February 2017

Currency Monitor

GBP Strength May Be a Sign of Things to Come for the US Dollar

The US Dollar was marginally stronger this week in a very volatile environment. Counter forces were at play between strong US economic data, strong European economic data, a return of inflation almost everywhere, the passing of Donald Trump Tax overhaul and the indictment of Lieutenant General Flynn in the Russian Gate Affair.

The fact of the matter, when you sort out the conflicting forces is that the US Dollar is putting a significant bottom in place and that it is only a matter of time before interest rate differentials take over and sort out the real trends from the noise. read more

Commodity Monitor

OPEC’S Agreement Did Not Move the Markets

Oil barely budged on Friday as OPEC agreed to extend oil supply restraint until the year-end.

OPEC’s in a quagmire however, foreshadowing disappointment for oil bulls counting on the group and its allies extending output curbs by nine months, according to Goldman Sachs Group Inc.
Saudi Arabia’s proposal to prolong cuts from their current expiration on March 31 through to the end of 2018 hasn’t been easily endorsed by Russia, which provides the second-largest share of reductions.. read more

Equity Monitor

Wow ! What a Week !

WHAT A WEEK !

In the same very week, US Congress passed the biggest Overhaul to US taxation in 30 years, lowering corporate taxes from 35 % to 20 %, OPEC agreed on extending their output restraint until the end of the year, special counsellor Mueller indicted Lieutenant General Flynn in the Russiangate affair and Korea fired another intercontinental ballistic missile, demonstrating that the US territory was within range of its nuclear and ballistic programs. read more

Bonds Monitor

Watch US Bond Yields Next Week

Within a span of minutes Friday, bond traders had to put on the back burner just about everything they were focused on heading into the home stretch of 2017.

Deliberations over how many times the Federal Reserve will tighten next year, and how many Republican senators were on board with the GOP tax plan suddenly seemed irrelevant for Treasuries. read more

Currency Monitor

Dollar Bottoms out, Chinese Yuan Rallies, Australian Dollar on BUY

Despite the strong desire of hedge funds to maintain the EUR at elevated levels for their august close, the US Dollar has definitely bottomed out and is ripe for a major reversal as can be seen from the three top charts above.

Worries about a US economic slowdown have been quashed last week by the strong revision of the US GDP and it is only a matter of time before wages start rising again. The US Dollar is oversold in every respect and we got last week the first technical confirmation that a bottom is in place. read more

Equity Monitor

RAGING BULLS

US individual investors have become raging bulls.

“Friend,This is big!
Knowing when to buy a market is very important. Based on my research this market is on the verge of a huge rally and I believe this would be a perfect buying opportunity. read more

Bonds Monitor

Bond Markets : Danger Ahead

U.S. President Donald Trump has asked Congress for an initial $7.85 billion for Hurricane Harvey recovery efforts, the White House budget director said on Friday, adding that failure to raise the budget ceiling may hinder disaster relief spending. read more

Equity Monitor

COMPLACENCY HITS A TWO YEARS LOW

US Sentiment report shows the bears sank a little bit more, setting a a two-year low.
The summer rally is well advanced and the current reading of 16.2 % bears could indicate that at a correction is at hand in the US, knowing that August and September are usually the worst months of the year. read more

Currency Monitor

2017 H1 Currency Markets in Charts

The first half of 2017 was a bad semester for the US currency which fell against most currencies, by around 6 % when measured with the DXY Index. The last trading week of the semester was probably one of the worst for the US Dollar which lost 2 out of the 6 % in that week alone as traders were shifting positions or closing long US Dollars ahead of the Semester close.

The main culprits are doubts about the strength of the US recovery, positive economic surprises in Europe and more and more realization that Donald J. Trump’s economic package will probably never be implemented.

Hedge funds have now started to go long the EUR in a big way and the technical indicators on the DXY and on the CHF indeed point to further weakness of the US Dollar. read more

Commodity Monitor

H1 2017 Commodity Review in Charts

The first half fo 2017 was an eventful period for commodity traders.

OIL fell 14 % over the half year, losing back almost all the ground gained since the OPEC agreement in December. The 7 % rise of last week akin to window dressing as oil companies and traders alike are long the commodity and do not want to show too heavy losses. read more

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