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Finance 0
Dollar Regains Momentum, Sterling Resists
The US dollar lost momentum yesterday but has regained it today. The euro has been pushed through last week’s lows near $1.1180. The next immediate target is $1.1145, which corresponds to the lower Bollinger Band today, though the intraday technical readings suggest some modest upticks are likely first. The $1.1200-$1.1220 area may cap upticks. The greenback held above JPY109 and bounced to recoup 38.2% of its decline since the pre-weekend high near JPY110.60. A move above this retracement (~JPY109.70) may yield minor gains and still struggle to sustain gains above JPY110. The dollar-bloc currencies have been led lower by t... -
Finance 0
Buying USD And JPY Much Better Choices Than EUR In Case Of A Brexit
In an interview with FXStreet I discussed the meaning of the Fed minutes, the impact on stock markets, what currencies to buy on a Brexit and the mysterious weakening of the Swiss franc. Here goes: Do you believe in the June rate hike chance the FOMC Minutes expressed? I remain skeptical about a June rate hike. If the data remains positive, we could see the Fed provide thick hints about a hike in July. Then, given further OK data and no Brexit, they could indeed call a press conference in July and raise rate. I see two hurdles for June: the chance of a Brexit one week later and a lack of full conviction for a June hike. Both the statement... -
Finance 0
Hedge Fund CIO Explains Why Most Missed The Oil Rally
A quick note from Eric Peters, CIO of One River Asset Management, which explains in very simply terms how as oil tumbled and its volatility soared, virtually everyone who manages large amounts of money missed the oil price rebound. “Oil is a 60 vol instrument,” said the CIO. “If you’re targeting 10 vol for your fund, how much oil could you own?” he asked. “At most you put 15% of your fund in the trade.” Meaning you had nothing else in the book. “So imagine you caught 50% of the 70% crude rally. Your absolute best case would’ve been a 7.5% gross return.” But of course, few people target 10% vol even if they say they do,... -
Finance 0
EU Bullet Report – Gold, Stocks & Oil Suffer On USD Comeback
Despite a very thin calendar, the market was relatively volatile yesterday, and in favor of the USD. Catalyst for the strength in the Dollar was the evident support from FOMC members in favor for a rate hike sooner than the market expected. On the data front, German ZEW economic sentiment will be the main focus in European session. Germany will also release GDP final. US will only release new home sales. ________________________________________ Currencies: USD has strengthened overnight after comments from FED officials supporting a possible rate hike in June or July. USDJPY traded as low as 109.10 from 110 yesterday. EURUSD has remained q... -
Finance 0
Gold Retreat Signals Rising Rate Hike Probability
After briefly crossing the $1300 per troy ounce thresholder earlier in the month, gold prices are once again on the retreat on the back of rising speculation of further policy tightening from the US Federal Reserve. Although not guaranteed, recent comments from officials combined with the Meeting Minutes from the April FOMC gathering indicate that the US Central Bank is considering raising rates in a “live” June meeting if economic data continues to support the tightening narrative. However, going forward, gold prices will be highly sensitive to changes in the US dollar as the Fed focuses on data dependency, namely employment in the comin... -
Finance 0
E Elliott Wave Analysis: AUD/USD Reaching For 0.7130
AUDUSD is at new lows. So far we have seen a nice leg down, but there is room for more weakness as wave 5 needs to be made by five sub-waves. As such, we remain short-term bearish now for 0.7130, while price is beneath 0.7230. AUDUSD, 1H... -
Finance 0
Stevens Upholds RBA’s Inflation Target
Reserve Bank Governor Glenn Stevens defended the central bank’s inflation targeting, voicing intentions of remaining vigilant against the risks of continued low interest rates. In what may be his last public speech before stepping down as the head of Australia’s central bank, Stevens said he disagreed with the view that the RBA’s code guide for monetary policy should be changed, adding that inflation was currently a “bit too low. ” “I think it’s easily the best monetary policy framework we’ve ever had,” he said of the 2-3 per cent inflation target over the medium-term. “It has worked well and I think it will keep working w... -
Finance 0
Japan’s 20-Year Cycle Takes The Global Stage For G7
This Global Week Ahead ends with a 2-day meeting of G7 leaders in Ise-Shima Japan. According to the Government of Japan’s website, G7 leaders will discuss: Global Economy & Trade (global growth) Foreign Policy (Middle East, Ukraine, and North Korea) Climate Change & Energy Development (Japan hosts the 6th annual Tokyo International Conference on African Development in August) Quality Infrastructure Investment Health (public health emergencies like Ebola) Women Aides to President Obama also set up, at least half a year ago, a visit to nearby Hiroshima, Japan. That visit happens this Friday – in advance of the offici... -
Finance 0
E China Burning Through Reserves
In light of a report that was featured on the Dow Jones newswires, I find it ironic that US presidential candidate Mr. Trump has made “currency manipulation” by China as a major component of his economic plan. According to this report, China is estimated to have $3.22 trillion in currency reserves as of April. That is down from $4 trillion in June 2014. The US Treasury department has estimated that China has sold more than $480 billion in foreign currency assets from August through March of this year. Guess where this money is going? Answer – to PROP UP the YUAN. Not debase it like Trump is claiming. Here is what has been happening ever... -
Finance 0
Moody’s Downgrades Deutsche Bank’s Debt Two Notches Above Junk
While not quite on the level of last week’s Berenberg downgrade (to Sell) which warned that DB’s problems are now “insurmountable”, shortly after the close Moody’s surprised the market with a downgrade that may have substantial repercussions on the funding costs (and perhaps viability) of the largest German, and European, lender. Shortly after the market close, the rating agency decided to pile some more pain on the misery that has befallen Germany’s largest lender (who admitted it had rigged stocks in addition to seeing yet another MBS probe unveiled against it), when it downgraded the bank’s credi...
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