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USD and the Fed: Parade of Jobs Data Ready to Make Noise

by with No Comment AMT MarketsEconomic CalendarFeatured Highlights

USD and the Fed: Parade of Jobs Data Ready to Make Noise

U.S data last week created landmines for Forex speculators and the Federal Reserve. Global financial markets return to full action today following the long holiday weekend. Growth and inflation numbers from the States last week provided more unsettling results for financial institutions. While Forex has proven difficult for many traders, the major equity indexes are flirting with highs but also running into some intermittent headwinds.

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US Dollar Index Six Month Chart as of 2nd April 204

In December of 2023 the Fed was interpreted as having confirmed it would be able to cut the Federal Funds Rate during the 2024 calendar year rather consistently. Dovish policy had been anticipated by financial institutions which began to sell the USD aggressively in November. But by the end of the Christmas week the USD had essentially hit lows in many major currency pairs, and as January started reversals intensified.

The last three months of trading has produced choppy conditions in Forex, but one thing is clear – financial institutions no longer believe the Federal Reserve will be able to aggressively cut the Federal Funds Rate. The Fed has now begun to show signs that it is nervous regarding U.S economic data, this as growth via GDP numbers has remained firm, inflation sticky, and consumers resilient. Clouds shadow Forex and day traders have been hampered by a lack of solid trends.

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Gold Six Month Chart as of 2nd April 2024

Gold is trading near record price levels. The fact that the precious metal is touching all-time values as the USD has been strong has flustered some speculators. But traders need to remember Gold is affected by large players, including nations, that may be hedging USD bets and preparing for political instability. The price of Gold may underscore belief the U.S Fed will have to cut rates at least a couple of times this year no matter the economic facts on the ground, because this is an election year and if the central bank doesn’t deliver on its ‘promise’ jobs at the Fed may be at stake.

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WTI Crude Oil One Month Chart as of 2nd April 2024

Not making anything easier for Federal Reserve policy is the higher price of WTI Crude Oil which has reached the 84.00 USD per barrel price. If energy costs go higher this will not help the fight against inflation. OPEC will be conducting a meeting this week. As an aside the price of Cocoa per metric ton is now over 10,000.00 USD, which is more expensive than Copper. While the price of Cocoa is not a game changer for global financial markets, the higher price will make chocolate more expensive, which some traders may find disagreeable as they try to relax and watch their speculative wagers while trying to nibble on their favorite snack.

Monday, 1st of April, U.S ISM Manufacturing – both the Purchasing Managers Index reading and the Price numbers came in higher than expected. The stronger results show the U.S economy remains better than anticipated by the Federal Reserve, which has been counting on its higher interest rate to slow down growth and inflation.

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EUR/USD Six Month Chart as of 2nd April 2024

Tuesday, 2nd of April, European Manufacturing PMI – the European Union and Great Britain will release their business readings today. The results will demonstrate insights regarding sentiment. Financial institutions are worried the European Central Bank and Bank of England may have to consider lowering their interest rates before the Federal Reserve. The EUR/USD and GBP/USD will react to the results.

Tuesday, 2nd of April, U.S Federal Reserve FOMC Members – there will be appearances throughout the day in the U.S from various Federal Reserve members who will make the case for their monetary policy outlooks. It should be noted that Jerome Powell will be speaking on Wednesday. The JOLTS Job Openings will come out before the FOMC members speak. While the JOLTS report will not cause earth shattering reactions, the jobs data is the beginning of the parade regarding employment statistics for this week.

Wednesday, 3rd of April, U.S ISM Services PMI – taking into account the Manufacturing report came in stronger than expected on Monday, the Services data will be watched by financial institutions. If this report is better than anticipated, USD sellers will not rest easy. The ADP Non-Farm Employment Change data will also be released on this day.

Thursday, 4th of April, U.S Weekly Unemployment Claims – the Federal Reserve has been counting on employment strength to erode based on their notion that higher interest rates would create ‘lagging’ reactions in the jobs sector. Jerome Powell has said the Fed is anticipating weaker employment data. The results from the weekly report will not be as significant Friday’s data, but should be given attention by day traders in Forex.

Friday, 5th of April, U.S Non-Farm Employment Change and Average Hourly Earnings – the climax for speculators this week will be these jobs numbers from the States. If the numbers produce less hiring than expected this would help USD bearish momentum. Wages will also prove crucial regarding behavioral sentiment for financial institutions. Simply put, the Federal Reserve is anticipating that weaker employment numbers are going to be seen, if this doesn’t happen it might cause major volatility in Forex going into the weekend.

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AMT Top Ten Miscellaneous Notions for the 8th of March 2024

by with No Comment AMT MarketsArtificial IntelligenceFeatured Highlights

AMT Top Ten Miscellaneous Notions for the 8th of March 2024

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10. Social Credit Score: George Orwell in our Age of the All Knowing State via public cameras using facial and body language recognition, along with listening devices that can gather voices and other sounds would chill him to the bone.

9. French Revolution: It was ‘wrong’ to say madame and monsieur after the ‘ancien regime‘ was replaced, instead the expression ‘citizen’ (citoyen) was invoked. Not using the proper words could bring the guillotine into your future.

8. Japan: Nikkei 225 has come off the top, but remains highly valued. GDP numbers will come from the nation next Monday, and the BoJ is on the calendar the 19th of March.

7. Tech Espionage: Linwei Ding, a Chinese national, who worked for Google as a software engineer has been accused of stealing information regarding supercomputing and artificial intelligence. The U.S government has filed criminal charges against Ding in San Francisco, California.

6. Central Banks: Federal Reserve Chairman Powell per his testimony in Washington D.C remained cautious, saying he wants data to confirm inflation is eroding. The ECB yesterday also voiced care while trying to sound optimistic about economic conditions which remain lackluster.

5. FOMO: ‘Fear of missing out’ is being seen in many asset classes including cryptos and equities. Day traders while speculating should remain realistic and practice solid risk management.

4. U.S Indices: Apex heights persist as the S&P 500, Nasdaq 100 and Dow Jones 30 receive massive inflows of capital.

3. Gold: Record prices have been attained in the precious metal as speculative elements have pushed value above 2160.00 USD as of this writing.

2. Forex: The USD has seen weakness re-emerge the past handful of days as the ‘masses’ have seemingly energized again upon the notion of a change to the Federal Funds Rate.

1. U.S Data: Non-Farm Employment Change and Hourly Average Earnings statistics will be published today, either helping confirm or confront financial institutions behavioral sentiment. Weaker hiring and a diminishing of wage inflation is anticipated. Will it happen? Forex, U.S Treasury yields and equities will react.

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Forex: Powell, ECB and U.S Jobs Numbers as Gold and Oil Run

by with No Comment Behavioral SentimentCommoditiesFeatured Highlights

Forex: Powell, ECB and U.S Jobs Numbers as Gold and Oil Run

Day traders and investors received a dose of optimistic ‘news’ last week as U.S economic data came in weaker than expected. While Forex certainly proved choppy as anticipated, the USD has shown signs of stability and perhaps has created a durable resistance level up above regarding its potential value looking into the mid-term.

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Gold Six Month Chart as of 5th March 2024

A potential telltale sign regarding the USD in Forex is the current price of Gold which is testing highs and as of this writing is near 2115.00 USD. While below the speculative heights of early December, the precious metal is above prices seen in late December when the USD was being sold heavily. The value of Gold is a rather solid barometer regarding outlook for behavioral sentiment in Forex. A weaker USD translates into a higher Gold price in many cases.

U.S Treasury yields have also decreased slightly over the past handful of days. And while U.S equity indices are within sight of record values, traders should monitor developing news regarding U.S regional banks and concerns about New York Community Bancorp (NYBC). For the moment it appears investors have not turned too nervous when considering the bigger picture of stock markets. Perhaps last year’s regional bank crisis has made investors in equity indices feel immune to fears of contagion stemming from bad commercial real estate lending. Or perhaps many folks are marching along merrily and refuse to pay attention for fear of missing out when their associates continue to parade into the indices.

The cryptocurrency market has come out of its deep freeze and sunshine is pervading the mindsets of speculative gamblers in crypto assets. U.S run ETFs are raising a lot of money. Folks have driven the market sky high again in the digital asset Bitcoin and its fellow travelers like Ethereum, Binance Coin, and there have been signs of pure casino like wagering in Dogecoin and Shibu Inu. Be carefu if you are considering dipping your toes into this ‘market’. Volatility and changes of sentiment can happen in the flick of an eye.

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USD/JPY Six Month Chart as of 5th March 2024

Monday, 4th of March, Japan Capital Spending – a huge jump of 16.4% was reported yesterday. This points to better economic sentiment. The Bank of Japan has been getting a lot of attention the past handful of months because some financial institutions expect the BoJ’s monetary policy to begin changing. The USD/JPY remains near important resistance levels, but below the highs of last October and November 2023 values. Mid-term speculators may be leaning towards bearish sentiment in the currency pair, but a trend lower has not been established yet.

Tuesday, 5th of March, U.S Service PMI via ISM – last week’s growth and inflation data from the U.S was less than expected. While the U.S economy has shown rather stubborn growth, the American economy may be showing signs of slowing. Today’s reading is expected to come in below the previous month’s outcome.

Wednesday, 6th of March, U.S Federal Reserve Chairman Powell – the Fed chief will testify before the Senate via the Semi-Annual Monetary Report over a two day span. Because it is an election year a rather aggressive amount of questions will be asked. However, Powell is a skilled speaker and it unlikely he will be rattled by political rhetoric. Of interest will be any comments regarding inflation, this as the Fed Chairman is asked for insights regarding the Federal Funds Rate outlook. While this testimony in Washington D.C is usually a polite get together, the notion that some politicians may try to score points will make this a potentially important calendar event for investors to pay attention regarding financial market gyrations. Powell is expected to remain cautious regarding his answers.

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WTI Crude Oil One Year Chart as of 5th March 2024

Wednesday, 6th of March, U.S Crude Oil Inventories – last week’s U.S supply report posted increased results, yet the price of WTI Crude Oil jumped the end of last week. The value of the commodity remains within the lower part of its one year range and should be watched. Recent speculative action has shown some buying momentum. The price of energy is a big component within global inflation and should be watched as the 80.00 USD Crude Oil level is challenged.

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EUR/USD Six Month Chart as of 5th March 2024

Thursday, 7th of March, European Central Bank Main Refinancing Rate – once again the ECB is expected to not act. The question is if financial institutions may try to send the European Central Bank a message because of its ‘inaction’ as inflation remains stubborn in Europe and growth hard to achieve. The EUR/USD has returned to value above the 1.08000 mark again, but visions of a stronger EUR have been hard to attain. The combination of the ECB Monetary Policy Statement and Press Conference, as Fed Chairman Jerome Powell is addressing politicians in Washington D.C could make for an interesting day of volatility in Forex.

Thursday, 7th of March, U.S State of the Union – President Joe Biden will deliver his address to Congress.

Friday, 8th of March, U.S Non-Farm Employment Change and Average Hourly Earnings – weaker jobs numbers and diminishing wage escalation are expected. U.S economic data last week came in below estimates. This report will be a solid barometer for financial institutions. While the work force numbers in the U.S are said to be tight – meaning there is full employment – layoffs have certainly been taking place in some sectors. Also worth paying attention to in the ‘back pages’ of the report, will be the amount of average hours worked by employees which have seen a statistical decline emerge.

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USD: Hidden Jobs Data Shows Potentially Intriguing Weakness

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

USD: Hidden Jobs Data Shows Potentially Intriguing Weakness

Forex traders like many market participants react to the ‘noise’ of U.S headline data results. The recent U.S jobs numbers published last Friday is certainly an example. The USD surged in strength on the backbone of more hiring via the Non-Farm Employment Change numbers. Also the Average Hourly Earnings beat expectations showing the cost of labor had become more expensive.

The U.S Federal Reserve stood in place last Wednesday before the jobs report. Pointing towards some troubling inflation, and mentioning the labor market was tight, the Fed refused to give a timetable regarding potential Federal Funds Rate cuts. The U.S central bank is showing more patience about coming interest rate cuts than many hoped on and had wagered.

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Gold One Year Chart as of 7th February 2024

Yet, there continues to be signs of anticipation for a weaker USD in the mid-term. The price of Gold remains within its higher elements, and U.S Treasury yields remain lower (although it must be said the past two weeks have seen an incremental move higher). And as a sign of potential inflation erosion, energy prices continue to be polite, which means the costs of logistics may continue to ease (except to say concerns about Suez Canal availability and chaos in the Red Sea are certainly risks).

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WTI Crude Oil One Year Chart as of 7th February 2024

The fact that gold remains solid in value, and energy prices remain relatively low, and that support levels in Forex via the USD continue to drift near realms seen on the 13th and 14th of December is an intriguing behavioral sentiment clue. Perhaps it is a sign large institutional players believe they know something others are not considering regarding the future direction of the USD fundamentally.

There are always risks for day traders. Having solid information which is correct and can affect values in Forex, commodities and even equities is important for speculators, but is also hard to find when there are limited resources regarding market intelligence.

U.S Jobs Numbers Headline may be Misleading

Importantly, while last week’s jobs numbers on the ‘surface’ scared many large players who believed the USD will get weaker, thus causing the significant reactions via reversals in many major currency pairs teamed against the USD; there is some evidence from the U.S jobs statistics that needs consideration which was not widely reported. It is important to read beyond the headlines.

The amount of hours worked in the U.S on a weekly basis has eroded. Added to this consideration is that the stronger hiring numbers may still have been affected from seasonal needs due to the holiday season. This sets the table for the next U.S jobs numbers as a significant report on the 8th of March, and one that will have a big impetus on Federal Reserve’s monetary policy outlook and USD.

The U.S Bureau of Labor Statistics Employment Situation News Release on the 2nd of February (https://www.bls.gov/news.release/archives/empsit_02022024.htm) reported the following:

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Perhaps it is conjecture to speculate the average workweek for employees decreasing is a telltale sign of weakening employment numbers to come, but it might prove to be a useful insight. Layoffs via U.S corporations continue to make news as companies seem to be bracing for a downturn in U.S economic health in the coming months. If the layoff theme remains noisy it will create the need for action from the Federal Reserve regarding monetary policy.

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EUR/USD One Year Chart as of 7th February 2024

What does it mean for day traders? There are absolutely no guarantees, but the major currency pairs ability to stay within their mid-December prices is a likely sign that financial institutions have analysts which are looking beyond the headline numbers from the recent U.S jobs report, and have also seen the hourly workweek data. In other words support levels in many of the major currency pairs could prove durable. There is no doubt reversals and outliers will be demonstrated, and choppy Forex conditions will happen, but perhaps the current lows in many major currency pairs will start to exhibit resilience.

Trying to time short-term moves via behavioral sentiment that is generated by statistics found ‘hidden’ away in the jobs numbers is speculative. But if traders want to consider the potential of technical support, it might be worth a consideration to think the U.S employment picture isn’t as strong as the headline ‘noise’ is projecting.

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Friday’s Forex Violence and Coming Attractions for Traders

by with No Comment AMT MarketsAssetsFeatured Highlights

Friday's Forex Violence and Coming Attractions for Traders

While the past month has continued to produce positive trends upwards for traders speculating on equities via U.S indices with record breaking values, Forex has been rather brutal for many day traders if they have remained stubborn.

Short-term trading conditions in Forex again proved violent this past Friday, as the Non-Farm Employment Change and Average Hourly Earnings reports came in stronger than anticipated and set off fireworks in the major currency pairs.

Fed Chairman Jerome Powell offered a clue to speculators paying attention last Wednesday, during the Fed’s Press Conference in which he spoke about the tight labor market. It seems likely the Federal Reserve knew the jobs data was going to be rather robust and hinted.

The Federal Reserve did continue to speak about interest rate cuts, but they certainly have not given an exact timetable when more dovish policy will begin. This has left many speculators, corporations and financial institutions nervous and the results via choppy trading conditions the past handful of weeks are proof.

USD strength the past month has caused headaches for many Forex speculators, but it needs to be said that many major currency pairs are lingering near values post-December 13th 2023, this was when the Federal Reserve made it ‘official’ that a more dovish monetary policy would develop in 2024.

Early wagers by financial institutions in December indicated they believed a March Federal Funds Rate cut would be seen, but after last Wednesday’s Fed’s FOMC Statement and Friday’s jobs numbers it seems more likely for the moment a May interest rate cut could be a legitimate target.

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WTI Crude Oil Three Month Chart as of 5th February 2024

Risks do Abound and Speculators Should Remain Cautious Near-Term

Inflation concerns via knock-on affects from logistical complications via Red Sea chaos which disrupts the Suez Canal shipping is a legitimate threat and needs to be monitored. However, the price of WTI Crude Oil traded in a remarkably stable manner last week as noise was heard from the Middle East. In early price action this morning the commodity has been polite and remains within sight of 72.00 USD per barrel. The lack of a nervous reaction in Crude Oil thus far could keep global investors calm.

This week will be limited regarding important economic data. However, there will be plenty of rhetoric offered by U.S Federal Reserve members in the coming days via conferences and interviews. Forex traders have needed to combat an array of reversals as price equilibrium has created rather tenacious price realms and this may continue near-term.

There are time periods when traders should be willing to accept that methods regarding short-term trading tactics need to be adjusted. January has shown that financial institutions were of the mindset the USD had gotten too strong. And although it appears financial institutions continue to lean towards a weaker USD outlook in the mid-term (as proven by lower moves in the USD leading up to the jobs report on Friday), the surprisingly good jobs data certainly caused the USD to bounce upwards.

Technical considerations of the USD at this moment are important, fundamental data is still coming in rather mixed, this as financial houses wait on central banks to start reacting with interest rate cuts due to lackluster economic data. It is important to note that some analysts have started to murmur the ECB and BoE may have to move first regarding interest rate cuts – if they have the courage to take this action sooner rather than later. The U.S economy has remained rather strong regarding consumer sentiment and this is causing angst among Fed observers. The U.S jobs numbers on Friday highlighted this nervousness.

Monday, 5th of February, U.S Services PMI via ISM – an outcome of 52.0 is the expected reading, which would be higher than the previous result of 50.6. If the Services number meets its estimate and doesn’t exceed the expectation, this would calm nervous financial institutions which may believe the U.S economy may be too strong for the Federal Reserve’s liking, and cause some hawkisk sentiment regarding monetary policy to linger. A weaker number from the Services PMI could help the USD selloff slightly, a stronger outcome could result in more USD buying short-term.

Tuesday, 6th of February, Australia Cash Rate and Monetary Policy Statement via RBA – no major changes are expected from the Reserve Bank of Australia. Global central banks have taken a wait and see approach as they likely remain nervous regarding the potential of inflation to remain stubborn in the mid-term. The RBA is probably going to follow the ECB, BoE and Fed’s stances from last week and remain conservative.

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EUR/USD Six Month Chart as of 5th February 2024

Wednesday, 7th of February, Germany Industrial Production – though this report is not viewed as a major economic event for traders the results should be watched. The EUR/USD has been hit by rather volatile conditions as financial institutions try to anticipate central bank moves. If the German data comes in weaker than expected (a minus -0.4% result is anticipated) this could make the EUR/USD slightly more bearish.

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Shanghai Composite Index One Year Chart as of 5th February 2024

Thursday, 8th of February, China CPI and PPI – economic data from China has not improved and foreign investors are not showing an appetite for risk. Deflation remains a concern in China, and although the official government rhetoric promised sunnier days ahead, fundamentals in real estate, manufacturing and consumer driven data offers troubled prospects. The Consumer Price Index from China is anticipated to be worse than the previous month’s outcome. The downturn in the SSE (Shanghai Composite Index) is now challenging the 2,700.00 vicinity.

Friday, 9th of February, Canada Employment Change – Canadian economic data has been lackluster and analysts have been quite critical of government policy. Having said this the USD/CAD is largely going to stay in a USD centric mode going into the weekend.

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AMT Top Ten Miscellaneous Raindrops for the 2nd of February

by with No Comment AMT MarketsAssetsFeatured Highlights

AMT Top Ten Miscellaneous Raindrops for the 2nd of February

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10. Risk Appetite: WTI Crude Oil almost serene around 74.00 USD, as bombastic rhetoric remains loud involving the Middle East.

9. South Africa: President Cyril Ramaphosa expected to announce the country’s election date when delivering the State of the Nation Address on 8th of February.

8. Tesla: Negative media coverage and an always defiant Elon Musk gravitate towards each other, share price is around 188.88 USD.

7. China: Shanghai Composite Index (SSE) hovering near 2,730 as of this moment.

6. Gold: After near-term lows a challenge of highs as USD has gotten slightly weaker.

5. Central Banks: All bark and no bite yet, as financial institutions desire interest rate cuts from Federal Reserve, European Central Bank and Bank of England.

4. India: Nifty 50 Index near 21,865 as of this writing, it has gained more than 101% over the last five years – yes, plus one-hundred and one percent.

3. Forex Reactions: Recent short-term volatility and reversals seen as expected, patience still needed as USD mid-term outlook remains weaker.

2. U.S Equities: S&P 500, Nasdaq 100 and Dow Jones 30 have produced nervous results but still near record highs, as U.S Treasury yields have edged lower this week.

1. Data: U.S Non Farm Employment Change and Average Hourly Earnings today, this as some major corporations shed employees but labor market remains rather tight. Broad markets will react to the outcomes.

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Trading Optimism for 2024 and Pursuit of Castles in the Air

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

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.

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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.

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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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Dynamic Forex Conditions Expected via Inflation Data and Fed

by with No Comment Behavioral SentimentEconomic CalendarFeatured Highlights

Dynamic Forex Conditions Expected via Inflation Data and Fed

Day traders may have experienced difficult results the past few days as Forex produced choppy conditions. The USD proved rather strong on occassion and likely whipsawed technical speculators, particularly if they were looking for sustained trends to emerge with bearish perspectives regarding the USD. The EUR, GBP and JPY have demonstrated rather turbulent values. More challenging days are likely ahead for speculators, this as inflation reports from the U.S and the Federal Reserve are on the horizon.

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EUR/USD Five Day Chart as of 11th December 2023

Curious economic data was published at the end of last week, this as the broad markets turned in a rather convulsive five days of results via financial assets. U.S jobs numbers came in slightly higher than expected for the Non-Farm Employment Change figures and the Average Hourly Earnings. Following the employment data, the Preliminary University of Michigan’s Consumer Sentiment reading came in much stronger than anticipated, and its inflation data found that people are less fearful of inflation looking forward in the States.

On Saturday, China released its CPI and PPI statistics and they continued to show a downwards path. China has taken on a rather sticky deflationary track and this signals that consumers and producers in the nation remain burdened by harsh economic considerations.

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Gold One Month Chart as of 11th December 2023

U.S equity indices were rather jerky, but finished last week’s trading higher than they started. U.S Treasury yields finished the week higher, except for the 30 Year Bond which came in with a result slightly below its starting point for the five day period. Gold has seen its price come down from highs and this may be interpreted as a reaction to the stronger USD. The precious metal may be in for volatile days ahead.

The risk appetite flame has apparently been turned lower, but is still simmering and this is due to financial instiutions waiting to see if the U.S Federal Reserve delivers a neutral monetary policy rhetoric this coming Wednesday. The USD which had been getting weaker across the board for a handful of weeks, suddenly seemed to hit ‘support’ and reversed higher as questions regarding ‘fair market value’ may have been considered. Larger players in Forex are likely waiting for their outlooks to be confirmed via the Federal Reserve or dampened considerably. The higher Average Hourly Earnings data on last Friday was a reminder inflation data continues to be stubborn, even if many analysts believe the Fed’s higher interest rates will begin to have an impact in 2024 and slow the U.S economy.

Monday, 11th of December, U.S Ten Year Bond Auction – the results of the auction will be studied by financial institutions, particularly as investors debate the necessity for interest rates to be kept high, against those who are arguing for the need to cut the Federal Funds rate by late spring 2024.

Tuesday, 12th of December, U.S Core Consumer Price Index – the inflation numbers will be critical for behavioral sentiment and certainly affect the attitude of financial houses and their trading positions before the Fed steps into the limelight on Wednesday. The Core CPI numbers are expected to be slightly higher compared to last month’s outcome. Perhaps last Friday’s higher U.S earnings data will pave the way for a calm reaction if the CPI is strong. Forex markets will respond to this report and day traders should be braced for price ranges and spreads to get wider.

Wednesday, 13th of December, U.S Producer Price Index – the PPI numbers will be released early in the States, five and a half hours before the Fed’s Federal Funds Rate publication. Traders need to be ready for volatility before the Producer Price Index figures are reported. The inflation numbers are expected to be higher than the previous month’s outcome.

Wednesday, 13th of December, U.S Federal Reserve – the last interaction of the year for the U.S central bank and financial institutions will be an important affair. The Fed’s Federal Fund Rate, FOMC Statement and Press Conference will get full attention. The Fed is expected to hold interest rates in place, the question is what ‘vocabulary’ the central bank will use as it lays the groundwork for its 2024 outlook. While talk of a more neutral Fed, one that isn’t as aggressive has been envisioned, financial institutions want to see a ‘softer’ tone become the reality.

Depending on how the U.S Federal Reserve talks about inflation and its monetary policy insights for the next few months to come via this FOMC Statement, the USD will take center-stage and Forex conditions may become rather violent as Wednesday concludes. Day traders are advised to be very careful if they plan on trying to surf the waves caused by the Fed’s storms which will certainly be stirred.

Thursday, 14th of December, E.U European Central Bank – the ECB will release its Main Refinancing Rate, Monetary Policy Statement and conduct its Press Conference. The last ECB event proved to be rather mundane. While some talking heads may try to make this coming event into must see television, many financial institutions likely expect the European Central Bank to say, “the E.U economies remain lackluster, there are glimmers of growth in some spheres, but recessionary problems are still evident”, this while also mentioning inflation is observed to still be too strong, but showing signs of erosion. In other words, the EUR/USD is likely to remain USD centric according to existing behavioral sentiment that has been triggered earlier.

Friday, 15th of December, China, Industrial Production – the report is anticipated to show a better outcome than last month’s figure. China skeptics will examine these reports carfully, as well investors with ‘skin in the game’ in the nation.

Friday, 15th of December, E.U, U.K and U.S Manufacturing and Services PMI – these reports will be watched from the European Union nations, the United Kingdom and U.S, but the results will be filtered into existing sentiment which has been generated on Wednesday and Thursday from the Fed and ECB. Behavioral sentiment in Forex will likely look at the PMI results with vague interest levels. Traders should note that as the weekend approaches, there will be only one full week of trading left before the holiday season gets underway and financial markets begin to experience thin volumes.

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AMT Top Ten Miscellaneous Thoughts for the 8th of December

by with No Comment Behavioral SentimentBooksFeatured Highlights

AMT Top Ten Miscellaneous Thoughts for the 8th of December

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10. Book: A History of Venice by John Julius Norwich.

9. Music: Gram Parsons (featuring Emmylou Harris) playing Ooh Las Vegas.

8. Artificial Intelligence: Speed and processing advances will continue to make AI a buzzword in 2024, this as quantum computing looms in the distance.

7. Trading Volumes: Speculators should note there are about two full weeks of trading left before ‘thin’ holiday markets will begin to be seen. Meaning financial institutions while being cautious, will also start to position their assets according to their outlooks for early next year.

6. Energy Sector: WTI Crude Oil, Brent, Natural Gas and Unleaded Gasoline continue to challenge support levels as long-term lows remain in sight.

5. China: Important inflation numbers via Consumer Price Index statistics will come from the nation early Saturday, negative results are expected.

4. Risk Appetite: Optimism continues to be encouraging within behavioral sentiment, this as U.S equities remain near highs, the USD leans towards a mid-term outlook with potential weakness, and gold stays above 2000.00 USD per ounce.

3. USD/JPY: Bearish momentum continues in the currency pair, price velocity built speed yesterday and this morning’s trading has been dynamic.

2. Data: U.S jobs numbers will be released today, the Non-Farm Employment Change and Average Hourly Earnings reports will create reactions. However, unless the results are surprising, this data may simply work as an affirmation for existing risk appetite.

1. Federal Reserve: The Fed’s next FOMC Statement will be on the 13th of December, this knowledge will shadow the broad markets today and early next week.

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December Cheer, Full Volume, Considerations for Coming Week

by with No Comment AMT MarketsAssetsFeatured Highlights

December Cheer, Full Volume, Considerations for Coming Week

The EUR/USD finished the past week of trading below its starting point essentially closing this Friday around the 1.08790 mark. While the slight downturn may have hurt bullish day traders who kept on looking for higher ground in the short-term, the EUR/USD did trade above the 1.10000 on late Tuesday and held its ground briefly on Wednesday before starting to trend lower. A depth of nearly 1.08310 was momentarily challenged on Friday with solid price velocity, but the EUR/USD did exhibit some buying before going into the weekend.

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EUR/USD Five Day Chart as of 3rd December 2023

Speculators who were looking for a higher finish for the week from the EUR/USD may have been disappointed, but the end of the trend upwards may not be finished. U.S Fed Chairman Jerome Powell sounded optimistic on Friday regarding Fed policy and mentioned a ‘soft landing’ and indicated interest rates at their current level will still need a bit of time to have their full effect. U.S growth numbers via the Gross Domestic Product came in stronger than expected on the 29th of November, but inflation data continues to show a slight erosion.

This puts the U.S Federal Reserve in position to actually sound rather neutral when the FOMC Meetings conclude in a week and a half. And if global events do not cause any sudden alarms to ring, it appears risk appetite is within a rather optimistic state. U.S equity indices continued to roll along merrily and the 3 big indexes are challenging highs. The S&P 500 and Nasdaq Composite are challenging July values, and the Dow Jones 30 is trading at ratios last seen in January of 2022.

While U.S Treasury yields have also continued to erode and are near mid-term lows, the USD/JPY continued to create a bearish trend for the week and is trading at values last seen in the second week of September. The GBP/USD finished the week within sight of highs attained on Tuesday and Wednesday, this as the currency pair also trades near values last seen in late August and early September. The EUR/USD is the outlier among the three major currency pairs and speculators may look at the EUR as potentially being in oversold territory as the week gets set to begin. Risk management as always is essential for wagering on Forex.

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S&P 500 One Year Chart as of 3rd December 2023

The next two and a half weeks of trading will see full volumes, this before holiday trading starts to hit the broad marketplace. The upward moves in U.S equity indices may be seen as overdone by many analysts, but the trend has been strong and trying to step in front of the ‘optimism’ within the indexes may prove expensive in the coming days and weeks. Day traders should make sure conservative leverage is being used if they are attempting to climb aboard the moving train.

Some analysts are pointing out correctly, that if it weren’t for a few ‘workhorse’ corporations in the U.S equity indices, declines would have been seen. But day traders who are wagering on CFDs via their brokers and financial institutions investing in the three major stock indices are likely enjoying their profitable returns.

Monday, the 4th of December, E.U Sentix Investor Confidence – the reading is expected to come in with a negative result, but slightly better than last month’s outcome of minus -18.6. About a hour and a half before this European survey, German Trade Balance numbers will be released. The EUR/USD may be affected by this data, but the currency pair is likely moving within the shadows of behavioral sentiment which is USD centric. Europe is struggling with recessionary conditions, but it is outlook which drives the marketplace. If the EUR/USD can find durable support it may prove that its bullish trend has not come to an end.

Tuesday, the 5th of December, U.S ISM Services Purchasing Managers Index – an improvement is expected compared to last month’s outcome. Recent data from the manufacturing sector came in less than expected, thus the services sector will be watched closely, but as long as the result is around the expectation this will not hinder broad market sentiment. Meaning the report could be a non-factor.

Wednesday, the 6th of December, Canada BoC Overnight Rate – traders will be keen to see what line of rhetoric is taken within the Rate Statement from the Bank of Canada. No change to borrowing costs are expected. The rate is anticipated to remain at 5.00%. The economy of Canada has been struggling as recessionary clouds are shadowing, but recent GDP data was slightly better than expected and inflation has shown signs of weakening. The USD/CAD went into this weekend near its lows and in sight of values seen in late September.

Thursday, the 7th of December, China Trade Balance – economic numbers via the manufacturing sector last week came in below expectations. The lackluster China data may be a factor in the weaker WTI Crude Oil prices, but perhaps that is only speculative. Some investors participating in China are worried about outlook over the mid-term. Analysts will comment on the Trade Balance numbers, but traders should make sure they separate the ‘noise’ which may be delivered from biased perspectives depending on ‘world view’ compared to actual outcomes and genuine insights.

Friday, the 8th of December, U.S Non-Farm Employment Change and Average Hourly Earnings – the jobs numbers will be looked at attentively by market participants. The data will be correlated to existing behavioral sentiment and risk appetite that has sustained a weaker USD, higher U.S equity indices, lower yields on U.S Treasuries and the high price of gold. If the jobs data comes in around expectations that will likely be enough for investors to remain calm and look forward to the 13th of December, this is when the U.S Federal Reserve will release its FOMC Statement – which may keep risk appetite strong.

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Nervous Results Next: Forex and Equities Wait for Jobs Data

by with No Comment AssetsFeatured Highlights

Nervous Results Next: Forex and Equities Wait for Jobs Data

Tomorrow’s jobs numbers from the U.S will get plenty of media coverage. Typically the Non-Farm Employment Change data is used as a selling tool by brokers to get their traders motivated and speculating on Forex and stocks via CFDs with the promise of swift price action. Many times the jobs numbers prove to have limited value, serving mostly as entertainment for back office risk managers at Forex houses as the whipsaw value changes wipe out speculators across the board. However, tomorrow may prove different.

Friday’s Non-Farm Employment Change and the Average Hourly Earnings statistics may produce dynamics worthy of their news coverage. Financial institutions are actually quite interested in tomorrow’s coming reports as the U.S Federal Reserve lingers in the shadows having spoken boldly about raising the Federal Funds Rate in November. It would take a weaker hiring result from the Non-Farm Employment Change data, and lower inflation numbers from the Average Hourly Earnings outcome to change financial institution outlooks regarding the U.S central bank.

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EUR/USD One Month Chart as of 5th Oct. 2023

The trend of the EUR, GBP and JPY clearly demonstrate the value that has been lost against the USD over the past three months. While many financial institutions and speculators believe the USD will begin to lose strength eventually, timing the moment this is going to start happening in earnest is difficult. U.S Treasuries have come off of highs in recent trading, but nervousness remains abundant and recent heights remain in sight. Tomorrow’s U.S jobs number could reignite fear and spark behavioral sentiment which is reactionary.

As a side note, while U.S indices turned in some gains on Wednesday, the moves higher were not exactly momentous which sets up the U.S stock markets to produce a sudden reversal lower if widespread nervousness is produced today and tomorrow.

Importantly, hiring is believed to be weakening in the U.S by some analysts, but there is plenty of talk about a lack of qualified workers to fill important jobs still. So while the Non-Farm Employment Change number may come in below estimates and could spark hope among financial institutions the U.S Fed will be given a reason to sit on their hands, it is the Average Hourly Earnings inflation numbers which should be watched even more closely. If the costs of paying wages is more expensive than the previous month, this would spark concerns about price pressures remaining problematic.

Analysts have also continued to speak about concerns regarding revisions being made by the U.S government to past jobs reports, which means financial institutions are wary of positioning themselves fully based on the current month’s reporting. Accurate reporting from the U.S government has become problematic, and is causing nervous and conspiracy minded chatter in some trading corners.

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WTI Crude Oil One Month Chart as of 5th Oct. 2023

Another factor which day traders may want to consider is the price of Crude Oil which has sunk below 84.00 USD per barrel in the footsteps of a one week decline. If the price of the commodity can remain muted and show a solid trend downwards this would help reduce hawkish rhetoric from the Federal Reserve.

As we go into tomorrow’s jobs numbers from the U.S, the broad markets do continue to exhibit nervousness which appears justified. The results of the Non-Farm Employment Change and Average Hourly Earnings may produce results which cause a reaction which shakes the outlooks of financial institutions and carries strong implications for day traders that matter.

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Nervous Outlooks and Short Term Fixes Creating Anxiousness

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Nervous Outlooks and Short Term Fixes Creating Anxiousness

A U.S government shutdown has been avoided, but the resolution highlights that an important year of political games is getting fully underway in Washington. Short term fixes via congressional agreements do not hide the fact the U.S government continues to bleed money and is adding to its deficit as yields on U.S Treasuries remain high.

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Gold Five Day Chart as of 2nd October 2023

The price of gold has sank substantially in the past week, which shows the USD continues to be strong, and that speculative short-term games within the precious metal must always be kept in mind by day traders. Long term fundamental beliefs regarding the value of gold cannot stop momentary volatility.

GDP results from the U.S last week came in slightly below estimates, but the ability to still sustain growth also creates the suspicion the U.S economy remains stubbornly strong, which effectively puts the U.S Federal Reserve in a rather difficult place. Crude Oil prices have remained high, and this week’s coming jobs data will be important for short and mid-term market participants as they position themselves while nervous behavioral sentiment continues to be evident.

U.S stock markets are near three month lows and trading conditions choppy, this as yields on U.S Treasuries are elevated and create a tough road for speculators to navigate in the short-term.

Monday, 2nd of October, U.S ISM Manufacturing PMI – a reading below 50 is anticipated which would mean sentiment remains negative regarding the U.S economy, but Core Durable Goods Orders came in better than expected last week. Thus, the result of this manufacturing report could play into short and near-term USD trading and cause a ripple as financial houses anticipate the jobs numbers later this week.

Tuesday, 3rd of October, Reserve Bank of Australia – the RBA is expected to keep its Cash Rate in place. If the RBA cooperates with financial institutions and does not change its key borrowing rate , the RBA Rate Statement will come into focus. However, the AUD/USD is still within the shadows of U.S Federal Reserve like most other major currencies.

Wednesday, 4th of October, U.S ISM Services PMI – the outcome from the Services report is expected to fall below last month’s outcome. The slight miss in the GDP numbers last week was noteworthy, but the better than expected Core Durable Goods results will make this report of interest and provide a bit of impetus to the USD and U.S indices before Friday’s key jobs data – particularly if the Services reading is better than anticipated.

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GBP/USD Three Month Chart as of 2nd Oct. 2023

Thursday, 5th of October, U.K Construction PMI – while not considered a major publication by many analysts, the ordering by purchasing managers in Britain may prove relevant as an indicator regarding outlook. The Bank of England held their interest rates in place a couple of weeks ago and this was based on the belief the U.K economy is slowing. The Construction PMI report is expected to come in slightly below last month’s outcome which could set the table for slight choppiness in the GBP/USD which has continued to trend lower.

Friday, 6th of October, U.S Non-Farm Employment Change and Average Hourly Earnings – the combination of these two reports will impact USD trading before their publication and afterwards for several hours. Financial institutions will examine these statistics carefully. If there is a hint of weakness in the U.S jobs market and wage inflation is tame, this could make the USD weaker. However, if jobs hiring remains firm and there is a slight uptick in the costs employers are having to pay workers, the USD could get stronger.