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Risks: Powell and Inflation Data will Generate Market Reactions

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Risks: Powell and Inflation Data will Generate Market Reactions

Traders returning to their desks after a long holiday weekend can see the USD has become weaker the past couple of sessions as behavioral sentiment has shown signs of shifting again. Yet the trends experienced in Forex have not been clear cut, this as questions and concerns regarding what governments and central banks are thinking remains problematic. Investors who take a long-term approach to the markets will likely have an easier time in the coming days because their comfort levels are set to different metrics compared to large traders and the retail crowd. Noise doesn’t effect investors as much as traders.

Politics clearly remain on the minds of many as President Joe Biden has his ability to effectively lead the U.S questioned with growing doubts. However, it is unlikely that there will be a change in the immediate future from the Democrats as they decide on a path regarding their nominee for the November Presidential election. Financial institutions would certainly react to a decision to eliminate Biden as a candidate, but the President remains steadfast that he will move forward. It is very conceivable that Biden may be forced to vacate against his wishes, but until then the broad markets will not react too much to worries about the White House. For the moment U.S politics remain hyperbole.

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EUR/USD Six Month Chart on the 9th of July 2024

France held its Parliamentary second round elections on Sunday, and while the votes have been counted, the results in many ways are not yet clear. Coalitions are being rumored and EUR/USD traders may react to the developments and within French bonds, but the murky political conditions within Paris remain hard to predict regarding outcome as a whirlwind of deal making takes place in an assortment of offices.

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S&P 500 One Year Chart on the 9th of July 2024

The lack of total volume last week in Forex and equity indices did not stop trends from being seen and technical perceptions being formed. U.S stocks remain highly valued and U.S Treasury yields have produced a downwards slope.

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USD/JPY Six Month Chart on the 9th of July 2024

Today will prove interesting as Jerome Powell and Janet Yellen speak in Washington D.C, later this week inflation data will certainly cause a stir. While Biden remains a concern, France tries to form a working government, and the Bank of Japan is being viewed with deep suspicion, day traders have reasons to monitor news, but they should also remember financial institutions have been positioning for potential sentiment shifts and may not react with volatility if their outlooks are confirmed.

This week of trading is laden with risk events, some of which are listed below, but speculators need to understand behavioral sentiment is showing signs of optimism within many financial assets, and the prevailing mood of financial institutions appears to be leaning towards risk appetite.

Monday, 8th of July, Japan Average Cash Earnings – real wages continued to fall via data reported yesterday. The USD/JPY is traversing dangerous heights and speculators are likely still testing their bullish perspectives even as the 161.000 sees values tested above. Traders should stay cautious and not bet wildly on more upside, but lower valued speculative viewpoints are also problematic for the time being. Simply put, beware of the BoJ as it looms in the shadows.

Tuesday, 9th of July, U.S Federal Reserve Chairman Powell – the central bank chief will testify before the Senate. U.S economic data has weakened via Gross Domestic Product, and Manufacturing and Services readings. However, inflation remains troublesome and Powell will have to speak about these issues in conjunction via his Monetary Policy Report. He will certainly try to sound cautious. If Powell hints at a potential rate cut in September this would spark USD selling. At the same time the Fed Chairman is talking, Treasury Secretary Yellen will be speaking to the House Financial Services Committee. Traders can be assured that Powell and Yellen will mirror each other. And Powell will speak to the House on Wednesday.

Wednesday, 10th of July, China CPI and PPI – the Consumer Price Index is expected to have a gain of 0.4%, while the Producer Price Index is anticipating a result of minus -0.8%. Deflation in China is a concern. Economic statistics continue to produce lackluster results, while this a partially due to the collapse of the real estate bubble in China, it also has to do with less demand for products from abroad as Europe and America suffer from economic declines too. The USD/CNY has produced a bullish trend since the start of 2024 and is traversing near 7.2714 as of this writing. Traders should look at the inflation reports and examine them for revisions downward in previous months.

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GBP/USD Six Month Chart on the 9th of July 2024

Thursday, 11th of July, U.K Gross Domestic Product – the newly elected Labour government will get their first taste of big economic data challenges as they now guide Britain. A lackluster gain of 0.2% is expected. While this may move the GBP/USD a bit based on the result, the currency pair will likely react more to the U.S inflation data later in the day. The July bounce higher in the GBP/USD has been healthy and value above the 1.28000 has provided bullish traders with some optimism.

Thursday, 11th of July, U.S Consumer Price Index – the core CPI report is projected to match last month’s number of 0.2%. If this result can be attained and the CPI annual data comes in with the anticipated 3.1% mark compared to last month’s figure of 3.3%, this could create dynamic bearish activity for the USD. However, traders should remain cautious and note that even though recent U.S economic data has tumbled, inflation reports have been stubborn. Betting on the outcome of these reports before they are published is akin to gambling for day traders.

Friday, 12th of July, U.S PPI and Preliminary University of Michigan Consumer Sentiment – the Producer Price Index reports are expecting slightly higher ratios. The Consumer Sentiment report should be looked at too, because the readings have been coming in weaker the past handful of months. If consumer behavioral sentiment is weaker the USD could sustain a negative stance.

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AMT Top Ten Miscellaneous Punches for the 28th of June 2024

by with No Comment CommoditiesCorporateCryptocurrencies

AMT Top Ten Miscellaneous Punches for the 28th of June 2024

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10. Cricket: The ICC T20 World Cup Championship will feature South Africa vs. India. The two teams are familiar with each other competitively and the final match will be held at the Kensington Oval in Bridgetown, Barbados on Saturday.

9. Selling Pressure: Lows are being challenged in Bitcoin as it hovers above 61,000.00 USD. Cocoa has stumbled dramatically this week and is below 8,000.00 per metric ton. Who will be courageous and wager on reversals higher? Speculators should remain cautious and understand price velocity that looks tantalizing can also prove costly to trading accounts.

8. Grounded: Boeing’s Starliner remains docked to the International Space Station. Problems have plagued The Boeing Company the past handful of months, and their ambitions of becoming a power within NASA’s explorations are also underachieving. SpaceX and Airbus are certainly paying attention to Boeing’s ineffectiveness.

7. Teetering: The African National Congress and Democratic Alliance political parties in South Africa are feuding about how coalition power will be shared within the National Unity Government. The USD/ZAR has become volatile and is near 18.21000 as tensions mount and reversals hit. Financial institutions are waiting for an optimistic resolution, while also fearing the possibility of an abandonment to positive visions.

6. Inflation: Core Personal Consumer Expenditures Price Index statistics will be released today from the U.S. Yesterday’s GDP Price Index came in slightly higher than anticipated which kept USD centric bullish positions relatively strong. However, other American statistics have weakened significantly and the mid-term looks troubling for the U.S economically. Stagflation remains a concern. The Federal Reserve is likely hoping to see today’s PCE numbers come in weaker than expected, which would allow the central bank to hint towards Federal Fund Rate cuts later this year.

5. Ennui: President Macron could find his political power further eclipsed after France’s first round voting results this coming Sunday. French voters appear ready to deliver a resounding message of dissatisfaction to the listless ruling government. Election turnout statistics should be watched. The second round of voting will be on the 7th of July. Financial institutions have braced for a shift of power already, but the EUR/USD will still produce volatility in the days ahead.

4. Geopolitical Risks: Russia, China and their allies are likely considering how they will prepare for a potential change in the U.S White House. Foreign policy following last night’s debate between Biden and Trump must be planned. The fact that Trump is viewed as a rather flamboyant personality and not bound by cautious diplomatic attitudes creates a calculus that U.S adversaries will have to consider. While the potential exists that some nations may try to be more aggressive now, they also know that a Trump victory in November would change the international political landscape long-term.

3. Bank of Japan: The Core Tokyo Consumer Price Index produced a gain of 2.1%, which was above the forecasted amount of 2.0% earlier today. The BoJ continues to remain far too dovish regarding interest rate policy and financial institutions are buying the USD/JPY in massive waves. The USD/JPY is around 160.750 as of this writing and did traverse above 161.000 earlier, these are Forex levels not seen since the late 1980’s for the USD/JPY. Japan’s attempt to stimulate the economy with a weaker Japanese Yen may work, but the U.S and others may start to look at the BoJ’s soft devaluation in a very negative light. Speculators of the currency pair need to be extremely careful, because the BoJ has the ability to intervene violently and cause momentary spikes which could prove deadly for day traders trying to take advantage of the outlandish bullish trend.

2. Behavioral Sentiment: Markets will be a looking glass into the future today, this as trading houses react to the realization that Donald Trump is likely going to be the next U.S President. While there are no guarantees regarding the U.S election outcome yet, the broad markets will certainly feel a shift of momentum in the coming days as large players adjust from a cautious approach to more aggressive postures regarding a Trump presidency. U.S equity indices remain near record highs, and the potential of a more business friendly White House which doesn’t threaten tax hikes on U.S corporations will likely affect speculative outlooks.

1. Power: The resounding defeat of Joe Biden last night in the Presidential debate will spark a heated battle among Democratic power brokers. Biden will certainly be asked to step aside after last night’s poor performance. However, Biden is stubborn, and Dem leaders like Nancy Pelosi and Barak Obama among others will have a difficult task to try and convince Biden for the sake of the nation that he must do the honorable thing and release his political delegates at the August Democratic National Convention in Chicago. If this doesn’t happen, the Republicans may be able to achieve a landslide victory by taking control of not only the White House but the Senate too, along with maintaining power in the House of Representatives. All the camouflage in the world last night, including the liberal media, couldn’t mask the inability of Joe Biden to be coherent.

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USD Weakness: Wagers on Fed Outlook as Risk Appetite Surges

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

USD Weakness: Wagers on Fed Outlook as Risk Appetite Surges

Yesterday’s start for the week was slightly subdued as many nations in Europe enjoyed a long holiday weekend. In Forex the past few weeks the USD has taken on a weaker stance and this was reiterated by last Wednesday’s slightly lower U.S Consumer Price Index results. The outlook of investors and financial institutions has once again shifted and a more dovish U.S Federal Reserve is being anticipated for the moment.

However, while inflation data from the U.S did come in with lower marks via the CPI report last week, it should be remembered the PPI actually came in higher. While there is a natural instinct to always be optimistic, the prudent fact is that risk management remains important. A glance into the looking glass via the USD/JPY shows that all is not calm in the world of Forex.

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USD/JPY Three Month Chart on the 21st of May 2024

While many currencies have gained against the USD since late April, the price action in the USD/JPY represents anxiety regarding central bank policies from the Bank of Japan and Federal Reserve. The USD/JPY since experiencing two interventions from the BoJ has incrementally climbed again – meaning the Japanese Yen remains weak, this while other major currencies like the GBP and EUR have gained against the USD. Yesterday’s Tertiary Industrial Activity data from Japan came in negative, showing strains exist within the Japanese economy which underlies why the Bank of Japan may be staying cautious. The ability of the USD/JPY to not trade in a correlated manner to global Forex is proving difficult for some day traders. Volatility within the USD/JPY is not finished.

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USD/ZAR 1 Year Chart on the 21st of May 2024

However, if people want to look at the knock-on positive influence of the weaker USD, they can glance at the USD/ZAR which is near important mid-term lows. South Africa will be conducting their national election next week on the 29th of May, which is likely to cause some nervousness for the currency pair. Even though South Africa continues to suffer from a struggling economy caused by questionable government policy and faltering infrastructure, the USD/ZAR is experiencing solid bearish behavior. However, risks certainly remain for the South African Rand and at its current values, some financial institutions may view the currency pair suspiciously.

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Gold Six Month Chart on the 21st of May

Gold remains within sight of record values achieved yesterday when the 2,440.00 USD plus levels were touched. The shift in behavioral sentiment towards risk appetite and a weaker USD centric attitude seemingly geared towards dovish Fed mid-term perspectives have helped the precious metal. Day traders should remain cautious with Gold and while the technical trend is enticing, it will be good to remember too much leverage coupled with blind betting can be dangerous. A clear warning sign that speculative zeal is high in Gold is that the current price of the commodity is 30.00 USD lower for the moment compared to yesterday’s highs. Price velocity can prove costly when a daily reversals goes against wished upon directions.

U.S equity indices and their ability to fight toward new highs is a clear sign risk appetite via outlooks within financial institutions and from investors remain strong. U.S Treasury yields should be monitored and if they continue to erode this will fuel optimism. One additional note for traders this coming week is that Memorial Day will be observed in the U.S next Monday, meaning there may be more impetus for some to buy U.S equity indices now instead of waiting out a long holiday weekend and coming back to markets which have gained. Yes, Fear of Missing Out could be a factor.

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USD/CNY Three Month Chart on the 21st of May 2024

Monday, 20th of May, China Loan Rates – while banks kept their 1 and 5 year Prime Rates in place per the reports yesterday. Last Friday’s Retail Sales figures came in weaker than anticipated, and New Home Prices produced another decline. Industrial Production numbers were however stronger than expected before going into last weekend. China remains in a difficult position economically and the USD/CNY should remain observed because it is elevated.

Tuesday, 21st of May, Canada Consumer Price Index – inflation numbers from Canada will be watched carefully. The results will impact the USD/CAD certainly, but unless there is a surprise result which misses estimates wildly, the currency pair should return to a USD centric mode rather quickly.

Wednesday, 22nd of May, U.S Federal Reserve FOMC Meeting Minutes – while this report is not read by many people, and the Federal Reserve will have taken a cautious rhetorical tone, the report may offer some tidbits for consideration. However, the reality is that U.S economic data has been a mess for the past few months. GDP showed signs of decreasing last month, but the multi trillion dollar question is if inflation is now under control. Folks looking for answers will not find them in the Fed notes. They will have to wait like everyone else for more data in the weeks and months to come.

Thursday, 23rd of May, European Flash Manufacturing and Services PMI – the Purchasing Managers Index reports from European Union members and the U.K are anticipated to show signs of some improvement mostly. The U.S will also be publishing its reports, although the Services report from the States is expected to be slightly weaker. Investors will react to all of this data. Positive readings from E.U and U.K would likely have a positive influence on the EUR/USD and GBP/USD for bullish speculators.

Friday, 24th of May, U.K Retail Sales – consumer spending is anticipated to show a decline. However, the last Gross Domestic Product report from the U.K was stronger than anticipated. While the Retail Sales data is important for the GBP/USD, as long as the outcome meets expectations or comes in slightly stronger than estimated the currency pair could retain technical value.

Friday, 24th of May, U.S Revised Consumer Sentiment and Inflation Expectations – the University of Michigan numbers for sentiment came in weaker than expected last month. The anticipated outcome is slightly better for this report. However, the inflation numbers should be watched carefully via the U. of Michigan statistics. The tick higher in recent reports regarding where prices are expected to go by consumers is troubling for the prospects of the U.S economy.

If American consumers are not confident they will spend less. Yet, within the strange world of economic data and policy consisting of lagging and forward looking numbers, if consumers feel less optimistic this means the U.S Federal Reserve will be pushed to consider cutting the Federal Funds Rate, unless inflation actually does remain elevated. And again, traders should remember that a long U.S holiday weekend might add to the rather electric financial markets.

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AMT Top Ten Miscellaneous Wonders for the 12th of April 2024

by with No Comment AMT MarketsArtificial IntelligenceFeatured Highlights

AMT Top Ten Miscellaneous Wonders for the 12th of April 2024

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10. Free Press: Brazil and the Lula de Silva government are cracking down on dissent in social media. ‘X’ – formerly Twitter – led by Elon Musk is fighting back and refusing to cooperate as Brazilian ‘leadership’ attempts to intimidate the ‘loyal opposition’ in the legislature.

9. GROOT: Nvidia is working on ‘humanoid’ robotics. Project GROOT was presented by Jensen Huang at the GTC Conference. The synergy between machine learning, semiconductors and robotics is an evolution taking place before our eyes. Tesla is involved in similar research as it works on Optimus.

8. Hot Chocolate: Speculation in Cocoa has brought the commodity above 10,400.00 USD per metric ton as of this writing. Questions about gravity and hypersonic speculative values are logical at this juncture.

7. Seclusion: Do humans still need each other? People are relying on their mobile devices for social interactions. Robotics with AI capabilities will make our existence potentially more lonely. Open source software DOBB-E will be part of this future as household chores are taken care of by ‘machines’.

6. Iran: Those with holiday excursion plans which include Teheran this weekend may need to check on ticket availability due to the possibility of flight cancellations.

5. Fed Liberty: President Joe Biden this week spoke about an interest rate cut coming from the Federal Reserve this year, yet Consumer Price Index statistics are demonstrating escalating expenses. Current U.S government leaders may want to spend less on ‘vote buying’ via student loan forgiveness and think about conservative fiscal practices. Why should Americans who choose not to attend universities pay for those who did via higher taxes? Are Fed and Treasury officials still independent?

4. Risk Averse: Gold is within sight of 2,400.00 USD this morning. In the meantime U.S bond yields have inverted completely except for the 30-Year issue. Financial institutions are showing nervous behavioral sentiment.

3. USD Centric: Forex has seen reactive trading this week as financial institutions begin to conclude the U.S Federal Reserve’s monetary policy ‘over time’ will remain disturbingly difficult and full of doublespeak.

2. Caution: Mixed results are flourishing in the major U.S stock indices as the Nasdaq 100 and S&P 500 touch late March values, and the Dow Jones 30 has returned to February levels. Higher than anticipated interest rates are causing turbulence.

1. Energy Illusions: As the prices of food, transportation and housing escalates isn’t it time governments start to question their ‘green’ policies which are making the costs of energy production more expensive? We all want a clean planet, but logical strategies must be applied to create efficient use of resources.

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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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Forex Volatility as Central Banks, GDP, U.S Equities Shadow

by with No Comment AMT MarketsAssetsFeatured Highlights

Forex Volatility as Central Banks, GDP, U.S Equities Shadow

Perhaps it is good that today will see a lack of important economic data which will affect the markets. It might give a chance for day traders to relax and to gauge the thinking of financial institutions and investors before Central Banks, and important growth and inflation numbers shift behavioral sentiment later this week. While Forex has remained a minefield, U.S equity indices have soared to record heights. More volatility will come.

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Shanghai Composite Index Five Year Chart as of 22nd January 2024

Risk assessment is always critical, it needs to be mentioned the Shanghai Composite Index is again facing severe selling pressure. This is a direct result of foreign investors losing faith in China’s economic policy and political maneuverings. The slump in Chinese equities is also hitting the Hang Seng Index in Hong Kong badly. Deflation is a legitimate fear in China. The dual consequences of a failing housing sector and crumbling equity values is harming Chinese citizens.

While the strong selloff in Chinese equities would have caused a massive amount of reaction in the global markets a few years ago, the ability to shift assets elsewhere by foreign investors who were active in China has likely reduced potential knock on effects in other global equity markets. It must also be pointed out that China continues to sit on a massive amount of USD holdings. China is a large investor in Africa and their attempt to steer influence there remains abundantly clear.

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Nifty 50 Index Five Year Chart as of 22nd January 2024

India has directly benefited from the outflow of investments from China. A look at the Nifty 50 Index shows the upwards momentum India’s equity market has enjoyed as it has started to attract more direct foreign investment. The ability of the India stock market to go up while China struggles is a barometer worth studying. Outflow vs. inflow.

Monday, 22nd of January, U.S Conference Board’s Leading Index – the reading is not at the forefront of consideration for investors, they will be watching the results of U.S Treasury yields and stock indices more closely than this report.

Tuesday, 23rd of January, Bank of Japan Monetary Policy Statement and Outlook Report – no major change is expected from the BoJ quite yet. The USD/JPY has been volatile and provided a solid trend upwards since the start of January. Day traders looking for a reversal lower to develop should be extremely cautious. Data from Japan has been mixed and the BoJ is likely to remain conservative. The weaker JPY helps exports from Japan it must be remembered, but it also may factor into inflation creeping into the Japanese economy.

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NZD/USD One Month Chart as of 22nd January 2024

Tuesday, 23rd of January, New Zealand Consumer Price Index – the inflation report is expecting a result of 0.5%, which would be below the previous result of 1.8%. The NZD/USD has taken a bearish dive since late December. Like all major currencies the New Zealand Dollar remains USD centric. Volatility in the NZD/USD may occur via the inflation numbers from New Zealand, but like the USD/JPY it may find its biggest impetus coming from afar – U.S data and the Federal Reserve outlook.

Wednesday, 24th of January, E.U and U.K Flash Manufacturing and Services PMI reports – Germany and France are anticipating slightly better Manufacturing Purchasing Managers’ Index numbers. Services numbers are expected to be slightly weaker from Germany. Solid results from these combined publications could help the EUR/USD create a bit of bullish momentum.

The U.K numbers via their Manufacturing PMI is expected to be slightly better than the previous outcome, but the Services number a bit worse. Economic data from Britain remains mixed to lackluster. Higher inflation numbers last week did the Bank of England no favors. The GBP/USD will be affected briefly by the results, but trading in the Forex pair is likely to remain geared towards thoughts about U.S data coming this Thursday and Friday.

Wednesday, 24th of January, Bank of Canada Rate Statement and Monetary Policy Report – the key lending rate from the BoC is expected to remain unchanged. However, Canadian economic numbers have been problematic, and while the BoC may want to wait for the U.S Federal Reserve to move first regarding interest rates, critics of the BoC are becoming louder. The USD/CAD will react to the Bank of Canada’s rhetoric, but unless there is a major surprise the currency pair will remain heavily USD centric.

Thursday, 25th of January, European Central Bank Main Refinancing Rate and Monetary Policy Statement – the ECB is expected to provide no major changes. The 4.50% interest rate is anticipated to stay in place. The ECB will likely ‘sound’ a calm tone and say while improvements are being seen in the E.U, that areas of difficulty remain but are understood and being managed.

Thursday, 25th of January, U.S Advance Gross Domestic Product – the key growth number from the U.S is anticipated to show a gain of 2.0%. This number will get a reaction in Forex, equities and bonds. The Federal Reserve’s FOMC meeting is next week and this GDP result will factor into their monetary policy rhetoric. Because it is an election year in the U.S, this number will also get an additional ‘sounding board’. Day traders should be careful before and after the noise caused by this growth report.

Friday, 26th of January, U.S Core Personal Consumption Expenditures – the vital inflation number carries an estimated gain of 0.2% before its release. As much as the Fed watches the GDP number, the inflation result via the Core PCE is a huge component of the U.S central bank’s thinking. The USD will react to this report and Forex traders should brace for a reaction from financial institutions. If the number is weaker than expected the USD could find selling momentum, if the number is stronger more USD strength could be seen. Folks looking at the GDP and Core PCE reports should also look for potential revisions to previous months results, which could cause another wave of volatility in the markets if they are significant.

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Choppy Forex Conditions and the Trading Week Ahead

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Choppy Forex Conditions and the Trading Week Ahead

Forex traders may be feeling a bit perplexed if they have blindly been looking for a weaker USD the past two weeks. While outlook for a bearish USD over the mid-term remains a theme from many analysts, day traders need to accept that intra-day results often create price fluctuations which make wagering on short and near-term perspectives dangerous. Trading conditions have been turbulent the past week and early this morning.

While analysis of monetary policies and economic data are vital, it is also important to remember there is a significant difference between the desires and needs of businesses functioning in global commerce, and the trading perspectives of speculators who are hoping to ride on the back of ‘insights’ provided by experts. It should also be considered that coming out of the holiday season many global corporations are now repositioning for 2024, and the financial institutions that work for these companies are also trying to get these outlooks aligned.

The USD has become stronger over the past day against many major currencies, but looking for a 100% reason to explain why this happened is likely misguided. Most U.S financial institutions were closed yesterday for the MLK holiday observance. While inflation data from the U.S Producer Price Index was weaker than anticipated last Friday and caused a brief spurt of USD bearishness, the greenback is lingering within the stronger realms of its near-term values against many currencies.

The idea that recent USD bullishness may simply be a sign that financial institutions believed the greenback had been oversold over the past couple of months may be correct, but this also opens the door for the potential of a reversal to develop and more USD selling as sentiment and economic data try to dance in a unified manner.

The week ahead may still prove to be choppy, but there are interesting bits of evidence that risk appetite lingers within the stomachs of many large investors. The slight rise in U.S Treasury yields recently may be worrying to some, but it should be acknowledged that the climb higher has been achieved while yields remain near mid-term lows. The same can be said for U.S equity indices which provided choppy conditions last week but certainly remain in highly valued realms.

Patience is a needed tool when trading, speculators looking for instantaneous results often lose money because they are being too aggressive. Risk taking tactics always have to be given importance.

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Gold Three Month Chart as of 16th January 2024

Gold remains rather comfortable above the 2000.00 USD level. As of this writing the spot price for the precious metal is near 2050.00 USD. This is fascinating because it underscores the notion that long-term gold buyers appear to believe the USD will remain within weaker territory. But again, short-term and mid-term outlooks for speculative wagers are two very different things.

Tuesday, 16th of January, Canada Consumer Price Index – the inflation numbers from the ‘North’ are expected to be lower than last month’s results.

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Shanghai Composite Index Five Year Chart as of 16th January 2024

Wednesday, 17th of January, China Industrial Production and GDP – recent economic reports regarding the deflationary troubles the nation is facing have been loud. The industrial and growth numbers should be monitored. The Shanghai Composite Index (SSE) is trading near values last seen in May of 2020, this is not a good signal.

Wednesday, 17th of January, U.S Retail Sales – the consumer data will have an affect on sentiment in the broad markets. The results are anticipated to match the Core Retail Sales gains from last month, and the broad number is expected to be slightly higher. Traders should be alert in case a surprise outcome occurs. If the statistics are close to the estimates, this could create some calm in Forex and perhaps set the table for USD weakness to be seen for a moment.

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USD/JPY Three Month Chart as of 16th January 2024

Thursday, 18th of January, Japan Revised Industrial Production – while the report is not viewed as a major piece of financial impetus in the speculative world, the USD/JPY has been rather dangerous for short-term traders caught on the wrong side of recent bullishness. If the number comes in at minus -0.9% as expected, it will then likely take USD centric bearish sentiment to cause a reversal lower. The past two weeks in the USD/JPY have been difficult for traders looking for downside momentum. A stronger than expected industrial number from Japan would likely help USD/JPY bearish outlooks.

Friday, 19th of January, U.K Retail Sales – the British consumer spending numbers are expected to come in weaker. The GBP/USD is currently trading near early January values as choppy short-term conditions persists.

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Leverage and the Holidays Often Leads to Costly Volatility

by with No Comment Behavioral SentimentCommoditiesFeatured Highlights

Leverage and the Holidays Often Leads to Costly Volatility

This may seem like an unfriendly reminder for this time of year, but holiday trading can lead to dangerous storms for traders. Keeping a realistic viewpoint regarding your ambitions during Christmas and New Year’s is important.

Most day traders cannot afford to have an outlook that is beyond the short and near-term. This is an ugly fact many speculators with less than deep pockets have to acknowledge if they are new to speculating. While large traders and financial institutions can maintain mid and long-term outlooks, day traders who do not have the funds to keep overnight positions need to operate in an entirely different fashion.

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Trends via technical charts and fundamentals are crucial for all traders. Behavioral sentiment is a key ingredient too for all participants chasing assets. However, day traders also need to understand unique risk management limitations. The use of leverage is a vital dynamic, and can cause devastation fast when too much money has been wagered. The use of leverage by day traders effectively raises the probability that a trade will lose money.

Incremental changes in value to a Forex pair, commodity and equity share being traded on a brokers platform by a speculator using ‘borrowed’ money via an account that allows for margin often leads to quick outcomes that fail. Many brokers offer traders ‘polite’ leverage ranging from 10% to 100% in extra funds, this while enticing the speculator to the potential of profiting in a quicker and more robust manner. It should also be noted that when a broker is offering vast amounts of leverage, they are knowingly increasing a traders likelihood of losing. The use of leverage beyond 10% leads to plenty of expensive mistakes.

Unfortunately, the simple truth is if you can make fast money trading, you can lose fast money while trading. The use of the word speculating is simply a gentle way of not using the word ‘gambling’.

Traders tempted to pursue wagers during the next couple of weeks should remember a lack of normal volumes make many asset classes more volatile, meaning the use of leverage by speculators often leads to dangerous gyrations within their accounts.

Risk appetite has taken on a optimistic tone globally because of the upside U.S equity markets have been producing, while U.S Treasury yields are decreasing, but dangers still lurk. Day traders need to remain realistic regarding their pursuit of quick hitting trades during the holiday season, and make sure they use solid tactics while pursuing their outlooks. The trend may appear to be your friend, but short-term reversals in the wrong direction can cost money.

No one wishes for bad things, but speculators should also note that if risk adverse events occur during the holidays, that ‘negative news’ can often become amplified this time of year and cause more volatility. Speculative positions in Forex, Crude Oil and gold can produce rather wild results, and thin trading volumes can add to the swift changes in values.

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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 Musings for the 17th of November

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Musings for the 17th of November

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10. Book: The Art of War by Sun Tzu.

9. Music: Pablo Casals playing Bach’s – The Six Cello Suites.

8. Cricket: India and Australia will meet in the World Cup Final this Sunday in a match between two of the world’s best squads.

7. Gold: The precious metal is trading within sight of its October highs and may find speculative buyers looking for potential upside via wagers.

6. Commerical Real Estate: WeWork bankruptcy knock on effects will cause additional strains in U.S market, this as the sector struggles with vacancies in this era of ‘remote’ employees.

5. Risk Appetite: U.S equity indices are at three month highs, U.S Treasury bond yields at one week lows as optimism grows in the outlooks of long-term investors.

4. Data Watch: Retail Sales numbers from the U.K, and U.S Housing Starts and Building Permits statistics will be released today.

3. USD: Dollar Index futures are trending lower and near values last seen in the third week of September as financial institutions brace for a weaker USD mid-term.

2. U.S Treasuries: Yields are incrementally declining, helping push the USD lower, and creating positive equities momentum, this as U.S bonds appear ready to sustain a cycle lower if investors can remain tranquil.

1. Federal Reserve: Inflation data via the CPI and PPI were weaker than anticipated, and the U.S Fed’s December FOMC Statement should begin to sound less agressive.

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Concerns Ahead and a Potentially Noisy Week for Day Traders

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Concerns Ahead and a Potentially Noisy Week for Day Traders

In the wake of last week’s central banks follies, day traders have what may appear on the surface a rather comfortable week of economic data to consider as they make their wagers. However, there are outside risk events looming which will likely stir the emotions and positions of financial institutions, and cause knock on tremors that speculators feel caused by a noisy storm of experts and media pundits.

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SP 500 Index Three Month Chart as of 25th of Sept. 2023

U.S equity indices have struggled recently and this should be viewed as a barometer of current behavioral sentiment. Concerns regarding higher Crude Oil prices, and talk of a growing U.S political crisis as a government shutdown is threatened (remember next year’s election is shadowing all spectacles in Washington D.C presently) highlight the nervous state of affairs. The USD has been stronger and gold has remained under pressure in recent trading. Risk adverse trading is proving rather flavorful for the moment.

The ongoing strong rhetoric from the U.S Federal Reserve and what appears to be an almost certain interest rate hike in November is causing market sentiment to remain anxious. Financial institutions are not only lining up to buy U.S Treasuries, but money market funds are also being sought too which offer the ability to accumulate returns from higher interest rates. While cash is being parked in ‘sure things’ because financial institutions and large investors are keen on locking in ‘known’ returns (profits), this creates potentially less money supply for buying of U.S and global equities momentarily.

Troubling economic data continues to mire the terrain also for financial institutions, and the heightened fear is causing a reaction which day traders need to deal with as short-term volatility mounts creating dangerous speculative conditions. Consumers face a rather large bag of ‘troubles’ via higher mortgages, debt obligations on credit cards and student loans, and inflation costs. Yet, intriguingly the U.S economy has shown resilience which is almost perplexing.

Current behavioral sentiment appears fragile and ready to crack open into a chaotic storm if too much pressure is exerted. Day traders should be cautious this week because plenty of diatribes and warnings are sure to be heard. Unfortunately the warnings being heard now for this coming week could prove correct.

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EUR/USD Six Month Chart as of 25th Sept. 2023

Monday, 25th September, Germany Business Climate via Ifo – investors will keep their eyes on the sentiment reading from Germany which is expected to be worse than last month’s results. The EUR/USD is trading at six month lows.

Tuesday, 26th September, U.S CB Consumer Confidence – the result is anticipated to be slightly negative compared to last month’s outcome. U.S consumers have remained strong and financial institutions will want to see if they remain optimistic regarding their outlooks. The outcome could affect the USD, particularly if the number is weaker than expected.

Wednesday, 27th September, U.S Durable Goods Orders – this report could prove noteworthy via the broad and core reports. Durable Goods Orders are a relatively important barometer on U.S big ticket spending and demand. The numbers are likely to cause a rumble in U.S equity markets.

Thursday, 28th September, Germany CPI – the inflation results will be watched carefully by EUR/USD speculators. Higher prices in Germany are not welcome and a larger number than anticipated would be troubling.

Thursday, 28th September, U.S GDP – the Gross Domestic Product data from the States on Thursday will be closely monitored and likely provide impetus for Forex and major indices. If the growth numbers are stronger than expected this will serve as another nail for the U.S Federal Reserve to hit when it makes its case for another interest rate hike. While it is good the U.S economic growth numbers have been relatively strong, better than expected data could play into U.S Treasury yields remaining high and spark additional complex considerations for investors.

Friday, 29th September, Canada GDP – the data from Canada is expecting a negative ‘growth’ result which would have an affect on the USD/CAD.

Friday, 29th September, U.S University of Michigan Consumer Sentiment – the revised numbers will give insights into American spending habits. The previous two months have been more lower than anticipated, this outcome is expected to produce a reading of 67.7.

Saturday, 30th September, China Manufacturing PMI – while the Purchasing Managers Index reports from China are forecast to show slight improvements, analysts remain worried about economic conditions in the nation. Transparency remains a focal point for investors who want to make sure the results they are being given are accurate.