U.S. dollar is the loser after Fed's decision to hold rates – just think of the loss as of catapult “pull back.” A vicious observation is suddenly being noticed: on the extreme, hedge funders are warning for $1900 Gold by the end of the year and on the other hand they are telling investors that stock market will run a deeper correction than that of 2008. It is only a matter of time before both events materialize.
The sixth straight Federal Reserve decision to hold interest rates lifted most currencies worldwide, with a gauge of the dollar against 10 major peers extending declines as it heads for its first annual drop in four years. About 80 of the nearly 150 currencies Bloomberg tracks worldwide gained versus the dollar Wednesday, with only 15 recording a loss of 0.1 percent or more. The yen was the best performer among major developed peers, shrugging off moves by the Bank of Japan to tweak monetary stimulus in an attempt to stoke inflation.
The yen, which has gained after every Bank of Japan meeting since January, turned lower after Wednesday’s decision. The drop followed the BOJ’s decision to shift its focus away from a pre-set target for expanding the supply of money, and to instead seek to control yields across different maturities. Even with the drop, the yen remains the world’s best-performing major developed-market currency this year.
Janet Yellen is getting closer to raising interest rates – before US election or after – signaling that a rate hike this year is on the table. Last time, Yellen referred to increasing borrowing costs as “strengthening.”
Obama favors low interest rate, and Trump, the Republican presidential nominee, argues that the Fed has created a “false economy” by keeping borrowing costs low in order to help President Barack Obama.
Donald Trump uttered at CNBC that Fed Chair Janet Yellen is "very political" and keeping rates low to buoy the stock market through the end of President Obama’s term.
Remember Trump, the 99.99% expected President by Money Maker Management & ForexSurvivor: "As soon as interest rates go up, your stock market’s going to go way down,” while FED to breathe life into legislative reform
The poll showed the median probability of a rate rise provided by economists was about one-in-four and only 6 percent of those surveyed expected the Fed to act, with the majority expecting the Fed to wait until December.
Gold at the low! Gold at the high! Gold consolidating! Gold is rubbish! There is a great mess along with gold trading daily activity, however, the real picture is this: Long Term Rectangle which was succeeded by an uptrend - up 26 percent in the first half which had sealed a bottom when FED raised interest rates.
Between overheat in the economy if the bank waits too long and no rush, FEDs are scratching heads to solve the borrowing cost puzzle. The Long Term Rectangle lasting almost 4-month is an indication that a rally has stalled amid rate uncertainty. Add salt to the injury, trading may be muted today as China is shut for holidays.
Everybody is waiting for next week ignition, for policy announcement– the week of Fed & BOJ on the 21st of September. Then, Gold will explode!
A. Asian stocks fell to fresh six-week lows on Wednesday and the greenback stood strong against a broad swath of currencies including the Japanese yen as concerns grew about the fading impact of the world's major central banks to stimulate growth.
B. Stock markets have come under pressure as investors cut positions after large inflows in recent weeks betting on a long period of low volatility and suppressed bond yields.
C. Bond yields extended their rise, suggesting more losses for equity markets with yields on 30-year Japanese debt hitting the highest levels in six months, unnerving investors.
“BP Chief Executive Officer Bob Dudley said he sees oil prices staying around $50 a barrel for the remainder of 2016. In the long term, the company will be transitioning more toward natural gas production over oil, he said.”
What does it mean BP will move towards natural gas production over oil? Will oil long term trend goes up or head to abyss?
Sounds like head & Shoulder below triple-resistance (blue-line) in a squeezed triangle (reddish lines), and breaking the neck-line. Clear neck-line break target the aqua line.
Crude prices tumbled on Tuesday after the International Energy Agency (IEA) said slowing oil demand growth amid growing inventories and supplies could signal that the market will be oversupplied at least through the first half of 2017.
"Oil came under heavy selling after the EIA released its monthly report showing it expected the surplus in the market to persist well into 2017," Australian bank ANZ said in a note. "Weaker oil prices are likely to weigh on the sector, with investor appetite remaining weak."
Gains in crude prices could also be capped by rising crude exports from Libya after the country's National Oil Corporation (NOC) said on Tuesday it would immediately start working to resume crude exports from ports seized in recent days by forces loyal to eastern commander Khalifa Haftar.
Libyan production could be raised to 600,000 barrels per day (bpd) from about 290,000 bpd within a month, further adding to the global crude supply glut.
Therefore, Be ready for neckline break!
The four blue support-line, starting Dec 2015, which each represents a low of a month are holding steadily. Currently price market trades above the opening of the month and was resisted yesterday though by the psycho level 1.5000.
We need a close well above 1.5 or below the 4-line to hint a new trend that would last till year end.
The mood music currently playing in the bond market is eerily reminiscent of what preceded the bankruptcy of Lehman Brothers and the financial destruction that followed. Back then, few investors sounding the alarm bells until it was too late. Now, though, there's a chorus of smart investors pointing to the risks of complacency; as recently as Aug. 31, bond guru Bill Gross warned that investors were "treading on thin ice."
Despite the volatility in stocks in the form of what goes down fast will recover fast enough, FED rate rise speculation still on the low near the 22% probability.
Since Friday, market was excelled in sharp selloff, to, out-of a sudden, introduced on Monday a sharp rebound, an indication that Europe is about to open in the higher levels today.
Please email your suggestion regarding Dow Jones query to email@example.com and will print your feedback in NonySqueakNews box
The last USD up move was capped at the 104 area as we had expected and now the USD/JPY is headed lower into the week of September 19 for the BOJ and FOMC meetings. If our bottoming view is still the most likely outcome, the 101.00 level, plus or minus 50 points should hold. Clearly, this is a pretty tight call, but the USD should survive, moving up after the BOJ meeting into the first week of October. A move to the 104.50 area is expected. Do You Agree? Please email your suggestion to firstname.lastname@example.org and will print your feedback in NonySqueakNews box
On September the 8th, U.S. crude-oil stockpiles dropped the most since 1999 as tropical storm Hermine delayed the arrival of cargoes on the Gulf of Mexico coast. Inventories fell by 14.5 million barrels to 511.4 million in the period ended Sept. 2, the Energy Information Administration said on Thursday. Even with the decrease, supplies remain at the highest seasonal level in at least three decades.
NAS100 chart was launched on 25 August (see Charts box) stating that Nasdaq would either retrace or rise up with full power. The “Fresh Weekly Double TOP” was completely respected with no close above and the market retraced much more than the anticipated 100%
Low Interest Rate set by Central Bank is boiling the mud of the economic market. Companies aren’t hiring or producing at the same rate as ever anymore and instead they were transformed onto borrowing money. With the raised cash, they aren’t investing the money, but rather, companies are using the brisk bond issuance to retire old debt, pay dividends, or buyback shares on the open market. While these activities are great for shareholders, they provide very little benefit for workers and consumers. Welcome to the new economy.
Weekly close below the neckline , and the rally of 2 weeks will break apart to meet the pattern’s target of Head and Shoulders at 91.50. The scenario negates if a close in the same interval is triggered above the head. Fundamentally, “The underlying current for the dollar is that its upside is capped as markets aren’t pricing in successive rate increases yet.”
Fasten your seat belt! We are going to land at 91.50
The surprise surge in coal prices should provide an unexpected profit boost for the world’s biggest mining companies as they navigate a commodity downturn that sapped earnings.
Gains for coking coal, used with iron ore to make steel, accelerated in recent weeks and benchmark prices from top producer Australia jumped 9.5 percent on Thursday, the most since at least 2013. It is a good News For Iron Ore, thus for AUD & NZD based on quarterly basis rather than spot rates.
“The oil market isn’t yet balanced. The market has yet to start working through millions of barrels of inventories accumulated during the downturn.
Bottom of Form
While oil prices have jumped more than 10 percent since early August amid speculation that Saudi Arabia and Russia can marshal an production freeze, their actions point in a different direction. Riyadh is pumping the most crude on record, while Russian oil output climbed above 11 million barrels a day for the first time since at least 1991.
Oil prices are likely to stay around current levels “for the next two years,” said Christoph Ruehl, chief economist at the $800 billion Abu Dhabi Investment Authority. Abu Dhabi produces most the oil in the United Arab Emirates, OPEC’s fourth-ranked producer.”
- European Central Bank President Mario Draghi can’t stand in the way of a rising euro, according to Morgan Stanley.
- Iran still needs to add 380,000 barrels a day to raise current flows to the average 2011 level.
- One consequence of a victory by Donald Trump in the presidential election — were his policies to be basically translated into actions — would be a jump in interest rates.
The volatility in the market stages that there is a repetition in the wave structure of the dollar as per Summer holidays. Such repetition will let you reach new low in the parameters of the dollar index and then to trend by force and at fast towards new high during September.
There is little to suggest that a new rapprochement between Saudi Arabia & Russia, announced on Sept. 5 on the fringes of the G20 meetings, will be anything other than illusory.
Within hours the newfound understanding had already started to unravel. As Russia’s Energy Minister Alexander Novak said Moscow was talking of “joint actions aimed at stabilizing” the oil market, his counterpart from Saudi Arabia was sending out a contradictory message. Instead of signaling that a reduction in output was imminent, Khalid al-Falih told Al Arabiya TV that a freeze in production was unnecessary.
Both countries are running out of time in economic terms. Saudi’s economy is hemorrhaging cash. The foreign reserves of the Saudi Arabian Monetary Agency fell by $53 billion in the first seven months of this year and are now at their lowest level since 2012. Russia is being forced to sell state assets, including a stake in oil producer Rosneft, to cover its losses given the 50 percent-plus fall in crude prices over the last two years. In other words, cooperation makes sense – just don’t count on it materializing
The cautionary tales by the economists reference Brexit, Grexit and U.S. Budget battles have yet to avalanche the market. We are raising an eye-brow against those economists! “Forecasters often feel incentivized to pump up the probability of worst-case scenarios” says an expert in political forecasting. Unfortunately, Over time, this has some corrosive effect on trust in the expert community.
Examples: 2010 and 2012, some economists warned the Federal Reserve’s massive bond-buying program would cause hyperinflation, soaring commodity prices and a collapse of the dollar. Nothing of the sort occurred. Some economists warned the U.S. congressional budget battles in 2013, which led to sharp spending cuts known as sequestration, could throw the economy back into recession. The economy grew 2.7% that year. in 2015, economists said that if Greece rejected an international bailout, it could spark a sovereign default or a banking crisis or Greece being cast off the euro. Greece’s economy is far from a success story, but it hasn’t gone bankrupt. Its banking system has been battered and drained of deposits, but hasn’t collapsed. It remains in the euro.
So what about Brexit?
It’s now been two months since British voters on June 23 cast their ballots to exit from the European Union, and it’s becoming unclear if the recession so many feared will materialize—at least in the near term. (WSJ)
What is ForexSurvivor?
ForexSurvivor is a dynamic trading system that avoids all market noises and trades all instruments including currencies, commodities and equities. This program is neither a trend-following nor a counter-trend system but a combination of both. ForexSurvivor was created early in 2000 and after eighteen months of rigorous testing, ForexSurvivor Partners decided to start live trading, since the system was out-performing most of the existing FX benchmarks.
ForexSurvivor offers a Complete Solution to Successful Trading By
- Providing accurate signals that give positive trades
- Providing advice and recommendations to convert clients' current losing trades into winning trades
- Restoring clients’ diminished account balances to their original opening balance