Hello traders
This is a look at USD and the relationship to other asset classes.
DXY: Daily close above the weekly breakout level.
Fundamental: CPI ticked down but CME FedWatch tool still shows first rate cut only in June. PPI tomorrow may change the trajectory again. Dollar dumping might reflect international investors selling USA assets.
EUR/USD: At the upper boundary of the channel . Daily close 1.1200 below 9/25/24 high of 1.1214.
100 month MA at 1.1190
Fundamental: CPI expectation next week remains at 2.2.
ECB meeting next week with rates likely unchanged.
Eurozone spending on defense in the pipeline.
German government in place.
NZD/USD: Touched 0.5766 which was a daily high level and closed below.
Fundamental: The commodity dollar that stands to lose the most from a slow down in Chinese demand caused by the trade war. Australia too. But watch out for any statements from the Chinese government that will boost their economy. Yuan devaluation, stimulus, dumping more US T-notes...
USD 10Y yield: Daily close right at February breakdown level.
THIS is the wild card at the moment. The bond market seems to have simmered down but is the global financial system creaking at the moment?
The USD 10Y T-note had good demand this morning but it seems the market is demanding a higher premium to carry USD debt. PLUS, if the spending bill and debt limit resolution passes the Senate, it will lead to even more issuance of debt unless the American public is screwed over by losing Medicare and Social Security benefits. We'll see.
This is a very simplistic look at the incredibly complex and intertwined global financial system that, like it or not, is at the whim of the USA's current trade policies. How much reputational damage has been done to American exceptionalism and a safe have to invest in, remains to be seen.
Best of luck.
This is a look at USD and the relationship to other asset classes.
DXY: Daily close above the weekly breakout level.
Fundamental: CPI ticked down but CME FedWatch tool still shows first rate cut only in June. PPI tomorrow may change the trajectory again. Dollar dumping might reflect international investors selling USA assets.
EUR/USD: At the upper boundary of the channel . Daily close 1.1200 below 9/25/24 high of 1.1214.
100 month MA at 1.1190
Fundamental: CPI expectation next week remains at 2.2.
ECB meeting next week with rates likely unchanged.
Eurozone spending on defense in the pipeline.
German government in place.
NZD/USD: Touched 0.5766 which was a daily high level and closed below.
Fundamental: The commodity dollar that stands to lose the most from a slow down in Chinese demand caused by the trade war. Australia too. But watch out for any statements from the Chinese government that will boost their economy. Yuan devaluation, stimulus, dumping more US T-notes...
USD 10Y yield: Daily close right at February breakdown level.
THIS is the wild card at the moment. The bond market seems to have simmered down but is the global financial system creaking at the moment?
The USD 10Y T-note had good demand this morning but it seems the market is demanding a higher premium to carry USD debt. PLUS, if the spending bill and debt limit resolution passes the Senate, it will lead to even more issuance of debt unless the American public is screwed over by losing Medicare and Social Security benefits. We'll see.
This is a very simplistic look at the incredibly complex and intertwined global financial system that, like it or not, is at the whim of the USA's current trade policies. How much reputational damage has been done to American exceptionalism and a safe have to invest in, remains to be seen.
Best of luck.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.