AMT Top Ten Miscellaneous Fireworks for the 5th of July 2024
10. Grudge: Ireland and the Springboks begin their rugby two match competition this Saturday in Loftus Stadium, Pretoria. Anticipation is palpable in South Africa. The weather is forecast to be good and the game is expected to be better. The battle between the Green Machines is real. The second game will be played on the 13th of July in Durban.
9. Digital Jitters: Bitcoin is trading near 54,300.00 USD as of this writing. As analysis filters in to explain this particular downturn which essentially began on the 7th of June, the fact is that BTC/USD has become a playground for institutional gamblers while many in the public remain dubious. Excuses such as the U.S election potential outcome and Fed monetary policy are all likely false narratives. Speculation is your answer.
8. Correlations: The USD/ZAR is near the 18.20500 mark, and the USD/MXN is around 18.06000 as of this morning. The South African Rand and Mexican Peso are not correlated, except as currencies that are witnessing a strong amount of political sentiment generate trading behavior in financial institutions which are trying to judge their long-term outlooks. The coalition National Unity Government of South Africa, and the Morena political party of Mexico are in the spotlights and are being watched by anxious investors.
7. National Security: The race for quantum supremacy is real as nations issue significant controls over the export of computing mechanisms to unfriendly competitors as reported by the New Scientist website recently. And the smuggling of semiconductors which are ‘forbidden’ to China who are using organized underground operations in order that Nvidia AI processors can be obtained, was reported on by the Wall Street Journal two days ago.
6. Commodities: WTI Crude Oil is trading above 84.00 USD, the energy has sustained prices above $80.00 since the 17th of June and is approaching mid-term highs, the slight rise in price earlier this week may have been because of hurricane concerns, but buyers have remained strong this morning. Cocoa is still traversing around 8,456.00 USD per metric ton, as it bounces along mid-term technical support levels. In early January of this year Cocoa was trading at half its current value.
5. Jobs Numbers: One of the favorite tools used by salespeople to get day traders geared towards speculating blindly are the monthly U.S Non-Farm Employment Change numbers which will be published today. But because of the U.S Independence Day yesterday, many financial institutions are celebrating a long holiday weekend and will be mostly inactive. Data has become increasingly lackluster from the U.S the past two months with rather pessimistic GDP, PMI manufacturing and services outcomes. Traders considering a dip of their toes into the markets today should be aware that volumes are going to be low which opens the door for volatility. Who will be paying attention to the Average Hourly Earnings report?
4. Markets: U.S Treasury yields are within sight of three month lows, this as the major stock indices via the S&P 500 and Nasdaq 100 make noise at record highs. The Dow 30 is not at a high but within a healthy territory as bullish behavioral sentiment remains rather abundant. When full trading volumes return next week, there is reason to believe the summer rally may continue.
3. Bank of Japan: The USD/JPY is trading below the 161.000 level. Some analysts suspect the BoJ engaged in a limited intervention earlier this week when the currency pair approached the 162.000 vicinity. The Bank of Japan is playing a dangerous game with speculators. The next BoJ Outlook Report is not due until the 31st of July. Until then the USD/JPY apparently is going to traverse in a higher price range with the threat of a potentially engaged Bank of Japan lurking which can punish speculators if they get too comfortable betting on the bullish trend. The price of Gold should be watched as it traverses around 2,365.00 USD, which remains in sight of record highs that touched the 2,425.00 vicinity on the 20th of May. Retail purchasing of gold in Asia is strong as citizens of some nations try to hedge against inflation.
2. Fallout: The Presidency of Joe Biden remains vulnerable as media pundits who have long supported him lurch towards public criticism, and question Biden’s inability to handle unscripted situations. Talk of replacing Biden with another candidate to face Donald Trump remains fever pitched, but there are strong obstacles which will not allow an easy path to unseat the current President. Biden owns his delegates won via Primary voting. He would have to officially relinquish his delegates at the Democratic National Convention in order to allow for a new candidate. The Democratic political party also knows that Vice President Kamala Harris is not particularly well liked, but if Biden were pushed to the side it would open the door for a potentially messy challenge by Harris who would certainly want the Presidency. Getting her to bow out of the race could be another potential disaster for the Democrats, and help create a level of disdain which could trigger a huge landslide for the Republicans in November.
1. Trouncing: Political incompetence is not only a stronghold in the U.S, this as the U.K and France are proving. The GBP/USD is near 1.27685 as of this writing, the EUR/USD is around 1.08230. Both currency pairs have gained this week. The massive defeat of the Conservatives in the U.K last night, and Macron’s political weakness which may increase after the 2nd round of voting this coming Sunday in France has been digested by financial institutions. The GBP/USD and EUR/USD were punished over the past few weeks due to knowledge that the Tories in Britain would suffer a resounding humiliation, and the belief that Macron opened the door for a loss of clout. Financial institutions have proven they are keen observers of politics and are accustomed to shifts of direction via new forces. Some may also say that financial institutions are comfortable as long as they know where power resides in the ‘deep state’ bureaucracies of every nation.
