Following the footsteps of Mario Draghi, the central bank chief, the Bank of England governor, Mark Carney delivered a hawkish statement to the markets last week. In under a week, the central bank chief switched from being dovish to hawkish. Carney’s comments were made at the central banking forum in Portugal over the week, which also saw participation from other central bank chiefs including ECB president Mario Draghi, BoC governor Poloz, BoJ governor Kuroda. The comments from Carney were surprising considering that the BoE governor had just told the markets a week before that “now was not the right time to raise interest rates”. Th...
Gold edged higher on Tuesday as investors awaited Federal Reserve minutes of its June meeting. Also an intercontinental ballistic missile test by North Korea triggered some safe-haven buying that helped underpin gold. XAU/USD is currently trading at $1227.76 an ounce, higher than the opening price of $1223.54, but still not too far from seven-week lows hit on Monday. The short-term picture continues to be bearish, with the market residing below the Ichimoku clouds on both the daily and the 4-hourly charts. Negatively aligned Tenkan-Sen (nine-period moving average, red line) – Kijun-Sen (twenty six-period moving average, green line) line...
The Canadian dollar enjoyed the hawkish tone coming out of the BOC, as well as the recent rise in oil prices. What’s next? Here is their view, courtesy of eFXnews: Barclays Capital Research argues that it is unlikely for CAD to get further support from monetary policy expectations as the BoC enters the blackout period before the July 12 meeting. “We believe a sustainable inflation close to target is difficult to attain given the lack of price pressures and subdued wages. We think it is premature for the BoC to tighten and would fade market excitement,” Barclays argues. In terms of this week’s drivers, Barclays notes that oil price ...
In Europe, where it is essentially taboo to publicly discuss anything deemed politically incorrect, some interesting conversations are taking place in the Italian parliament regarding the future of Italy in the eurozone. Via email, Eurointelligence asks Is Italy heading for debt restructuring or euro exit? We are reporting from an important conference in Rome yesterday that has caught the Italian news headlines this morning – on the future of Italian public debt. It was organized by the Five Star Movement, held in the Italian chamber of deputies, and openly discussed issues such default mechanism inside the eurozone, sovereign debt restruc...
Asian stock markets are mixed today. The Shanghai Composite is up 0.28%, while the Hang Seng is up 0.24%. The Nikkei 225 is trading is lower by 0.52%. European stocks fell marginally on Tuesday amid geopolitical tensions. Meanwhile, Indian share markets have opened the day on a flat note. The BSE Sensex is trading higher by 12 points and the NSE Nifty is trading higher by 3 points. S&P BSE Mid Cap and S&P BSE Small Cap are trading up by 0.1% and 0.2% respectively. Sectoral indices opened the day on a mixed note with energy stocks and power stocks leading the gains. While FMCG stocks and information technology sto...
Whenever there is a national holiday and especially July 4th, volumes are light which can result in larger moves and higher volatility. Given that North Korea tested another missile earlier today the effect on markets was more extreme than would otherwise have been expected. The Hang Seng took the brunt of the move closing down 1.5% with large caps taking the hit. Given these concerns the safe-haven bid returned and yen, gold and fixed-income all found the bid. JPY did get to mid 113’s but in late US hours we have seen it back to sub 113. Australia saw a good rally in stocks after the RBA left rates unchanged. US Dollar index had had a reas...
Supply has dried up, if that is it, then demand has the freedom to push prices up! Two things can slow the advance: Supply overcoming demand, or no interest from demand (or as Tom Williams used to say ‘No Demand bars’). Video Length – 00:05:11...
Understanding your risk level is one of the most important parts of financial planning. Here’s why: Imagine you’re playing chess and you’re about to move your queen to a particular square. Making this specific move may put pressure on your opponent’s king, but when you look at the entire board (the big picture view), you see that you might also lose your queen in the process. Is your possible gain worth the risk of losing your most important piece? You need to evaluate the risk-reward ratio of your move… both in chess and in investing. Risk of loss vs. possible gain Generally in the finance world, the riskier the product, the grea...
AT40 = 65.0% of stocks are trading above their respective 40-day moving averages (DMAs)AT200 = 60.5% of stocks are trading above their respective 200DMAsVIX = 11.3 (volatility index)Short-term Trading Call: cautiously bullish Commentary During the big June 9th swoon in tech stocks, I was surprised to observe how well the stock market (in aggregate) performed. From Above the 40 at that time: “While the carnage in big cap tech stocks was painfully clear – the PowerShares QQQ ETF (QQQ) declined 2.5% and the Nasdaq Composite declined 1.8% – most of the remaining stock universe was blissfully unaware of the pain. My favorite technical i...
from Daily Reckoning — this post authored by James Rickard After nine years of unconventional quantitative easing (QE) policy the Federal Reserve is now setting out on a new path for quantitative tightening (QT). QE was a policy of money printing. The Fed did this by buying bonds from the big banks. The banks would then deliver bonds to the Fed, and the Fed would in turn pay them with money from thin air. QT takes a different approach. Instead, the Fed will set out policy that allows the old bonds to mature, while not buy new ones from the banks. That way the money will shrink the balance sheets ahead of any potential crisis. For years...