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Euro/Dollar Expected Fall To 1.1168/70 In First Half Of Day
Yesterday’s Trading: A fall in the oil and stock indices has facilitated a fall in the dollar/yen to 114.20 and a rise of gold to $1,200 per troy ounce. The euro has strengthened against the dollar to 1.1215. The rate rose to 1.1237 in Asia. The markets are closed for a week in China. Falling oil prices as more reserve reports are set to come out is putting pressure on the stock markets and bonds. The market is in a turbulent zone. The Nikkei 225 has fallen 5% this morning. Main news of the day (EET): 09:00, German industrial production and balance of trade for December; 11:30, UK December balance of trade, BoE’s financial stability deput... -
Finance 0
The Return Of Crisis
Suddenly banks everywhere are in deep, deep trouble. Financial markets the world over are increasingly chaotic; either retreating or plunging. Our view remains that there’s a gigantic market crash in the coming future — one that has possibly started now. Our reason for expecting a market crash is simple: Bubbles always burst. Bubbles arise when asset prices inflate above what underlying incomes can sustain. Centuries ago, the Dutch woke up one morning and discovered that tulips were simply just flowers after all. But today, the public has yet to wake up to the mathematical reality that over $200 trillion in debt and perhaps anothe... -
Finance 0
They Broke The Silver Fix (Part I)
Last Thursday, January 28, there was a flash crash on the price chart for silver. Here is a graph of the price action. The Price of Silver, Jan 28 (All times GMT) If you read more about it, you will see that there was an irregularity around the silver fix. At the time, the spot price was around $14.40. The fix was set at $13.58. This is a major deviation. Many silver bugs are up in arms about how unfair the new silver fix is. That’s nothing new. They were up in arms about the old one. The old one was supposedly manipulated. One thing is for sure, tactical manipulations can occur. A gold trader in London was found to have pushed the price... -
Finance 0
EC Why Japan Went NIRP: No More Doubts About QQE
When real household spending fell by 4.6% in April 2014 it was cause for concern. That was the first month after the tax hike hit and the decline in spending was much larger than anticipated (by economists, at least). Despite the heavy toll, Bank of Japan officials remained (outwardly) wholly unconcerned over what was believed a minor setback on the road to raging inflationary success. With so much “stimulus”, including of the fiscal kind, there was no way Japan’s economy would fail to respond. While spending had declined, “inflation” had ticked to its highest level since February 1991. Japanese consumer prices showed that inflatio... -
Finance 0
USD: History Repeats Itself So Elegantly – Deutsche Bank
The current moves in the US dollar seem to resemble a behavior in the not-so-distant past. What can we learn going forward? The team at Deutsche Bank explains: Here is their view, courtesy of eFXnews: The bullets and charts below show how history is partly repeating itself in interesting ways. Figure 1 shows the current DXY (the bar) since Sep 2014, with a line chart of the DXY between 1996 and Feb 1998. Beyond the way the charts are tracking – and one has to be wary of being too cute in finding a best fit – the really interesting aspect is that the DXY is also at almost exactly the same levels as in this period! It is rare that history... -
Finance 0
Headlines Continue To Control Market Direction As Valuation Models Languish
Headlines continue to dominate the trading landscape, perpetuating a news-driven trader’s market rather than allowing a healthier valuation-driven investor’s market to return to favor. After all, that’s what stock market investing is supposed to be about. Narrow market breadth and daily stock price gyrations have been driven primarily by three headline generators — oil price, the Fed’s monetary policy, and China growth. Sure, there were many other important news items, notably the sinister course of Islamic terrorism. But it was those three main subjects that have been the persistent drivers of the daily buffeting of investor se... -
Finance 0
Day Of Reckoning: The Collapse Of The Too Big To Fail Banks In Europe Is Here
There is so much chaos going on that I don’t even know where to start. For a very long time I have been warning my readers that a major banking collapse was coming to Europe, and now it is finally unfolding. Let’s start with Deutsche Bank. The stock of the most important bank in the “strongest economy in Europe” plunged another 8 percent on Monday, and it is now hovering just above the all-time record low that was set during the last financial crisis. Overall, the stock price is now down a staggering 36 percent since 2016 began, and Deutsche Bank credit default swaps are going parabolic. Of course my readers were alerted to major pr... -
Finance 0
Nikkei Plunges 5% As Japan 10-Year Yield Goes Negative First Time
Japan 10-Year Yield Goes Negative First Time More, more, more scream the investors. Apparently the Bank of Japan is not doing enough to kill the Yen. That’s the message today as the Nikkei plunged 5% even though yield on the Japanese 10-year government bond went negative for the first time in history. Bloomberg reports Kuroda’s Three Strikes Drive 10-Year Yield Below Zero. Japan’s benchmark 10-year yields touched a record low of minus 0.01 percent Tuesday in the wake of the Bank of Japan’s surprise decision on Jan. 29 to charge some lenders on excess reserves held at the central bank. Governor Haruhiko Kuroda drove down yields to unp... -
Finance 0
Dollar Hits Two Year Low Against Yen
The dollar fell briefly to 114.22 against the yen during Tuesday’s Asian session before bouncing back above the 115 level. The pair hit its lowest point since November 2014 in a 1.10 percent drop before its slight reversal. The pair is down significantly from only last week when it hovered around the 120 mark. The 10-year Japan government bond yield also fell below zero for the first time, hitting as low as 0.007 percent. This move has been expected by analysts since the Bank of Japan announced adoption of a negative rate policy on January 29. A stronger yen can be detrimental for Japan because it makes exports more expensive and the co... -
Finance 0
Gold Test $1200, EUR/USD Back At Pre-NFP Levels
The markets remained a bullish mode against the US Dollar yesterday with Gold testing the highs of $1200 yesterday while the USD/JPY fell to a 14-month low. EUR/USD managed to rally back to 1.12 region, the same levels where the currency was trading before the NFP. However, pullbacks are expected in the near term while the bias remains bullish for most of the currencies against the Greenback. EUR/USD Daily Analysis EUR/USD (1.12): The Euro managed to post some gains against the US Dollar yesterday with prices closing bullish back near the main resistance level of 1.13 – 1.12 region. On the 4-hour chart, the Stochastics has failed to con...
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