The world’s second largest primary silver mine, Tahoe Resources Escobal Mine, was forced to shut down operations in Guatemala by a ruling from the country’s Supreme Court. This was due to a provisional decision by the Guatemalan Supreme court in respect of a request by CALAS, an anti-mining group, for an order to temporarily suspend the license to operate the Escobal Mine until there is a full hearing. (picture courtesy of Tahoe Resources) While this story has been out for a few days, I believe there is a great deal of misinformation on the Mainstream and Alternative media about the current situation and future outcome of Tahoe’s flagsh...
GBP/USD reversed directions last week, losing 130 points. The pair closed at 1.2884. This week’s highlights are Average Earnings Index and Claimant Count Change. Here is an outlook for the highlights of this week and an updated technical analysis for GBP/USD. In the UK, Brexit jitters increased as all three PMIs reported softer growth in May and missed estimates. In the US, the Federal Reserve minutes pointed to division over the timing of the balance sheet reduction and concerns about low inflation. There was mixed news on the employment front, as Nonfarm Payrolls rebounded to 222 thousand, but wage growth remained weak. Updates:...
(from my colleague Dr. Win Thin) EM FX closed last week on a firm note, as the stronger than expected US jobs gain was mitigated by lower than expected average hourly earnings. Still, we believe that global liquidity conditions will continue to move against EM, as the Fed continues tightening and others join in. This week, BOC may be the first of the others to hike rates. Meanwhile, EM inflation readings this week are expected to remain low, underscoring that EM monetary policy is unlikely to be tightened anytime soon. That should lead to narrower interest rate differentials between DM and EM, which in turn should keep downward pressure on EM...
Financial markets will remain preoccupied with Fed policy in the week ahead as Chair Yellen testifies in Congress and key US inflation data is released. US Dollar Forecast: US Dollar May Shrug Off Soft Inflation as Yellen Remains Hawkish The US Dollar may shrug off soft wholesale and retail inflation figures as Fed Chair Janet Yellen uses Congressional testimony to make the case for rate hikes. Euro Forecast: Euro Bulls Get Room to Run: But Will They Show Up to Drive the Trend? Next week brings a light economic docket for European data, and there are no Mario Draghi speeches on the calendar: Presenting an opportune time to substantiate rece...
The White House issues page titled Bringing Back Jobs And Growth claims “President Trump has outlined a bold plan to create 25 million new American jobs in the next decade and return to 4 percent annual economic growth.” Let’s take a look at GDP trends and the reasons behind those trends to assess the likelihood of Trump’s claim. US Real GDP Quarterly at Annualized Rate US Real GDP Per Capita Quarterly at Annualized Rate Let’s smooth out some of the volatility by using annual GDP growth. US Real Annual GDP The trend in real GDP went from over 4% in 1948 to 2% in 2016. Reasons for Decreasing Growth Rising debt and debt service l...
It’s make or break time for the market. Sentiment for the S&P 500 Index (SPX) is sitting right on top of its confirming uptrend line. A clear break of this line would indicate that the bulls are retreating and the bears have gained control. It would most likely result in SPX falling below 2400. Support and resistance levels gleaned from the Twitter stream for SPX show how critical the 2400 level is. Everyone is talking about 2400 and almost nothing else. There aren’t any clear support levels below 2400 so if it breaks we could see a waterfall type decline as everyone panics. The recent weakness is finally having a negative impact on ...
The difference between success and failure in Forex trading is very likely to depend upon which currency pairs you choose to trade each week, and not on the exact trading methods you might use to determine trade entries and exits. Each week I am going to analyze fundamentals, sentiment and technical positions in order to determine which currency pairs are most likely to produce the easiest and most profitable trading opportunities over the next week. In some cases it will be trading the trend. In other cases it will be trading support and resistance levels during more ranging markets. Big Picture July 9 Last week, I saw the best possible trad...
Exactly six months ago, when oil bulls still held on to some fleeting hope that OPEC may somehow stabilize the crash in oil prices despite the shift in marginal oil production from low-cost OPEC producers to US shale (a hope which is now gone as the just disclosed letter from Andy Hall demonstrates), Goldman noticed something troubling: an unprecedented collapse in gasoline demand. As the firm’s energy analyst Damien Courvalin said on February 8, when discussing the 6% fall in US gasoline demand, such a plunge “would require a US recession” and add that “implied demand data points to US gasoline demand in January decl...
As oil continues to struggle amid persistent worries about US production, rising OPEC exports, and nagging concerns about who would or wouldn’t support deeper/longer cuts… …some folks are asking questions about US HY credit. So far, HY as a whole as remained relatively resilient to widening in HY energy. How long that can last remains to be seen. As Bloomberg notes, “energy bonds took the biggest hit in U.S. high-yield [this week] as oil slumped, heading for a weekly loss as drillers resume a year-long expansion.” A couple of examples: Sanchez Energy leads with biggest drop among all high yield bonds Co.’s 7.75% notes due 20...
The U.S. trade deficit shrank in May 2017, owing to impressive export data. Rising shipments of automobiles and consumer goods contributed to the decline. Per the Commerce Department, U.S. trade deficit declined 2.3% in May to $46.5 billion compared with $47.6 billion in April, while exports increased 0.4% to a two-year high of $192 billion. Among its biggest partners, U.S. trade deficit with China declined 2.3% to $30.1 billion in May, while with the European Union it declined almost 20% to settle at $10.7 billion. However, owing to uncertainty over NAFTA renegotiation talks, trade deficit with Mexico increased 5.6% to $6.8 billion. Preside...