Watch out for USD/JPY as the BOJ's commitment to continue its ultra-loose monetary policy last week weighs on the Yen, all whilst the USD is finding renewed support as markets reprice expectations about year-end rates after the RBA renewed hiking overnight. Markets are now pricing in 22 bps of cuts by December, down from 45bps last week.
USD/JPY has bounced off...
The recent gains in precious metals, most notably gold but also silver, were backed by beliefs that a slowing economy would give way to the end of rate hikes by the Fed, and even possibly a few cuts before year-end. The economic data from December backed this view, which led investors to believe that the US economy was struggling, as CPI, PPI, retail sales, and...
Since early November, when China initially hinted at lifting statewide Covid restrictions, a basket tracking assets linked to the Chinese reopening story has surged by 22%.
In the last 11 weeks, the China reopening basket, which is equally weighted with copper , Korean won , Australian dollar , and the Hang Seng index , has outperformed a global stock market...
Oil WTI failed to break over the 50-day moving average during the session on January 3, and sellers returned after the price topped $80 per barrel.
This resulted in a rapid drop to $73/bbl, making it an interesting area to assess the strength of buyers on dips once again. Remember that the US is actively purchasing crude oil at 67-72 dollars per barrel range in...
Natural gas prices (US Henry Hub) plunged 20% in the first week of 2023, dropping below pre-Russian invasion of Ukraine levels and continuing losses seen in the fourth quarter of 2023.
The sell-off was violent, mimicking a falling knife pattern, with prices sliding back to levels seen towards the end of 2021 and the RSI returning to oversold territory. aPrices...
The European Central Bank (ECB) and the Bank of England (BoE) both raised interest rates by 50 basis points at their final meetings of the year. The Eurozone's policy rate was hiked to 2.5%, the highest in fourteen years, and the UK's to 3.5%, the highest since late 2008.
In contrast to the relatively dovish BoE meeting, the ECB meeting was substantially more...
The trading session on December 13 was full of important technical signals for the S&P 500 index ( US500 ).
After the release of a lower-than-expected US CPI in November (7.1% vs. 7.3% expected and down from 7.7% in October), the SPX surged to 4,137 points; however, the price action reversed sharply following sellers' profit-taking on the good news and in...
In 2022 the diversification between stocks and bonds within a "60/40" portfolio was an ineffective strategy that yielded negative returns and, as a result, did not safeguard the investment.
The reason was that both equities and bonds plummeted in lockstep as a result of the Federal Reserve's interest rate rises, with the correlation reaching its highest level in...
The British pound has staged an impressive 18% rebound since its September's lows and is now entering a pivotal week given the upcoming Fed's (Wednesday) and BoE's (Thursday) meetings.
Even though the latest signs of economic activity are mostly better or in line with expectations, they actually show that the economy is slowing down and that a recession is...
Gold continues to hover around the 1,800-mark level, currently testing a multiple resistance zone, which includes the major 200DMA at 1,790, the 38.2% Fibonacci retracement level of the 2022 lows to highs and the December high at 1,810.
The recent gold rally has been supported by a weaker USD, therefore the US CPI and FOMC meeting next week will provide...
The recent price action in the daily natural gas price chart updated to December 5, 2022, saw prices falling rapidly and breaking below the supports of two moving averages (50dma and 200dma) and some key Fibonacci retracement levels, such as the 50% retracement of the post-Ukraine war rally to August highs.
The two moving averages earlier created a death-cross...
A very robust US labour market data released on Friday shocked equity markets, which had surged in the aftermath of Powell's speech confirming a slower pace of rises in December.
Non-farm payrolls ( NFPs ) came in at 263k, which was significantly higher than the 200k that had been anticipated, and average hourly wages rose 5.1% y/y, well above the 4.6% expected....
The German Dax index rose 25% from its lows in early October, delivering nine weeks of gains and outperforming US stock indices. The bullish price action has been rather sharp for a market that had a 27% decline from its top in the first nine months of the year.
In November 2022, the Dax saw overbought RSI for the first time in over a year and the index also...
The Japanese yen was the strongest performing currency this week, rising about 4% against the US dollar, with USD/JPY plunging below 134 to levels not seen since mid-August.
Two favourable fundamental developments have fueled the yen's strength:
a) Federal Reserve Chair Jerome Powell said that US interest rates might be hiked more slowly starting in December,...
The oil market has seen a lot of activity, with recent developments mostly easing worries about market tightness.
In China, Covid-related restrictions have been reinstalled in major cities, triggering rare protests and consequently reducing outlook for oil consumption, in striking contrast to perceived moves to reopen the economy at the beginning of November.
On...
The release of the November FOMC minutes, which were more dovish than anticipated since a large majority of Fed officials judged that a decrease in the pace of the fed funds rate increase would likely be appropriate soon, sent gold prices surging beyond $1,750/oz once again.
The early stages of the formation of a bull flag pattern can be seen on the gold 4-hour...
Finally unveiled, the UK government's Autumn Budget was conservative and cautious, in line with market expectations.
A fiscal consolidation of £55 billion has been announced, to be split evenly between more taxes and lower spending. From the next year until 2028, windfall taxes on oil and gas companies will increase from 25% to 35%, while the Energy Price...
The S&P 500 ( US 500 ) has experienced a remarkable 15% rally since its lows on October 13. This was the second bear market rally in 2022, after the US stock market officially entered a bear market in May.
If we are currently undergoing a two-month bear market rally similar to the one saw last summer, the S&P 500 index is expected to peak at about 4,050 points on...
