation in the future. This statement and policy could potentially allow for the Federal Reserve to become the more dovish central bank over the mid-term and lead to a stronger EUR/USD. How much will financial institutions wager on this notion in the near-term?

3. USD/JPY: Serenity now should be the new mantra for the BoJ. The Bank of Japan seems to be waiting on the Fed to sound more dovish, which could stop the need for the BoJ to intervene again. The USD/JPY remains high and is currently testing the 155.000 to 156.000 range in a fairly steady manner. The Bank of Japan will release its Monetary Policy Statement on the 14th of June. While Forex tranquility has been demonstrated the past couple of days, conditions may change rapidly later today and day traders should brace for price velocity.

2. U.S Indices: Equity values have recovered in the Nasdaq and S&P indices, and while the Dow 30 is below apex highs it is still within sight of the 40,000 level touched on the 20th of May. Treasury yields have traded slightly lower this week which has ignited risk appetite again. Gold is trading below the 2,400.00 USD ratio, but still comfortably above 2,300.00 for the moment. If Treasury yields continue to experience a downturn, institutional investors are likely to funnel cash into the stock market.

1. Data: U.S jobs numbers via the Non-Farm Employment Change and Average Hourly Earnings figures will be published today. The result will certainly set the path for the Federal Reserve’s June 12th FOMC meeting. Yesterday’s weekly Unemployment Claims came in weaker (more claims filed) than expected and other jobs data was weaker the past few days via JOLTS and the ADP statistics. All financial assets will react to the U.S data today. Weaker jobs numbers would create more confidence among institutional investors that the Fed will have to sound dovish rhetoric regarding potential cuts to the Federal Funds Rate in the coming months. Fast trading conditions are coming today.