WTI Crude Oil The WTI Crude Oil market broke above the $45 level during the day on Friday, testing the top of the shooting star from Thursday. The shooting star from Thursday is a very negative sign, and it is also on the 50-day exponential moving average. If we can break down below the bottom of the Thursday candle, the market should then go down to the $42.50 level. This is a market that continues to suffer from oversupply, so I think selling is the only thing you can do. Even if we can break above the top of the shooting star, I think that simply waiting for and exhaustive candle is how to go forward, and I am very bearish in this market. ...
Global growth is expected to be resilient in 2017, with advanced economies’ confidence indicators posting multi-year highs and EMEs clocking improved performances aided by higher commodity prices, notes the Bank for International Settlements. In its 87th Annual Report, the BIS report points out that the feared sharp slowdown in China didn’t materialize, thanks to timely support provided by authorities to its economy, but there remains great risks amid the ongoing Chinese debt buildup. BIS Report – Globalization comes under a protectionist threat The BIS report notes that the global economy has gathered momentum, amidst reduced unem...
I have been bearish on the Australian dollar (FXA) for quite some time now. My main driver was a reversal in fortunes for soaring iron ore prices that in turn weighed down the currency. Iron ore prices rebounded so much since hitting one-year lows last month that the raw ingredient for steel is now technically in a bull market. Iron ore has experienced a very sharp rebound in recent weeks. Source: the raw ingredient for steel is now technically in a bull market Even if iron ore pulls back and cools off a bit from here, I think this spike in buying interest looks strong enough to create a fresh bottom for prices. On that basis alone, I need ...
Gold prices settled at $1241.43 an ounce on Friday, suffering a loss of 1.25% on the week and 2.17% over the month. The precious metal’s losses were mainly driven by expectations that several major central banks around the world are getting set to increase borrowing costs as well as continued uptrend in global equity markets. The failure to breach the key resistance at $1295 also weighed on prices. The downside momentum got stronger after XAU/USD dropped below the Ichimoku clouds on the 4-hour time frame. There has been a lack of new, bullish fundamental inputs for gold recently and consequently it is struggling to make it out of the 1239-1...
Or Global Reflation As China Begins Tightening Until recently, the conventional wisdom was that China’s contribution to global reflation would be increasingly accompanied by those of the US and Europe. Yet, the realities may look grimmer than anticipated. Usually, the term ‘reflation’ is used to describe the first phase of economic recovery after a period of contraction. More recently, ‘global reflation’ has been deployed to refer to the post-crisis past decade, which has been characterized by lingering recovery from the global crisis, despite ultra-low rates and quantitative easing. During the global crisis, China accounted for muc...
After opening the day on a positive note, share markets in India continued to trade higher following the rollout of Goods and Services Tax, the country’s landmark tax reform. All sectoral indices are trading in green, with stocks in the FMCG sector & metal sector leading the gains. The BSE Sensex is trading higher by 302 points (up 0.1%) while the NSE Nifty is trading higher by 89 points (up 0.2%). The BSE Mid Cap index is trading up by 0.9% and BSE Small Cap index is trading up by 1%. Gold prices, per 10 grams, are trading at Rs 28,363 levels. Silver price, per kilogram, is trading at Rs 38,329 levels. Crude oil is ...
Companies and investors have some big decisions ahead of them as we start the second half of the year. They can be summed up in one super-critical question: “Do they believe that global reflation is finally now underway?” The arguments in favour of this analysis were given last week by European Central Bank President, Mario Draghi: “For many years after the financial crisis, economic performance was lacklustre across advanced economies. Now, the global recovery is firming and broadening…monetary policy is working to build up reflationary pressures…we can be confident that our policy is working and its full effects on inflatio...
The latest weekly investor sentiment poll on twitter showed up a couple of interesting divergences that may offer clues on the next steps for markets. As a reminder the weekly sentiment poll asks if people are bullish or bearish — for “fundamentals” or “technicals” rationale. We’ve found this distinction can draw out some very interesting responses. The first divergence is between equity and bond sentiment i.e. net bulls – which is total bulls minus total bears. Typically, all else equal, you would expect bond market and equity market sentiment to move consistently i.e. bullishness in equities v...
There are a lot of investment strategies out there, and we’ve talked about quite a few, but it occurred to me that I’ve missed a very popular one: dollar-cost averaging. This edition of Macro Mondays will discuss the basics of the dollar-cost averaging, but before you embark on any such strategies, always seek the assistance of a professional adviser. As always, be sure to check out Investopedia for more information and for all your financial definitions. What is ‘Dollar-Cost Averaging – DCA’? Dollar-cost averaging (DCA) is an investment technique of buying a fixed dollar amount of a particular investment on ...
The week ahead will see a fresh set of economic data for the month of June. The economic releases coming out this week include the manufacturing PMI data from China, the UK, US, and the eurozone. Later in the week, the FOMC meeting minutes are due followed by Friday’s non-farm payrolls report. Also this week, the RBA will be holding its monthly monetary policy meeting. Here’s a quick recap of this week’s forex events to watch for. ISM Manufacturing PMI, FOMC Meeting, Nonfarm payrolls A busy week for the US dollar, data starts off on Monday with the Institute of Supply Management’s manufacturing PMI. The manufacturing PMI has been stea...