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Risk Events and Questioning the Hyperbole of ‘Bad Actors’

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Risk Events and Questioning the Hyperbole of 'Bad Actors'

The week in a way has already started for financial institutions and traders because of the developing news from Russia. Due to yesterday’s events surrounding the ‘noise’ caused by the Wagner Group’s leader Yevgeny Prigozhin, let there be no doubt that energy sector traders became nervous and fragile behavioral sentiment was being anticipated for Monday’s openings. However, like a well staged drama (perhaps this is giving too much credit to the actors) the Russian saga seems to have come to an odd conclusion. Leaving the possibility for a Part Two to develop. Stay tuned ladies and gentlemen.

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EUR/USD One Month Chart as of 25th June 2023

Monday, the 26th of June, Germany ifo Business Climate – the reading is forecast to come in worse than the previous month. Germany has turned in rather troubling economic data and the E.U as a whole is struggling under the weight of inflation and lackluster growth. The EUR/USD could be affected from the business climate survey.

Monday, the 26th of June, E.U ECB Forum on Central Banking – the annual event which is a bit like the Fed’s Jackson Hole Symposium will be attended by the leading central bank officials from around the globe. This year’s event in Sintra, Portugal will focus on inflation. ECB President Christine Legarde will kick off the event, which will end on Wednesday the 28th of June with speeches from Fed Chairman Jerome Powell, BoE Governor Andrew Bailey and others.

Tuesday, the 27th of June, Canada Consumer Price Index – a slew of inflation reports will be delivered. The forecast anticipates a slight drop in price pressure, but will that actually be the result? The USD/CAD could move based on the outcomes.

Tuesday, the 27th of June, U.S Consumer Confidence via the Conference Board – this survey is expected to show a slight improvement in the outlook of American consumers.

Wednesday, the 28th of June, E.U ECB Forum on Central Banking – the event will conclude with speeches from the heads of the ECB, Bank of Japan, Bank of England and Federal Reserve. The event is not supposed to stir up the dust, but Forex traders should monitor the rhetoric generated.

Thursday, the 28th of June, Germany Preliminary Consumer Price Index – the data is expected to show an increase in prices and underscore the ECB’s aggressive rhetoric regarding inflation.

Thursday, the 28th of June, U.S Final Gross Domestic Product – the growth numbers are projected to show a gain of 1.4% compared to last month’s 1.3%. The results will move the financial markets if they are surprising. Traders should be on the lookout for revisions to the previous month’s numbers.

Friday, the 29th of June, U.K Final Gross Domestic Product – an expected ‘growth’ number of 0.1% is anticipated, which would match last month’s lackluster outcome. The U.K is hovering under recessionary pressures and this GDP result will be watched by GBP/USD day traders.

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Nervous about the Markets, You’re not Alone

by with No Comment Uncategorized

Nervous about the Markets, You're not Alone

U.K political chaos turning into clarity or further madness? Mid-term elections coming in the U.S about to deliver change? More turmoil in Brazil? What could go wrong?

So you are nervous about the global markets. You are thinking about the possibility of putting cash under your mattress. Perhaps closing your equity positions and just being a spectator for the next year, well, you are not alone. It doesn’t mean you are right however, and you may want to proceed with caution before your let paranoia guide your decisions.

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Past month of results from S&P 500

Global markets have faced perils before and will again in the future. Long term perspective is needed. The U.K, U.S and Brazil are all within intriguing political circumstance. The U.K is about to have its third Prime Minister after the ‘sacking’ of Liz Truss. The U.S is about to have a mid-term election and it appears the Republicans may seize control of the House of Representatives and Senate. Meanwhile in Brazil, the race for President appears to be getting closer and President Bolsonaro may actually pull off a photo finish against his challenger.

U.S indices have suddenly started to show brief moments of strong buying again. However many financial analysts remain skeptical. Fear of inflation, recession, quarterly earnings, debt and rumblings regarding stagnation are legitimate reasons for financial institutions to worry about this Halloween season. Jokes aside, the short term will likely remain rather challenging.

The U.S Federal Reserve has served as a solid place to show officials remain locked within their offices without a vision regarding the real world, but that is too easy to merely claim. Numbers need to be looked at and quantified to cast official blame on bad monetary policy. It does appear the Fed will raise interest rates again in November. Will they rest after this coming hike and actually wait for corporate evidence and economic data afterwards to help guide their decisions late in 2022 and early in 2023? We shall see.

The USD remains very strong and is hurting other economies as nations deal with the rising costs of food and energy, particularly when imports are involved. Things are not going to get tranquil in the short term, more hurdles need to be jumped. Remaining calm as an investor and trader is needed. Being reactionary will likely not lead to good results.