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Euro hits 1-month high as Silicon Valley Bank collapse weighs onThe euro has posted sharp gains at the start of the week, extending its rally against a retreating US dollar. In the North American session, EUR/USD is trading at 1.0740, up 0.95% and its highest level since February 15. Perhaps it is fitting that today's economic calendar has no US or European releases, allowing investors to focus their full attention on the fallout from the collapse of the Silicon Valley Bank (SVB). This is the largest US bank to fail since 2008 and understandably, investors are alarmed that the contagion could spread and the US banking system could be at risk. Over the weekend, New York officials closed Signature Bank, one of the main banks in the cryptocurrency sector. The US government acted decisively and said SVB depositors (but not investors) would be protected and President Biden made a television appearance to reassure a nervous public that the banking sector is safe and those responsible for the SVB collapse would be held accountable. The fact that Biden had to address the nation reflects fears that the SVB failure could trigger a full-blown banking crisis. The SVB collapse has sent the US dollar in retreat against the majors, as the market expectations of a 50-bp hike from the Fed next week have evaporated. Just last week, the markets had priced a 50-bp hike at 70% and a 25-bp increase at 30%. That has shifted to a 70% likelihood of a 25-bp increase and a 30% chance of the Fed taking a pause, with a zero chance of a 50-bp hike. Goldman Sachs had projected a 25-bp last week but now expects the Fed to pause. The US releases CPI on Tuesday and the release was expected to play a key role in the Fed rate decision, but that was before the SVB collapse triggered a massive repricing in the markets. Still, the inflation report will be widely watched by investors and by the Fed. Headline inflation is expected to fall to 6.0% in February, after a 6.4% gain in January. EUR/USD is testing resistance at 1.0718. The next resistance level is 1.0798 There is support at 1.0622 and 1.0542
by OANDA
Wandering Balloon Deflates the Rise of Chinese YuanCME: USD/RMB Futures ( CME:CNH1! ) US-China relations are arguably the most challenging bilateral relations in the 21st century. It has been in a free fall since the 2018 trade conflict. The competition has intensified and spread to investment, technology, among other arenas since then. On November 14th, 2022, President Biden met with President Xi during the G-20 summit in Bali, Indonesia. This was expected to be a turning point to stabilize the relations. Secretary of State Antony Blinken planned a follow-up trip to China, scheduled to depart on February 3rd. However, a massive balloon floating in the skies of Montana causes a diplomatic panic. The US alleges that it is a high-altitude military surveillance balloon from China, while China claims that it is a civilian airship derailed by wind, a force majeure accident. Last Friday, Secretary Blinken announces the postponement of his China trip. The next day, U.S. military shoots down the balloon over the Atlantic Ocean off South Carolina. The drama between Washington and Beijing has significant impacts over the annual $700 billion bilateral trade. Tensions could be a nightmare for tens of thousands of US companies operating in China. Today, we focus on the most prominent market risk of all, USD/CNH, the US dollar – Chinese Yuan exchange rate. The Rise and Fall of USD/CNH In FX spot and futures markets, USD/CNH is quoted as Yuan per Dollar. When the quote of USD/CNH rises, CNH depreciates because each dollar can be exchanged for more yuan. Similarly, a falling quote represents dollar depreciation which in turn is yuan appreciation. How is the USD/CNH exchange rate determined? Interest rate parity (IRP) states that the interest rate differential between two countries is equal to the differential between the forward exchange rate and the spot exchange rate. The formula for IRP is: F0=S0×((1+ ic)/(1+ib)), where: Forward Rate=Spot Rate × ((1+ Country C’s Interest Rate)/(1+ Country B’s Interest Rate) ) The 10-Year US Treasury Yield is currently quoted at 3.623%, higher than the 10-Year Chinese Government Bond Yield of 2.934%. Plug these into the IRP formula with a spot rate of 6.792, we will arrive at a forward rate of 6.837. Examining the 1-year price chart of CME CNH futures, we find that Yuan lost 10,000 points between March and October last year, from 6.3 to 7.3. The trend closely correlates with the Fed rate hikes. This is a vindication of sound economic theory. While China’s central bank exercises control over its currency, in recent years it adopted open market operations and phased out strong-armed government directives. The parallel trends diverged in November, as China ended its 3-year-long Zero-Covid policy. China’s reopening becomes the main driver of USD/CNH, which receded 6,000 points from 7.3 to 6.7 in three months. Yuan’s strengthening has been interrupted last week as the Balloon incident hits the newswire. USD/CNH lost 900 points in two days, currently quoting at 6.792. In my opinion, as the Fed tightening cycle enters the last inning, it no longer has an overarching impact over USD/CNH. Going forward, US-China bilateral relations take over. Bilateral relationship between the countries will remain unpredictable. This is a developing story. Will there be a strong retaliation, or a mulled response? Different actions could swing the Yuan exchange rate from one extreme to the other. Hedging for Currency Exposure Amid Unstable Relations US importers, exporters, and US companies operating in China all face significant risks when the exchange rate is so volatile. Some of the cost may be in one currency, while the revenue is in another. Hedging net currency exposure is key to lock in the profit. US-China trade has been very unstable in the past few years. But overall, a “decoupling” trend has already been under way. In 2017, China was the largest US trading partner. Bilateral trade accounted for 16.9% of all US foreign trade. The most recent data for the first 11 months of 2022 shows a different story now: • Canada is the No. 1 US trading partner with $733.1 billion and a 14.9% share • Mexico is the 2nd largest, with $718.3 billion (14.6%) • China is now only the 3rd largest with $639.5 billion and a 13.0% share The US has become less dependent on China in its global supply chain. This is evident by the huge growth in bilateral trades with Vietnam (+122%), Taiwan (+102%) and India (+89%) in the last five years, while China trade only managed to grow 2%. Short-term Trades May Prevail In “Year of the Rabbit: Short-tailed Trading”, I discussed my preference for short-range trading this year over longer-term holding done in the past year. Market uncertainties pose more challenges in analyzing multiple moving targets with uncharted trajectories. The Chinese currency is exactly what I am talking about. Just when you think China’s reopening would induce a secular bull run, a wandering balloon out of the blue sky deflates that hope. I would not be surprised if we have a repeat of the 2018 Trade Conflict. When the tension between the two superpowers intensifies, it could swing the market wildly. For readers who have followed my stories, once again, we could leverage the game theory and event-driven strategy in response to this unexpected market event. In the past few years, I have deployed game theory and strangle options across a number of highly volatile and uncertain market scenarios, upon US-China Trade Conflict, the Russia-Ukraine Conflict, the Fed Rate Hikes, the US Midterm elections, and the US Debt Ceiling Showdown. Most of these ideas have been published on TradingView. You will find links to these stories at the end of this report. While there isn’t an option contract available on the CNH, short-term trade on the currency futures contract may be considered. Take the balloon incident as an example: Do you think Beijing will retaliate or merely protest in words? The former could worsen the US-China relations, and in my view, push the value of the Yuan down. The latter indicates the conflict can be managed without getting out of control, which is good news for the Yuan. In summary: • Hawkish response – Yuan value Down and CNH futures price Up; • Dovish response – Yuan value Up and CNH quote Down Once you form an educated opinion on which action is more likely, consider placing a long (hawkish) or short (dovish) futures position accordingly. Then hold on for the events to unravel. If history is any guide, the market often tends to over-shoot in response to overreaction. Happy trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trade set-ups and express my market views. If you have futures in your trading portfolio, check out on CME Group data plans in TradingView that suit your trading needs www.tradingview.com
CME:CNH1!Long
by JimHuangChicago
1
Dow Jones index Trump vs BidenUsing the largest market index to show comparison of data mainly the % market gains and growth differences between these particular 2 presidents. Some people im sure would like to know where their hard earned savings went that have invested into the markets. Its simple if you follow the money trail and as it stands currently the total U.S. security assistance to Ukraine to approximately $3.8 billion in arms and equipment since Russia launched its brutal and unprovoked full-scale invasion of Ukraine on February 24 a country that is not even a part of Nato. Further immediate military assistance to Ukraine, valued at up to $150 million worth of additional arms and equipment from U.S. Department of Defense inventories. These stats are from a press statement may 6,2022 state gov website. No links cause I was reprimanded by trading view moderators previously. At the same time the fed raises rates asking for more money and not using the funds to fix our own debt issue.
TVC:DJI
by CBKWahoo
We see S&P500 is very bullish with recent tech innovations. TSMC to up Arizona investment to $40 billion with second semiconductor chip plant The investment by TSMC is one of the largest foreign investments in U.S. history, and the largest in the state of Arizona. Semiconductor chips are used in everything from computers and smartphones to cars, microwaves and health-care devices. Once the plants open, they will produce enough chips to meet the U.S. annual demand. The announcement comes in wake of the passage of the CHIPS and Science Act which was signed into law in early August. President Joe Biden is joining the founder of Taiwan Semiconductor Manufacturing Co. on Tuesday to announce the opening of the company’s second chip plant in Arizona, raising its investment in the state from $12 billion to $40 billion. The company will also announce it will be producing more technically advanced chips than originally proposed. The investment by TSMC is one of the largest foreign investments in U.S. history, and the biggest in the state of Arizona. Semiconductor chips are used in everything from computers and smartphones to cars, microwaves and health-care devices. The Covid-19 pandemic shined a bright light on U.S. dependence on Chinese manufacturers as lockdowns led to a global shortage of the high-tech chips.
CME_MINI:ES1!Long
by Incantus
Long GEO Group niche REIT - cool ticker, book valueThe cliche about prison life is that I am actually integrated into it, ruined by it, when my accommodation to it is so overwhelming that I can no longer stand or even imagine freedom, life outside prison, so that my release brings about a total psychic breakdown, or at least gives rise to a longing for the lost safety of prison life. The actual dialectic of prison life, however, is somewhat more refined. Prison in effect destroys me, attains a total hold over me, precisely when I do not fully consent to the fact that I am in prison but maintain a kind of inner distance towards it, stick to the illusion that "real life is elsewhere" and indulge all the time in daydreaming about life outside, about nice things that are waiting for me after my release or escape. I thereby get caught in the vicious cycle of fantasy, so that when, eventually, I am released, the grotesque discord between fantasy and reality breaks me down. The only true solution is therefore fully to accept the rules of prison life and then, within the universe governed by these rules, to work out a way to beat them. In short, inner distance and daydreaming about Life Elsewhere in effect enchain me to prison, whereas full acceptance of the fact that I am really there, bound by prison rules, opens up a space for true hope. if there ever was such a thing as no-brainer easy money this is it. Republican sweep up in the November Primary is what the market will begin to front-run this summer targets are potentially conservative. Real Estate and Construction costs are already massively inflated, the market has not yet revalued the enterprises like GEO Group short squeeze can happen here if the retail cohort swarms it
NYSE:GEOLong
by noam_chom
WTI: Crude oil prices are impacted by a dimming demand outlook.Despite limiting its highest daily gains in a week, WTI crude oil remains in a flat trend. US government representatives have stated that they are prepared to release 15 million barrels of oil from SPR. In contrast to repurchasing shares and paying dividends, according to Biden, oil firms should increase output and lower gasoline costs. He said, “My message to the American energy companies is this: You should not be using your profits to buy back stock or for dividends. Not now. Not while a war is raging,” Biden said. “You should be using these record-breaking profits to increase production and refining.” Since the beginning of the year, the White House has released approximately 165 million barrels of petroleum from the reserve, out of a total estimated to be over 180 million. This means the demand is diminishing. However, if price manages to trade, break and close above 86.55 the setups would be invalidated making the bulls take charge.
OANDA:WTICOUSDShort
by TradeyMarkets
2
Ice cream 🍦😱 (I scream, You scream) President Biden said the US economy “is strong as hell”. “I’m concerned about the rest of the world,” he added. “The problem is the lack of economic growth and sound policy in other countries.” Small news: -Biden disagrees with British Prime minister's FAILED attempt to 'pivot' and ease monetary policy against the stream and against inflation worries. US president Joe Biden called Liz Truss’ abandoned tax cut plan a “mistake" as he visited an ice cream shop in Portland. The criticism was unusual - US presidents are not known to slate the domestic policy decisions of one of their closest allies. “I wasn’t the only one that thought it was a mistake,” Mr Biden said to reporters at an Oregon ice cream shop. He had made an unannounced stop there to promote the candidacy of Democratic gubernatorial candidate, Tina Kotek. “I disagree with the policy, but that’s up to Great Britain.” Big News: - Forecast for US Recession Within Year Hits 100% in Blow to Biden Bloomberg Economics sees near certainty downturn will start Tightening conditions, inflation, hawkish Fed weigh on outlook - What happens when dollar gets too strong? Visitors from abroad will find the prices of goods and services in America more expensive with a stronger dollar. Business travelers and foreigners living in the US but holding on to foreign-denominated bank accounts, or who are paid incomes in their home currency, will be hurt and their cost of living increased. There are pros and cons to a stronger dollar - Stronger dollar clearly affects the buying power of US's allies.. Europe, England and Japan can not happy with their 'weaker' currencies. Especially when they need to pay ridiculously high prices for energy (paid in US Dollars off course)... Not so good Mr President. There needs to be balance and at this moment there is not. What if things get worse? Can the dollar rise even higher? Yes it can..my chart shows the price in an ascending channel with strong support at 110.7 and a resistance at 119.4 If that level breaks higher we could see even 166..and that would be a GUARANTEED disaster. Let's not forget about the geopolitics: US agenda was to cut-off ties of EU and Russia and this has happened. It's a priority for the US (some say) but not necessarily for most European nations. Especially when the 'Russian Bear' is in full action mode in Ukraine without any signs of a happy end in the near horizon. The priority of the US should be to care for their allies. Or the risk of losing the US Dollar's status as the World's exchange currency could stop being... He expects everyone else to Rate Hike but a lot of voices are calling for a slower pace, given that Ukraine war poses more dangers. Just some thoughts for Mr Biden. Ice cream or 'I scream You scream, we all Scream' ? It looks like the second at the moment. One Love, The FXPROFESSOR (PROJECTION: I see one hike coming up and then a big time break. No easing buy def slower pace hikes. Once Ukraine situation can be resolved diplomatically we can expect a good rebound but that will not be happening in the next 2-3 months...this will be a cold winter and the more the US dollar rises the worse things will become. Dollar might drop soon, this could be time)
TVC:DXYShort
by FX_Professor
16
DXY: Nearly At Trendline Resistance DXY: Nearly At Trendline Resistance This massive DXY pump might finally be coming to a short term end before an incoming correction - this sits at approx. 116.83. A shorter term rejection back to $107 is expected here where we could see a likely bounce with further downside to the lower side of the ascending macro channel at 103 region. This will be make or break for the DXY whether it gets back to its upwards trajectory or sinks back to normality and sub 107 where it has spent the vast majority of its life.
TVC:DXYShort
by Kryptochristian
2
POTS- Bullish Momentum on Biden Pardons LONGWith a news catalyst, of the pardoning of all cannabis possession federal convictions, POTS put in some wide range green candles to celebrate the increasing sediment towards federal legalization. As the 15-minute chart shows, a downtrending line was broken by price and then retested. The setup is ripe for a swing long at this time. I see the constituents of this ETF like SNDL CGC ACB TLRY IIPR as candidates for trades as well. On the other hand, They could pop and drop and so be candidates to short or take put options.
PLong
by AwesomeAvani
APPLE IS TURNING GREEN 🍏 - MARKET IS ON!!!My theory that APPLE will be the crucial chart is paying dividends. APPLE Share is on the Rise, above key resistance of 154$ My targets are 212$ and 249$ I had told everyone here: Things can get better faster than most think: I also shared with you today how Tech beats inflation (i used the Tesla chart given that Elon tweeted today): Market could be on the rise again and our Saturday morning could be something like this: Call me crazy, i don't mind, after all i'm super fine even if i would be making sense to just myself but during the 'Panic days' I posted this: If there is something about the markets is the 'correlation' with America. I have learned how to pay attention to the 'signals' Americans give. In this case it was Biden signaling the rebound and i paid attention, that's all. Empire strikes back. Negative GDP was painted Green.. Professor is Long. One Love, the FXPROFESSOR
NASDAQ:AAPLLong
by FX_Professor
1
$CRK oil hedge 2.0 👁‍🗨*This is not financial advice, so trade at your own risks* *My team digs deep and finds stocks that are expected to perform well based off multiple confluences* *Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management Recap: Our last time entering this thing was at $20 on 6/9/22! We carefully avoided taking a big hit on this trade by exiting on 6/15/22 at $17.42 per share. Today my team entered oil company Comstock $CRK again, but this time dirt cheap at $12 per share. Take profit is unknown but the set-up looks extremely bullish! OUR ENTRY: $12 STOP LOSS: $11 If you want to see more, please like and follow us @SimplyShowMeTheMoney
NYSE:CRKLong
by SimplyShowMeTheMoney
4
$RDBX unorthodox technical analysis 👁‍🗨*This is not financial advice, so trade at your own risks* *My team digs deep and finds stocks that are expected to perform well based off multiple confluences* *Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management Today my team entered Redbox Entertainment $RDBX at $10 per share. We set an automatic stop loss at $8.80 which would be a -12% loss. This play has the potential to reach at least 50% above our entry in a very short amount of time. It could also do the exact opposite. We like the chart set-up, but please listen to us when we say that this isn't a safe bet. Good luck to all! If you want to see more, please like and follow us @SimplyShowMeTheMoney
RLong
by SimplyShowMeTheMoney
5
Let's Go Briden (Brandon or Biden?) 🤠✌️Biden to the rescue : Biden could soon lift tariffs on China in bid to tackle inflation ''The Biden administration is wrapping up a mandatory review of tariffs on Chinese imports that were first imposed by former President Donald Trump, who argued that China needed to be penalized due to unfair trade practices.'' Good move that could help reverse the situation. No 'FOMO' though, we stick to our chart regardless of the situation: Support at 10530, allows us to be 'Buyers'. Under that level= more chaos For now: Optimism may return. Key points to watch out for: - Earning Reports coming up - Employment data If these 2 are good we could be up for a major recovery here. Economic data will dictate what happens next. If economy is healthy Rate Hikes might be priced in already (Feds said 3,5% will be, which really is not much) One Love, the FXPROFESSOR ps. good move there Brandon! ps2: Nasdaq up = Btc upper
NASDAQ:IXICLong
by FX_Professor
10