The Mexican peso (MXN) is one of the conventional high-beta currencies traded on the forex market, making it extremely susceptible to changes in risk sentiment on global financial markets. When MXN inflows occur, it usually signals that investors are willing to take risks. In the last three months, USD/MXN has lost 3%, making the peso one of the best-performing...
The federal funds rate was increased by 75 basis points at the FOMC meeting in November to a range of 3.75 and 4%, as widely expected.
The press conference of Chairman Jerome Powell was more hawkish than imagined. The Fed Chair remarked that there is still work to be done in terms of rate hikes and that the peak of interest rates would be higher than previously...
To strip out the effects of the Fed we can take a look at the moves in AUD/NZD, both bolstered by risk-on sentiment. In this pair, the 25bps hike from the RBA is clearly seen as the bank underdelivering on its mandate to bring inflation back to its 2% target, a clear divergence from the RBNZ so far. The bank is due to meet on November 23rd and markets are...
Silver is in the midst of a bear market rally, up 8% in the last two weeks and 13% since the end-of-August lows.
Although silver prices are still 23% below the peak reached in March, recent price movements suggest that silver is attempting to make a trend reversal at these levels.
Slowing market pricing for Fed interest rates next year has prompted the rally...
Oil Brent continues to trade at a premium of more than $8 per barrel to WTI oil , with the price difference between the two oil benchmarks increasing significantly and well above its historical average this year.
One of the primary drivers of the widening Brent/WTI price spread has been a significant increase in the availability of North American crude, which...
China A50 index ( CN50 ), a measure of the Chinese onshore market that keeps track of 50 of the biggest Chinese A-share companies listed on the Shenzhen and Shanghai stock exchanges, broke a major upward trend that had been in place since 2016.
The technical picture sees the A50 index currently dominated by a descending channel pattern, having fallen 42% from its...
Copper prices may remain under pressure in the coming months due to investors' apprehension about China's growth prospects in the wake of the 20th National Congress of the Chinese Communist Party, which disappointed the market.
Since September, copper prices have fluctuated within a relatively narrow range (3.2-3.6) after the earlier sharp declines occurred this...
For most of 2022, currencies were helped by rising yields on short-term government bonds.
When looking at the UK bond market, rising gilt yields have reflected expectations of future interest rate hikes by the Bank of England, but ultimately they begin to incorporate more political and fiscal risks into their rate premium.
Given the turbulent political climate...
OPEC+ has taken a tough stance, slashing output by 2 million barrels per day (bpd) beginning in November 2022, the largest reduction in crude oil production since March 2020.
In addition to production extending the agreement through 2023, oil producers have agreed to hold semiannual rather than monthly meetings.
WTI oil briefly spiked to $87/bbl following the...
Gold is back above $1,700, which is where it was in the middle of September, up 5% on the week.
A drop in Treasury yields and a weaker dollar have aided gold's rise as the market speculates on the end of Fed rate hikes.
From their 4% peak in September, US 10-year Treasury yields ( US10Y ) have decreased by almost 40 basis points in the last few session, and...
The S&P 500 index may perform noticeably better than the European stock market ( STOXX 50 ) in the event that the European Union experiences a sharp economic downturn.
The S&P 500 to EURO STOXX 50 ratio, which gauges the relative strength of the US stock market in comparison to the EU stock market, has been largely flat so far in 2022.
In the past, when the...
US natural gas prices have formed a head and shoulders top pattern, which may signal a weakening of the current major bullish trend and a subsequent reversal into a bearish one.
The left shoulder coincided with the relative highs at the end of July at $9.30/MMbtu, a level that was then followed by a pullback to $7.53 (August 8) prior to the beginning of a new...
The Nasdaq 100 index ( US 100 ) has moved in the opposite direction of US real yields ( DFII10 ), which are the difference between nominal Treasury yields and market-based inflation expectations (also known as Breakeven yields). Real yields serve as a measure of the Fed's rate tightening aggressiveness.
The 30-day correlation between Nasdaq 100 and US real yields...
Recent moves in the EUR/USD exchange rate have been driven primarily by the price differential between natural gas in the United States and Europe, rather than by the ECB's historic rate hike last week.
Over the last 90 days, the correlation coefficient between EUR/USD and US-EU gas price differentials is 0.88, indicating a very strong relationship between the...
What a day for silver !
Spot silver went up more than 5% to $19.7 per troy ounce in one of the best sessions this year, hitting the highest levels since August 18.
Silver's daily price action broke through both the 50-day moving average and the 2022 bearish trend line connecting the lower highs of April and August.
Momentum indicators show the daily RSI...
The daily palladium chart shows some interesting technical developments.
On September 8, the price action saw a 4.5% daily gain, which broke both the 50-day and 200-day moving averages. Previously, the same breakouts also occurred on July 7 and 8, but in two separate sessions.
With the September 6 lows, a short-term bullish channel may have formed, supporting...
The dollar-franc pair ( USD/CHF ) is recording its third straight day of losses, and is about to form a "three black crows" pattern, which is characterized by three consecutive bearish red candlesticks with lower highs and lower lows.
A three black crows pattern typically indicates a bull trend reversal and a shift in trader sentiment. This pattern formation on ...
The AUD/CAD pair formed a head and shoulders top pattern with neckline breakdown earlier this month.
This pattern is similar to the one seen in AUD/USD but shows a bit more room to the downside towards July 2022 lows.
The RSI pointing southward and the MACD crossing the zero line indicate that some weakness could persist in the short term.
From a monetary...
