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Gold Prices Lower On Shifting Policy Outlook- FOMC Minutes, NFP On Tap
Fundamental Forecast for Gold: Neutral Gold prices look to close at the monthly lows- nearing critical support into the July open Gold prices were down this week with the precious metal off by 0.98% to trade at 1243 ahead of the New York close on Friday. The losses come alongside weakness in broader equity markets with all three major US indices flat / lower on the week. However, with concerns over a broader shift in the tone of global central bankers and growing doubts regarding the future of fiscal policy, gold is caught between a rock and hard place with the technical outlook also highlighting a near-term consolidation range. Rhetoric ... -
Finance 0
Oh Give Me A Home, In A Market With Thorns
Cactus Wrens have no fear. They are big and bold. They perch and nest in cacti. They announce their presence strutting and fanning their feathers. This nestling sits in its cactus nest, clearly feeling right at home. Nature provides an apropos metaphor for the market. The Market An environment that prefers to strut and fan. An environment that gives birth to thorny controversy after thorny controversy. An environment that thrives in thorns. Last week, we carefully watched the Modern Family for clues to the market’s next direction. With July’s kick-off, will the Modern Family impersonate the cactus wren and thrive among the thorns? Th... -
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European Stocks 2017
The key success factor for investors is to spot trends as they arise as opposed to following trends that have run their course (typically when the majority of investors and financial media start paying attention). Right now, there is one place where a new trend is arising: Europe. This is an important time for European markets. InvestingHaven’s research team wrote yesterday that German interest rates started a major trend reversal. That categorizes under “breaking news” even if hardly anyone talks about it. The key thing about this is that interest rates play a major role in markets. Once interest rates start trending it is of utmost... -
Finance 0
Normalization Ideas Weigh On Greenback
A virus has spread across the markets as the first half drew to a close. Many investors have become giddy. The low vol environment was punctuated by ideas that peak in monetary accommodation is past and that the gradual process of normalization is beginning. Some investors may be exaggerating how soon the Bank of England and the European Central Bank will raise interest rates, but there seems to be little doubt about the direction of policy going forward. It is not just the ECB and BOE. The Bank of Canada meets on July 12, and the market is pricing in around a 75% chance of a hike. The Reserve Bank of Australia and Sweden’s Rik... -
Finance 0
Banks Begin To Mutiny Against The Fed: “If We Are Right, Central Banks Will Be Wrong”
It has been a trying time for the world’s central bankers, who for decades have been used to the “high finance” community’s adulation, derived from the deliverance of policy wrapped in so much opacity, gibberish and contradictions, that neither the central bankers, nor the markets, had any idea what was going on (see the Greenspan tenure), or dared to admit it was all meaningless drivel, resulting in phases during which the market was on “autopilot” and culminating with a bubble and subsequent crash, “rescued” by an even greater asset bubble and even greater crash, etc. However, after generation... -
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This Could End With “Large Retail Investor Outflows From Bond ETFs”
If you are a credit investor, you should be worried right about now. For one thing, you could be a hermit whose only connection to the outside world is a chart of IG and HY credit spreads that updates daily and still know it’s time to take some off the table. The spread compression off last year’s deflationary doldrums is mammoth. So there’s that. But let’s say you’re not a hermit and you have some conception of what’s happening in terms of central banks looking to roll back accommodative policy. Well, in that case, you’re probably aware that central banks are keeping a lid on spreads both indirectly (by maintaining the general... -
Finance 0
Emerging Markets: What Changed Last Week
Chinese President Xi visited Hong Kong for the first time. The US has proposed $1.3 bln of arms sales to Taiwan. The Egyptian government raised fuel and cooking gas prices. significantly as part of the IMF program. South Africa’s parliament has scheduled the no confidence vote on President Zuma. Brazil’s central bank lowered its inflation target. Brazil after President Temer was charged with corruption. In the EM equity space as measured by MSCI, Brazil (+2.9%), Russia (+1.5%), and Turkey (+0.9%) have outperformed this week, while Czech Republic (-3.0%), Hungary (-1.2%), and Chile (-0.9%) have underperformed. To put this in better context... -
Finance 0
Yuan Looks To Caixin PMI, Xi’s Trip For Further Strength
Fundamental Forecast for CNH: Bullish Yuan Gains on Chinese Premier Li’s Talk; Eyes Resistance ahead of PMI Australian Dollar Stays Firm After China Mfg PMI Beat The Yuan had its largest weekly gain against its U.S. counterpart since January, amid the Dollar weakness this week. A better-than-expected official manufacturing PMI print sent the USD/CNH dipping 6.7570, the strongest level for the Yuan in three weeks and a key support for the Yuan (50-line of a pa rallel converges on January 2016 high). Looking forward, the Caixin manufacturing PMI print for June will be a key indicator to watch. Also, attention will be on China’s President... -
Finance 0
Draghi Did Not Expect THIS Market Reaction
The markets weren’t really expecting ECB president Mario Draghi to announce or say anything ‘shocking’ last week, but it’s now starting to look like Mr Draghi and Mr Carney, the President of the Bank of England (the Central Bank in Great Britain) have had several discussions in the past few days and weeks to make sure they’d spread the same message. Mario Draghi caught his audience by surprise after telling them during the ECB’s annual forum ‘deflationary forces have been replaced by reflationary ones. As Morningstar correctly analyzed, this immediately resulted in the Euro gaining a lot of ground versus the US Dollar, reachin...
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