Rates are breaking recent up trends, $TNXGood Morning Everyone!
The 2Yr Yield is retesting the recent support level, highlighted by arrows.
The 10Yr #yield is currently breaking the recent uptrend.
The yellow box was highlighted in the last post showing the WEAKNESS. However, forgot to speak on that yesterday (see profile for more info).
They cannot lower #interestrates... But they must, at least short term.
QT is done.
Interestrates
Factors Driving Gold (XAUUSD) Prices Up Analysis: Factors Driving Gold Prices Up
Here is why we think it will go up
(FUNDAMENTAL ANALYSIS)
Weak NFP Report and Potential Fed Rate Cuts:
The recent Non-Farm Payrolls (NFP) report came in weaker than expected, signaling sluggish job growth in the United States. This unexpected weakness has raised speculation that the Federal Reserve may consider cutting interest rates to stimulate economic growth.
Impact of Weak NFP Report:
The NFP report provides insights into the health of the US economy, and a weaker-than-expected report suggests economic challenges. Which helps the fight against inflation.
Potential Fed Policy Response:
In response to disappointing economic indicators, such as the weak NFP report, the Federal Reserve may consider implementing monetary policy measures to support economic recovery. One such measure could be a reduction in interest rates to stimulate borrowing and spending, thereby bolstering economic activity.
Gold as a Safe-Haven Asset:
Gold is often viewed as a safe haven asset during times of economic uncertainty and inflation. The prospect of interest rate cuts by the Federal Reserve can further enhance gold's appeal, as lower interest rates typically diminish the opportunity cost of holding non-yielding assets like gold.
Here is what to watch out for that might stop it from going up:
Market Response and Federal Reserve Policy Decisions
Market participants should closely monitor any signals or announcements from the Federal Reserve regarding interest rate decisions, as they can significantly influence investor sentiment and, consequently, gold prices. If it becomes more likely for the Federal Reserve to not cut rates, well expect gold prices to plummet.
Economic Indicators and Geopolitical Developments:
It's important to stay attuned to key economic indicators, central bank policies, and geopolitical developments that could impact gold markets. Any shifts in these factors could alter the trajectory of gold prices.
(TECHNICAL ANALYSIS)
Trade setup explained:
Take-Profit is set at 2344 due to a strong resistance line there (see white horizontal line)
Stop-Loss is set at 2311 which is right under 2315, 2315 has been showing stronger support.
Conclusion:
The weak NFP report and the potential for Federal Reserve interest rate cuts have contributed to upward pressure on gold prices. However, market participants should remain vigilant and assess the evolving economic landscape and its impact on gold markets. By monitoring economic indicators and central bank policies, investors can make informed decisions in the dynamic world of gold trading.
Like always use proper risk-management.
Greetings,
Zila
GOLD - Trading Inside the Triangle#XAU/USD #Analysis
Description
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+ GOLD price is currently trading inside the triangle and the price has been ranging since May
+ I'm expecting the price to break downwards as the overall trend on lower timeframe is bearish.
+ We have good opportunity for a short trade here.
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VectorAlgo Trade Details
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Entry Price: 2311.453
Stop Loss: 2325.813
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Target 1: 2304.801
Target 2: 2300.000
Target 3: 2290.430
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Timeframe: 1H
Capital Risk: 1-2% of trading amount
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Enhance, Trade, Grow
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Feel free to share your thoughts and insights.
Don't forget to like and follow us for more trading ideas and discussions.
Best Regards,
VectorAlgo
BREAKOUT or FAKEOUT?? - EGHere I have EUR/GBP on the 4 Hr Chart!
Ever since its visit at the Support Zone @ ( .8534 - .8528 ), Price has been steadily making Higher Highs and Higher Lows with the most significant High in the Price Action being Friday's High reaching the Resistance Zone @ ( .8586 - .8581 ) on the release of LOWER than expected NFP numbers for USD ( 175K Actual - 238K Forecast )
Now not only did we get an enormous Bullish Break on Friday, but by market close, most of those gains were given back bringing Price back to the cycle of Highs it broke AND a Minor Support Zone.
So .. Is this a BREAKOUT or a FAKEOUT?!
I think to answer this question, it will come down to the Fundamentals as of late!
I believe EUR started to slightly overpower GBP Mar. 21st when BOE decided to HOLD their Interest Rates @ 5.25%
Then, Apr. 17th GBP gets the HOTTER than expected CPI of 3.2% with BOE Bailey making the comment that Inflation looks to have quite a STRONG DROP in May ... Followed by a very disappointing Retail Sales read of 0% on Apr. 19th ..
-COULD THIS MEAN GBP WILL BE THE NEXT UP FOR RATE CUTS?!?!-
Well on Thur. May 9th, BOE meets to take vote on whether they INCREASE, DECREASE or HOLD RATES
Also GDP Fri. May 10th ..
From a Technical standpoint, I want to watch for Price to either:
Find Solid Support at the Minor Level + Ranged Highs to continue higher
-OR-
Price to drop back down through the High/Low Range with a Bearish Break using Resistance from the Ranged Lows
-DOES THE BOE HAVE THE DATA INFRONT OF THEM TO LOWER OR HOLD RATES??-
THE KOG REPORT - FOMCThe KOG REPORT – FOMC
This is our view for FOMC, please do your own research and analysis to make an informed decision on the markets. It is not recommended you try to trade the event if you have less than 6 months trading experience and have a trusted risk strategy in place. The markets are extremely volatile, and these events can cause aggressive swings in price.
We’ve had an extremely decent week so far, together with the long that was presented to us earlier in the session today. As it stands, we’re in the 4H order region, which is why price is attempting the intra-day levels of support and resistance, while they temporarily accumulate orders. This now gives us support 2295-90, which if supported on the spike, could give the move upside into the region highlighted on the chart. It’s this level that needs to be monitored closely and if the set up allows with a clean resistance, a move downside breaking the 2300 level again could be available.
With events like this, there is usually a flip and it’s unexpected. So expect the market to spike either way collecting liquidity. We would also say, the trade usually comes after the event, so it’s best to wait for them to move the market to where they want, then look for a clean set up.
Please note, these are key levels, if broken above, we can correct the move from yesterday and end up closer to 2390 than 2255 end of the week.
Please do support us by hitting the like button, leaving a comment, and giving us a follow. We’ve been doing this for a long time now providing traders with in-depth free analysis on Gold, so your likes and comments are very much appreciated.
As always, trade safe.
KOG
#Treasury Yields are they going to over 7% !!!Interest rate bull and bear markets can run for many years before they change direction.
Currently the yield curve is the lowest it has ever been and is still declining.
The long term charts above are strongly suggesting that the bear market in interest rates ended during the pandemic crash low in 2020 after 39 years of decline.
This will have major consequences if the #Economy is unable to whether a higher cost of capital
and Gives big money managers to park their money in a risk free asset and earn #yield
treasury notes are any #bond with a less than 2 year maturation.
XAU/USD | GOLD OVER ALL PLAN ( SMART MONEY ) DECRYPTERS Welcome to DECRYPTERS !
NOTE:- PLEASE READ FULL DESCRIPTION BEFORE CONCLUDING ANY THING
UPON ANALYZING GOLD OVER ALL TRENDI IS BULLISH DUE TO SEVERAL FACTORS
1 - GEO POLITICAL SITUATION
2- BANKS DEMANDS FOR GOLD
3- INFLATION ISSUES IN US
4- JAPAN CURRENCY DEVALUING ISSUE
5 BRICS
6 -INFALTONUN CERTANITY
SMART MONEY HATES UNCENRTANITY , SO THEY ARE BUYING ALOT OF IT
OVER ALL GOLD IS BULLSIH IN YEARLY / MONTHLY /WEEKLY CHARTS ( FOR NOW)
FOR Now gold is moving in 4 H desecnding channel once it Reaches 2215 - 2225 Area we may see rejection from there . in case if its Flip the Area we may see possible up side Even new All time highs too
The down side area 2225 - 2240 we have yearly V WAP Area there as well
The projected path of that is shown in chart Even
Alot of confluences at that area as POI for trade
Thanks for reading the post and be with us till Now , Plz Press Like button if you like the post
"REGARDS DECRYPTERS"
Rates not looking to slow down, but have to be lowered, dilemma Short term #yield is higher.
Long term has turned & are catching a bid.
At the moment it doesn't look like they're going down any time soon & that is not good longer term.
Was speaking with loan officer yesterday & they believe they must lower before election. But, what if it goes higher before it goes lower?
TVC:TNX
$JPINTR - Interest Rates MoMECONOMICS:JPINTR -0.1% November/2023
The Bank of Japan (BoJ) maintained its key short-term interest rate at -0.1% and that of 10-year bond yields at around 0% in a final meeting of the year by unanimous vote, as widely expected.
The central bank also left unchanged a loose upper band of 1.0% set for the long-term government bond yield.
The board said that it will patiently continue with monetary easing amid extremely high uncertainties at home and abroad.
It also mentioned that policymakers will respond to development in economic activity and prices as well as financial conditions.
By doing so, the BoJ aims to achieve a price stability target of 2% in a sustainable manner,
accompanied by wage increases. The committee reiterated that it will not hesitate to take extra easing measures if needed.
source: Bank of Japan
Fed decision preview: Zero rate cuts and EURUSD parity in 2024? Fed decision preview: Zero rate cuts and EURUSD parity in 2024?
Expectations point to the Federal Open Market Committee maintaining interest rates at their current levels in the upcoming decision slated for May 1. However, fixed income markets suggest the possibility of rate cuts surfacing in either the July or September meetings of the FOMC.
Nonetheless, Thursday’s economic activity report ushered in another jolt for investors and Federal Reserve policymakers. They had been bracing for lower inflation to pave the way for substantial interest-rate cuts this summer.
The core price index for personal consumption expenditures in the United States, excluding food and energy, surged by an annualized 3.7% during the first quarter of 2024. This marks an acceleration from the previous three-month period's 2% increase, surpassing the estimated 3.4%.
Recent remarks by Fed Chair Jerome Powell and other policymakers have solidified the conviction that rate cuts won’t materialize in the near term. In fact, there's been discussion about the potential for further hikes if inflation fails to abate.
Given the challenging scenario, where higher interest rates don't appear to be substantially denting the economy, the question arises: What if policymakers opt to maintain current rates throughout 2024 without any cuts? With the divergence in outlook from the Fed and the ECB, can we expect parity to be reached again in the EUR/USD this year?
#FED causing Commercial Real Estate/ Banking CollapseCommercial real estate
"..talk of black swans of an economic nature forcing the Fed to print trillions again. Commercial real estate may be the next domino to fall. Back in 2008, default rates rose to 9%, up from 1%, as interest rates rose.
Today, the damage to commercial real estate loans which total about $2.7 trillion could be far greater. Over 40% of the US work force now works remotely since May 2020. The decline in demand for commercial properties has worsened by recent tech layoffs. The value of office sector REITs have fallen by about 55% which translates into a 33% reduction in the value of office buildings.
The default rate of between 10-20% in commercial real estate which was the lower end seen during the worst of 2008 would result in about $80-160 billion in additional bank losses. This would be ruinous for hundreds of smaller and midsize regional banks that have already been weakened by higher interest rates. The 2008 financial crisis spread from the housing sector to the rest of the economy as large banks with exposure to housing took tremendous losses.
Today, the Fed has created a moral hazard in guaranteeing depositors. Bank executives may take bigger risks if they believe the Fed will step in to protect depositors."
How much higher can the USDJPY go?Yen weakness despite...
BoJ Exited negative rates regime
Increasing geopolitical uncertainty
Gold at historic highs of 2430
In 2022 and 2023, when the USDJPY approached the 152 price level, open/discreet intervention was in place to strengthen the Japanese Yen.
However, in 2024, the USDJPY has now surged past the 152 resistance level, with the Japanese Yen continuing to show signs of weakness.
Could 155 be the next target price level for an intervention?
Last Leg (Update) - USDCHF Year So FarHey everyone!!
Here I talk about USDCHF and give a little update on my Trade Idea "Last Leg To The Finish Line"
Since it went over so well and continuing to follow suit, I wanted to do a Video Update on the idea to give a little insight on what I was seeing as the pair unfolded for the year and what I'm looking for in the near future!!
Please let me know what you think and thank you so much for all the Support!!
.. It all started with a little Double Bottom on the Hourly Chart
Stocks, Inflation, Unemployment, Yield Curve, and Interest RatesPeriods of high #interestrates, low #unemployment, high #inflation, and an inverted 10/2 #yieldcurve since 1976. What do you notice? An increased probability of a stock market recession and high unemployment within months of cutting interest rates and a reverted yield curve?
Goldman Sachs, the Buyback King?Goldman Sachs, one of the very few giant financial services companies left, is intending to do the first mega buyback program that will exceed One TRILLION dollars into 2025. Gasp.
So the chart shows the initial buybacks commencing and the support of its stock price during the very dicey sideways trend.
The company reports earnings Monday, April 15. Enough time to catch another swing run to earnings if the current consolidation breaks out to the upside.
NYSE:GS is a Sell Side Institution and admits it is heavily vested in NASDAQ:NVDA and other big tech stocks at this time. GS benefits from higher interest rates holding through this year.
Short term yields still weak, longer term reversedWhat a difference 11 hours makes.
The 1 & 2 Yr #Yield are STILL under resistance & are weakening.
10 & 30 Yr completely reversed once markets opened. But this tends to be normal, pretty frequent.
This is why waiting for a CLOSE is of utmost importance. IF we CLOSE here, last night's thinking is NO MORE and the best plan of action is to WAIT.
TVC:TNX
Interest Rates NOT showing cuts...Let's keep looking at #InterestRates. Gives us an idea of what the Fed may do.
The 1 & 2 Year are still under their RESISTANCE level. Struggling a bit, but not breaking down. Trend is still there, weak though.
10 Yr looks like it wants to break the resistance zone.
30 YR looks like it's gone. Does not look like it wants to retrace at the moment.
#FederalReserve TVC:TNX
ISM Indices vs. GDP YoY% - Leading Economic IndicatorsBoth ISM Manufacturing Index and Non-Manufacturing Index vs. GDP YoY% for the US economy.
ISM Manufacturing: Yellow
ISM Non-Manufacturing: Blue
GDP YoY%: Green/Red
ISM Manufacturing currently signaling contraction with a level below 50 and the momentum seems lower.
Non-Manufacturing Index is likely to follow the same path although currently signaling growth, but less than before.
GDP YoY% could potentially experience a slow-down within the next 6 Months to a Year.
The FED has being somewhat more Dovish on the latest speech, as they're seeing a negative outcome in keeping Interest Rates higher for much longer.
Rates not acting as if a cut is coming...Let's look at rates for a bit.
Short term #yield is slowly climbing the trend line.
1 & 2 Year.
Longer term #interestrates look similar to the short term.
10 & 30 Year.
US #Dollar not as strong as bond yields but it is trading similar to them.
TVC:TNX TVC:DXY
How does inflation affect the stock market?The world’s financial environment has become incredibly tangled and multifaceted. The global availability of information to investors, particularly in rural areas, thanks to the internet, has caused investor sentiment to shift from an emotional response to an analysis and data-driven one.
Inflation serves as a prime example of this. In the past, most individuals viewed inflation as an indication of an unhealthy economy.
However, in the present day, investors have become more knowledgeable about economic cycles and are capable of making sound investment decisions at each stage of a country’s economy.
Therefore, today, we will discuss inflation in general and evaluate its influence on the stock markets in India. Let’s start with a topic on How does inflation affect the stock market.
What is Inflation?
In simple words, inflation refers to the gradual increase in the prices of goods and services. As the inflation rate rises, so does the cost of living, resulting in a decrease in purchasing power.
As an example, suppose bananas were priced at Rs.100 per kilo in 2010. In an inflationary economy, the cost of bananas would have increased by 2020.
Let’s assume that the price of a Banana is now Rs.200 per kilo in 2020. Thus, in 2010, with Rs.1000, you could buy 10kg of Banana.
However, in 2020, due to the decrease in purchasing power caused by inflation, you would only be able to buy 5kg of Bananas for the same amount.
To understand inflation in detail, let’s have a look at what is the reason behind inflation. So, there are two major factors behind an increase in the rate of inflation in the economy.
1) Demand > Supply
One reason for an increase in the inflation rate is when the average income of individuals in an economy rises, and they want to purchase more goods and services.
During such times, the demand for these products and services can exceed their supply, resulting in a scarcity of these goods and services. Consequently, buyers are willing to pay more for them, which leads to a general increase in prices.
2) Increase in the cost of production
Another reason for an increase in the inflation rate is when the cost of production of goods and services increases due to an increase in the costs of raw materials, labour, taxes, etc.
While this leads to an increase in the cost of production, it also causes a decrease in the supply of these goods and services. With the demand remaining constant, the prices tend to increase.
Inflation and the Indian Stock Markets:
The price of a share in the stock markets is determined by the interplay of demand and supply, which is influenced by a variety of factors, including social, political, economic, cultural, and so on.
Anything that affects investors can have an impact on the demand and supply of stocks, and inflation is no exception. Here is a brief overview of the impact of inflation on stock markets:
1. The Purchasing Power of Investors
Inflation, by definition, is a rise in the prices of goods and services, and it is also an indicator of the diminishing value of money.
Therefore, if the inflation rate is 5%, then Rs.10, 000 today will be worth Rs.9, 500 after one year. If the inflation rate increases to 10%, then the same amount will be worth even less in the future.
So, as the inflation rate increases, the purchasing power of investors decreases. This decrease in purchasing power can directly impact the stock market since investors would be able to purchase fewer stocks for the same amount.
2. Interest Rates
When the inflation rate rises, the Reserve Bank of India ( RBI ) often increases interest rates for deposits and loans. This move is intended to encourage people to save money and limit excess liquidity, thereby reducing the inflation rate.
However, as loans become more expensive, the cost of capital for companies also increases. Consequently, the projected cash flows of companies are valued lower, which can lead to lower equity valuations.
3. Impact on Stocks
As the increase in the inflation rate, speculation about the future prices of goods and services can create a highly volatile market environment. Since prices are rising, many investors may speculate that companies will experience a drop in profitability. As a result, some investors might decide to sell their shares, leading to a drop in their market price.
However, other investors who remain optimistic about the company’s future profitability may continue to buy these stocks, which can create a volatile environment in the stock market.
Value stocks tend to perform well during times of inflation because they are often more established companies with stable earnings and a history of paying dividends, making them more attractive to investors seeking steady returns. In contrast, growth stocks are often newer companies with higher potential for future earnings, but they may not have established cash flows to support their valuations.
When inflation rises, investors may become more risk-averse and prioritize stable, predictable returns over potential growth, leading to a decline in demand for growth stocks and a corresponding drop in their market prices.
4. Long-term benefits of increasing inflation rates on stock markets
A certain level of inflation is required for an economy to grow, as it encourages spending and investment. A moderate and controlled rise in inflation rates can lead to an increase in the income of the people and help in boosting the economy.
However, if the inflation rate goes beyond a certain limit, it can have a negative impact on the economy. Therefore, it is crucial to maintain a balance between inflation and economic growth.
Conclusion:
Investors should analyse the trend of inflation rates in recent years before making any investment decisions. Sudden spikes in inflation rates may cause uncertainty and volatility in the stock markets, while a gradual and steady rise in inflation rates can provide a conducive environment for businesses to grow and expand, leading to higher stock valuations. Additionally, investors should consider investing in sectors that perform well in an inflationary environment, such as energy, commodities, and real estate.
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💻📞☎️ always do your research.
💌📫📃 If you have any questions, you can write me in the comments below, and I will answer them.
📊📌❤️And please don't forget to support this idea with your likes and comment