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Back To The Future: A US Dollar Bear Market?
By Knowledge Leaders Capital This slide package is our Knowledge Leaders Strategy mid-quarter update and can be downloaded at the link below. The discussion is broken into three sections: SECTION 1: History does not support the view that the USD is propped up by a monetary tightening cycle. The US Dollar’s moves are more fundamentally based on aggregate savings, which have been declining for a couple years. The President’s falling approval rating and normalization in the energy markets may be the catalyst for the USD to enter a bear market. SECTION 2: While it is hard for investors to comprehend how possibly interest rates can fall whi... -
Finance 0
The Question Every Goldman Client Is Asking – ‘Is An Equity Correction Imminent?’
You’re a Goldman client. Ok, no you’re not. But let’s pretend. What is it you’re thinking about these days? Well as it turns out, you’re thinking the same thing everyone else is thinking (with the possible exception of Target managers-turned hedge fund titans buying XIV on dips with other people’s money). Namely, you’re thinking this: “Is an equity correction imminent?” I mean “yes”, the central bank put is still firmly in place and that means the BTFD mentality is still deeply entrenched, as are the feedback loops the BTFD mentality fosters, the same feedback loops that make multi-millionaires out of former Target l... -
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Bulls Get Benefit Of Doubt, But…
It’s a new week, so let’s start things off right with an objective review of my key market models/indicators and see where things stand. To review, the primary goal of this exercise is to try and remove any subjective notions about what “should” be happening in the market in order to stay in line with what “is” happening in the markets. So, let’s get started. The State of the Trend We start our review each week with a look at the “state of the trend.” These indicators are designed to give us a feel for the overall health of the current short- and intermediate-term trend models. Executive Summary: The short-term Trend Mode... -
Finance 0
USD/CAD Forecast Sep. 11-15
Dollar/CAD had a dramatic week, crashing on another hawkish hike from the BOC. Can it break under 1.20? Manufacturing sales stand out this week. Here are the highlights and an updated technical analysis for USD/CAD. The BOC did it again. The Bank of Canada raised interest rates, and that was not fully priced in. They also left the door open for another move on the rates. The BOC is happy with the growth of the Canadian economy and for good reasons. The jobs report came out at 22.2K jobs gained, better than expected and the unemployment rate dropped to 6.2%. Adding some weakness of the US dollar, USD/CAD fell to the 1.20 handle at some point,... -
Finance 0
Treasury Snapshot: 10-Year Yield At 2.06%, Lowest Levels Since November
Note: We’ve updated this commentary with data through Friday’s market close. Let’s take a closer look at recent activity in US Treasuries. On Friday, the yield on the 10-year note ended the day at 2.06% and the 30-year bond closed at 2.67%, some of the lowest levels since November of 2016. Here is a table showing the yields highs and lows and the FFR since 2007 as of Friday’s close. The 2-10 yield spread is now at 0.79%. The chart below shows the daily performance of several Treasuries and the Fed Funds Rate (FFR) since the pre-recession days of equity market peaks in 2007. A Long-Term Look at the 10-Year Note Yield A ... -
Finance 0
Weekly Economic & Political Timeline – Sunday, Sept. 10
This week will have a relatively full news agenda, including some items of key U.S. data. The agenda will be dominated by monthly policy commentaries and bid rates from the Bank of England and the Swiss National Bank. Therefore, volatility this week should be at a similar level to last week, helped by the fact that the typically thin summer period is over. It may be that the degree of damage which may be caused to the U.S.A. by Hurricane Irma this week could have a major impact upon the Forex market via the U.S. Dollar. The market will probably be most active on Thursday, and Friday to a lesser extent. U.S. Dollar It will be a reasonably... -
Finance 0
The Big Unwinding
Below is $USDJPY weekly, with $GOLD:$USD in the background. I am using $USD as the denominator for consistency. Comments: 1. $USDJPY and $GOLD:$USD are inversely correlated 2. The long super cycle for $USDJPY is 180 months (or 15 years) low to low, and the half cycle harmonic is 90 months, low to low. 3. The long super cycle low bottomed in 2011, and its next low will be in 2026/27, which also coincides with the 5th K wave peak in commodities. 4. The 90 month half cycle also bottomed in 2011, with the 15 year super cycle. The next half cycle low will be in first half of 2019, followed by 2026/27, with the 5th K wave peak in commodities. Proba... -
Finance 0
Weekly Forecast: EUR/USD Two Year Highs The Extension Of Trend?
US Dollar Forecast: Dollar Drop Crosses 12%: Can Inflation Turn the Tide Ahead of the Fed? The U.S. Dollar has been pulverized by a plethora of factors. But after a rise in July inflation, will another bump help to buck the bearish trend? Euro Forecast: EUR/USD to Stay Bid Ahead of FOMC as ECB Unveils Post-QE Game Plan EUR/USD remains bid following the ECB meeting, with the pair at risk for a further advance amid waning expectations for another Fed rate-hike in 2017. British Pound Forecast: Advance Against USD Set to Continue The climb in GBP/USD will likely continue in the week ahead though the British Pound is not looking as well p... -
Finance 0
How To Ride 33-Month High Euro With ETFs
The euro has been on a tear lately, being at a 33-month high against the greenback. Heightened speculation over the European Central Bank’s (ECB) possible announcement of the QE wind down as soon as in October was behind this strength (read: ECB to Wind Up QE Soon? ETFs in Focus). The ECB held interest rates steady and expects rates to “remain at their present levels for an extended period of time.” Though the ECB agreed in its latest meeting on Sep 7 that the latest euro rally could mar the recovery in the inflationary backdrop, he did not talk about any way to deal with the issue. Several market watchers, including the chief Eu... -
Finance 0
EUR/USD Closes Higher On Bull Pressure But With Caution
EUR/USD: With the pair seen closing higher on Tuesday, more recovery is envisaged. Resistance comes in at 1.2100 level with a cut through here opening the door for more upside towards the 1.2150 level. Further up, resistance lies at the 1.2200 level where a break will expose the 1.2250 level. Its daily RSI is bullish and pointing higher suggesting further upside pressure. Conversely, support lies at the 1.2000 level where a violation will aim at the 1.1950 level. A break of here will aim at the 1.1900 level. Below here will open the door for more weakness towards the 1.1850. All in all, EUR/USD faces further upside towards its key resistance....
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