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Statistics from the USA, earnings season, jobless claimsYesterday, we finally saw the first statistics from the United States besides jobless claims, which can shed light on the state of things in the US economy. Retail sales decreased by 8.7% (the forecast was -8%), which was the strongest drop in the entire history of observations (since 1992). Industrial production fell by 5.4% (forecast - a decrease of 4%), which was a record drop since 1946. Overall, data are very weak and worse than forecasts, but they are still far from a complete failure. The reason for this on the surface - half of March was not at the lockdown. So the real scale of what happened will show data for April. More indicative in this regard, in our opinion, is the New York Empire Manufacturing Manufacturing Activity Index, whose values for April were 2 times worse than forecast: -78.2 points with a forecast of -35.0. The first US companies send additional signals about the problems in the economy as part of the earnings season for the first quarter. According to the data from JP Morgan, the worst fears are confirmed: profits collapsed by 69% (!). And this despite the fact that the reporting period included data for January and February, when no one could even think about a lockdown in the USA. That is, in reality, everything is much worse. The results for other banks are not much better: Wells Fargo's net profit for the quarter literally collapsed by 89%, while CitiGroup's profit fell by 46%. In this light, we cannot but recall our recommendations to sell in the US stock market. And, of course, today we will monitor data on jobless claims. Another 5-6 million unemployed may sow panic among the optimists and supporters of the soon happy end. Bank of Canada expectedly left the rate unchanged. But the Canadian dollar was under heavy pressure. Germany extended the lockdown for another two weeks. But India is going to partially unlock the country: not because everything suddenly became good there, but rather, because the Government is simply not able to somehow compensate for the economic blow from the lockdown for the poorest part of the population. In this light, we draw attention to the feasibility of selling the Indian rupee in the foreign exchange market. The International Energy Agency (IEA) gave another reason for the downward pressure in the oil market. According to IEA the free capacity in oil storage facilities is running out, which can increase the imbalance in the oil market, as well as a logistical collapse. At the same time, the Agency noted that according to the results of 2020, demand in the oil market may decline by a record 9%. Recall that we consider WTI $ 20 prices as an opportunity for medium-term purchases. The current gap in supply and demand is compensated by the United States and China, which are actively buying oil in their strategic reserves. In addition, China, India, South Korea and the United States are proposing to use the free capacities of their strategic reserves for the temporary storage of excess oil.
FOREXCOM:NAS100Short
by Trade24Fx
1
China and statistics vs IMF and Goldman: positive vs negativeInvestors are definitely yearning for risk and buys; as a result their perception of reality has become one-sided positive. And they have reasons for that. Let's go over the main positive news. The statistics on the epidemic both in the world as a whole and in the USA in particular, and especially in Europe, generate more and more optimism: the number of new cases and confirmed deaths continues to decline. This suggests that the worst is over. Accordingly, the issues of unlocking economies and returning to normal functioning are becoming more and more active on the agenda. Trump states that he has the authority to open the economy. Plus a number of US governors have agreed on common efforts to reopen. Currently no specific dates have been given yet. Quite the contrary, the UK plans to extend the lockdown (do not forget about our recommendation to buy EURGBP ), and France has already extended it until May 11. Another reason for optimism was data from China. In March, Chinese exports (in dollars) fell by 6.6%, while imports - by 0.9%. Analysts expected a decrease of 15% and 8%, respectively. So we can say that in the current situation the data are simply excellent. China is signaling to the rest of the world that it is possible to get off with a slight fright. Still, we do not consider the example of China to be very revealing and directly applicable to other countries, primarily the Eurozone and the United States. Just look at the statistics for the epidemic to understand how strong the difference is in the situations. In order to return to the ground, we suggest to explore the latest IMF report on the current situation in the world and prospects for 2020. According to IMF forecasts, as a result of a pandemic, the global economy will sharply decline by 3% in 2020, which is much worse than during the financial crisis of 2008-2009. The IMF expects that by the end of 2020, the GDP of developed countries will decline by 6.1%, and that of developing ones by 1%. Some of the most frightening quotes from the report: “the world economy has been hit hard since the 1930s,” “most countries will be thrown back even after recovery.” And some more cold showers from Goldman Sachs analysts. According to their calculations, in the second quarter of this year, developed economies on average will shrink by 35% (!)compared with the first quarter. This is 4 (!) times more than the previous record set in 2008 during the global financial crisis. That is why we do not share the optimism prevailing in the financial markets, and continue to recommend sales in the stock markets. We draw attention to simply excellent prices to sell the Russian ruble , the strengthening of which in the light of the last OPEC + agreement and current oil prices seems more than premature and even abnormal.
FOREXCOM:NAS100Short
by Trade24Fx
2
Quiet start of the week, IMF, earnings season and Fed pessimismThe start of the week because of the weekend in Europe turned out to be rather quite. There were no explosions of volatility and big movements in the oil market. There was silence in the foreign exchange market too. In general, it was unusually calm in the informational background as well. Today is interesting for publishing forecasts from the IMF concerning the prospects for the global economy. Judging by the latest statements from the head of the IMF and her comparisons of the current situation with the Great Depression, there is no need to wait for positive. In this light, an interview with the head of the Federal Reserve Bank of Minneapolis Neil Kashkarshi looks like a logical continuation of the IMF estimates. The Fed official noted that one can’t count on a V-form scenario (there will be no any instant economic recovery). He believes that the road out of the current situation will be long and hard, and in general it will be possible to talk about something positive only when a vaccine or effective treatment will be invented. Without this, you should not even think about the fact that the economy can return to pre-crisis levels. So stock market sales and gold purchases remain relevant trading ideas against this background, despite the fact that bulls on the stock market completely justify their name, showing just the same bullish stubbornness in ignoring the economy and continuing to pumping up stock indices. In the United States, the earnings season is starting today. This week, mainly banks report, but then other companies will catch up. By and large, the crisis will only indirectly hook the current reporting season. The main problems will come in the next quarter. Nevertheless, expect something good and positive is not worth it. This time, analysts can do little to help, because the spread in their estimates is at the level of record highs. In any case, it will almost certainly be a reason to be nervous, rather than sigh of relief. This means the reason rather for sales in the stock market, then for purchases. Given how attractive current prices are for this (+ 25% of the lows of the end of March), we will once again recall the excellent trading opportunity - sell in the US stock market. The epidemiological situation in Europe, meanwhile, is improving, with some exceptions for example, in the UK the number of deaths exceeded 11K. Although Boris Johnson was discharged from the intensive care unit, we still recommend to buy EURGBP this week and in the nearest future. In the USA, meanwhile, there is a debate about what to do with the lockdown: to soften and save the economy, hoping that there will be no worse epidemiological plan. Or continue tough measures and thus keep the epidemic under conditional control. By and large, there are no good ways out of the situation on the table now. But in general, May should be the month when the current status quo will be violated to one degree or another. So much more interesting ahead.
FOREXCOM:NAS100Short
by Trade24Fx
1
Week in a glance: pandemic, OPEC ++, jobless claims and moreTraditionally, the week turned out to be extremely eventful and interesting: the pandemic did not subside, despite hopes, damage to the economy grew, governments and the Central Banks announced new programs to support the economy, a super-cartel was formed in the oil market - in general, it wasn’t boring. OPEC, first transformed in OPEC +, now become (or not) OPEC ++. We have already noted that this is not a very ordinary event, since it can radically change the oil market once and for all. OPEC ++ controls almost the entire oil market, which means that the latter is completely controlled by producers who, by and large, are interested in high prices. So our medium-term purchases of oil began to sparkle with new colors. The main current results for now are as follows. OPEC+ is ready to cut 10 million bpd for two months (from May to July), then the reduction will be 8 million bpd by the end of 2020, and then it will be 6 million bpd in 2021. Other countries that are not members of OPEC + (USA, Canada, Norway, etc.) agreed (or not) to reduce production by another 5 million bpd. According to some sources, the United States agrees to reduce production by 2-3 million bpd, Canada by another 1 million. But again, a lot of information is now "in words". For example, 1 million production cuts in Canada were announced by Russian Energy Minister Novak, but the Canadian Minister did not confirm this. The stumbling block was Mexico, which did not want to reduce production by 400K per day, but the United States seemed to persuade the Mexicans, promising help on its part in the form of a reduction in production by 250K b / d. Plus, the United States announced that it is opening strategic reserves with the goal of actively filling them to eliminate surplus from the oil market. In general, this, of course, looks like some kind of happy ending, although it is obvious that all this is a very temporary and looks like a house of cards that will crumble at any time. There are more questions than answers to the agreement, starting with the trivial type of how the US and Canada will limit production, if mainly private companies conduct production there, ending with issues of controlling production in Russia. But here and now for the oil market it is like a breath of fresh air. Among the other events of the week, we note another failure in the US labor market: the loss of almost 17 million jobs in 3 weeks (10% of all employed in the country) is something that not a single analyst in the world could predict six months ago. Now this is a part of reality. And far from the fact that this is a peak. By no means, analysts now expect unemployment at 20% (forecasts by JP Morgan), so we are monitoring jobless claims this week and are waiting for another failure (the influx of people who want to register their status does not dry up, and registration authorities simply cannot cope). Against the background of this information, the Fed also responded to the measures already announced that it would provide an additional $ 2.3 trillion in loans to small businesses and municipalities, as well as support the market for high-yield corporate bonds. The EU also did not sit doing nothing. After two days of intense negotiations, the countries agreed to allocate 500 billion to help the economy of the Union. The Bank of England went all in and just decided to turn on the printing press. Desperate times require desperate measures. For the pound it is a very alarming signal. The coming week after over saturated previous ones seems to be a week of respite. Of global events on the horizon, perhaps, is the publication of China's GDP for the first quarter on Friday. As for our positions for the current week, the EURGBP purchase will be our favorite position of the week - the pair looks very attractive and promising, especially against the background of news about Eurozone help and the depth of economic problems in the UK, and the prices themselves are quite interesting for buying. We are returning to the idea of buying oil not only in the medium term (this position has long been relevant for us), but also intraday. In addition, gold purchases against the background of all the madness that is happening in the financial markets continue to look extremely attractive, even though our first medium-term mark of 1700 has already been achieved. Sales in the stock market, despite all the money injections that are carried out by Governments and Central Banks, remain an idea-fix for us: how can one buy stock indices of a country when its GDP is expected to fall by 30-40%? Intraday dollar sells have not lost their attractiveness for us, so during this week we will continue to sell dollar against major peers. As can be seen, there are many interesting and promising positions in the markets, so there is an interesting and productive week ahead.
Long
by Trade24Fx
2
OPEC ++, crash of US labor market and Good Friday aheadThe main events of the week came yesterday, it is not surprising that the afternoon was exceptionally eventful. We will analyze the events in chronological order. The statistics on jobless claims in the United States again came out worse than expected (6.6 million with a forecast of 5.25 million) and in general shows an extremely sad picture: in just 3 weeks, the number of unemployed in the United States grew by almost 17 million. With this speed, if quarantine lasts a couple of months, there will be little left of the US economy. So PIMCO, with its forecast of a 30% fall in US GDP in the second quarter, may be in the ranks of optimists rather than pessimists. It is not surprising that the Fed decided, in addition to the measures already announced, to provide an additional $ 2.3 trillion in loans to small businesses and municipalities, as well as support the market for high-yield corporate bonds. Our basic positions do not change: we sell the dollar and stock markets, we buy gold. Although, of course, such large-scale injections of money provide serious support to the stock market, which again breaks away from reality. The OPEC + meeting used to be transformed into OPEC ++, since the United States, Norway and Canada were to join the already familiar list of countries. The event for the oil market is more than revolutionary, because it puts an end to the market pricing of oil, making the market controlled by the main producers of black gold. OPEC + countries agreed to reduce oil production by 10 million barrels per day for 2 months (markets expected a three-month duration). Russia agreed to reduce production by 2 million bpd, and Saudi Arabia by 4 million bpd. There are no details for other countries yet. In addition, it is expected that today at the G-20 meeting they can agree on an additional 5 million bpd. (possibly referring to the United States, as well as Norway and Canada). In general, the news is positive for our medium-term positions for the purchase of oil, so now you can sleep more calmly without worrying about their bright future. Overall, everything is developing according to the most unpleasant scenario so far: the shutdown of most of the world economy does not pass without a trace and the longer the pandemic lasts, the less chance there is to get off with a light fright and recover relatively quickly. According to OECD estimates, every additional month of quarantine subtracts a couple of percent from the growth of world GDP. There was one more important news yesterday: the Bank of England will temporarily turn on a printing press to cover additional government spending that will be required to mitigate the damage to the country's economy. We do not want to buy a pound after such news at all. So maybe it's time to move on to EURGBP purchases. Today is a day off in most countries. So the markets will be extremely “thin”.
Long
by Trade24Fx
6
Someone in the markets is wrong, we need more trillionsStock markets yesterday stormed new local peaks. The latest data from Spain and Italy show that, apparently, the peak of the epidemic in the countries has been passed: the number of new infections and deaths shows a steady downward trend. China in turn shows 0 (zero) new cases of infections. And April 7 is the end date of the lockdown in Wuhan. As the result markets decide the worst is behind and ahead of us the brightest and most beautiful future. It is somewhat strange that in this general fun markets quickly forgot that the largest economy in the world so far is only approaching the peak of the epidemic with unobvious consequences both for the country as a whole and for its economy. Everyone somehow ignored the news that Japan (the third largest economy in the world) introduced a state of emergency in a number of prefectures, including Tokyo (an interesting fact is that Tokyo’s economy is 11th in the world in size, and not among cities, but among countries (! )). For some reason, everyone forgot about that the US labor market has turned into deppest depression only during a couple of weeks. Here is quote from the former head of the Fed, Jannette Yellen: “the economy is in a“ completely shocking ”recession, which is not yet reflected in current data. If it were, the unemployment rate would probably reach 13%, while the overall economic downturn would be about 30%. ” Experts all as one (Morgan Stanley, Goldman Sachs, Bank of America, etc.) talk about a 30+% drop in US GDP in the second quarter, but US stock indices are up 10% in just a couple of days. At the same time gold adds 50-60 dollars a day, closely approaching to 1700. Obviously, someone on the market is wrong. We are trying to be unbiased. Perhaps we are mistaken. But so far, the facts, statistics and experts show that the stock markets are more likely to be mistaken. That is why, despite the fact that we continue to go against the market, we recommend to sell in the stock markets. The main thing is not to forget about stop-losses. Meanwhile, confirming our words that the problems have not yet been resolved, Japan accepts $ 1 trillion (!) of assistance to the economy. Plus, information has arrived that the US wants to allocate an additional trillion dollars to help the economy. If everything is so good and great - why do they do that? And a few words about the oil market. Russia confirmed participation in the OPEC+ meeting on Thursday. But the main attention is now focused on the United States - whether they will participate in the agreement. This condition was proclaimed by Saudi Arabia and Russia. So far, Trump noted that no one asked him to participate in the meeting and, in general, market mechanisms themselves will solve the situation. That is, US manufacturers without external intervention will reduce production due to low prices. Well, the intrigue is twisting. But for now, without full clarity, we will continue to sell oil within the day until Thursday.
FOREXCOM:NAS100Short
by Trade24Fx
4
The state of emergency in Japan as a signal of premature optimiDespite the fact that the general epidemiological situation in the world is still extremely unfavorable, some “hot heads” in the financial markets have again started to show impatience and predict end of “lockdowns” around the world in the nearest future. As a result, stock indices crawled up even against the backdrop of absolutely failed statistics from the US labor market. Moreover, the figures for the number of confirmed cases of infection of almost 1.4 million and deaths over 75K did not stop the most impatient buyers. At the same time Japan could declare a state of emergency in the country. And the point is not that the number of cases has reached a critical point (the current 4K against the background of other countries looks like a model of well-being), but that the Government feels a real threat of losing control over the situation. Japan announced a new program to stimulate the economy and compensate the negative effects of coronavirus. In general, the news is bad enough for the world. The worst is still not behind (especially for the economy) and it’s still too early to relax. So we consider the growth of the stock markets to be an excellent opportunity for sales at a higher prices. No more. And the dynamics of gold yesterday in general confirms this: a re-test of 1700 looks more and more inevitable. Today we will continue to sell the dollar, despite all its reluctance to fall. First of all, we will do this in a pair of USDJPY, as well as in EURUSD. We will not touch the pound yet - hospitalization of the Boris Johnson is not the best reason for buying the country's currency. Optimism in the oil market also faded somewhat. After it became clear that the new OPEC + without the participation of the United States may not take place, and the United States is not eager to limit its own production, oil stopped its growth yesterday, and on the whole, Monday opened with a solid gap down. Frankly, we have serious doubts about the success of the meeting on Thursday, and even more so in achieving the announced reduction volumes of 10 million b / d. Accordingly, this week we expect an increase in downward pressure in the oil market and we will sell oil until Thursday and its results. At the same time, the basic medium-term purchase positions continue to remain relevant, and we use the possible decline in oil to the region of $ 20 (WTI brand) to restore purchases from $ 20.
Short
by Trade24Fx
Week in a glance: oil growth and the fall of the US labor marketTraditionally for the current crisis times, the last week made a number of records. Moreover, the records were quite diverse. We start, of course, with the maximum one-day increase in the oil market history. It was recorded on Thursday after Trump announced in a tweet the resurrection of OPEC + with production cuts from 10 to 15 million b/d. Saudi Arabia on the same day announced the emergency meeting of OPEC and countries not included in the cartel, but participating in OPEC +. As the result during only two days oil grew by 45%. Recall that at the start of last week, we actively recommended and bought ourselves oil near $20 (WTI brand). However, optimism was somewhat cooled by the skirmish between Russia and Saudi Arabia over whoever initiated the OPEC + breakup. As a result, the meeting was postponed from Monday to Thursday. And later, both Russia and Saudi Arabia, mentioned that without the USA a new OPEC + is impossible. In general, there will be another interesting week in the oil market. Another historical event last week was the fall of the US labor market into the abyss. It all started on Thursday, when jobless claims showed an unrealistic 6.6 million (as a result, in two weeks the ranks of the unemployed in the USA replenished by 10 million (!), Which was never in the history of the States), and continued on Friday, when the NFP fell through the abyss, showing -701K with a forecast of -100K. By the way on the eve of the NFP, we predicted failure by -500K-600K. As the record can be considered the reaction of the dollar to the NFP data. Or rather its complete absence. The foreign exchange market really fell into a stupor. But this is even somewhat good. The lack of reaction today does not mean that it will not be tomorrow. Therefore, this week, we will sell with renewed energy in the US stock market, as well as sell the dollar on the entire spectrum of the foreign exchange market, primarily against the Japanese yen. And, of course, we will buy gold. In any case, a re-test of 1700 should take place sooner or later. Some of the medium-term purchases of oil (those that were over $20) we closed on Friday, but the remaining positions are in the game. The OPEC+ meeting, will almost certainly provoke strong movements in the oil market. So we want to be ready, if possible, to add to purchases, but below current prices, if, of course, such an opportunity appears. The medium-term relevance of oil purchases has not been lost, but, on the contrary, sharply added following the results of the past week. So if it seems to someone that it’s too late to enter the position, we recommend to reconsider this position - the potential for oil growth is far from exhausted.
Long
by Trade24Fx
2
The next revolution in the oil market, dollar is in dangerThe main event of yesterday was another revolution in the oil market. More precisely, Trump's verbal intervention announcing it. It is about the tweet of the President of the United States where he noted that he is awaiting the announcement of an agreement between Russia and Saudi Arabia on the reduction of oil production. The size of reduction is not 2-3 million b / d, but about 10 million or even 15 million (!). This is without a doubt a historical event and the strongest signal in favor of rising oil prices. Actually, yesterday’s + 25%-30% is direct evidence in favor of this. And although there is no official confirmation yet, Saudi Arabia is already gathering an emergency meeting of OPEC +. Also China decided to massively redeem oil for filling to capacity of strategic reserves, while it is so cheap. We should note that at the start of the week we bought WTI at $ 20 and recommended our readers to do the same. So congratulations to those who follow our advice. + 30% per day on one transaction without leverage - the result itself is outstanding, if not unique. Yesterday there was another strong blow from the US initial jobless claims data. If last week the number of initial jobless claims reached a record 3.3 million and this seemed like a complete failure, then yesterday's 6.6 million (!) in general, seems to be a transition to some kind of new economic reality. This reality is extremely negative and toxic for the dollar and the US stock market, especially in anticipation of today's publication of official statistics on the US labor market. Analysts expect a decrease in NFP by 100K. This figure in itself looks extremely depressing, but as it seems to us, -100K can be very favorable figure for the US. If in the labor market in just two weeks of March managed to generate 10 million unemployed, then the scale of the decrease in the NFP can be several times (!) bigger than predicted. We, for example, will not be surprised with the NFP figure in in the range (-500K) - (- 600K). But the markets will almost certainly be surprised. This will be a shock for the dollar, which is likely to be sold, as well as for the US stock market, which will also be subjected to strong downward pressure. The only thing that can save the dollar is the fact that the NFP data for March do not include the last 2 weeks of March. But this doesn’t change anything, since it only postpones the sentence, without changing its essence. Based on our expectations, we will not even wait for the publication of the data, but start to sell the dollar just here and now. First of all, against the Japanese yen. We will also actively buy gold (negative data are likely to scare already frightened investors).
Short
by Trade24Fx
1
Welcome to the real world, Mr. TrumpWe wrote yesterday that the optimism in the financial markets at the start of the week is very premature and this will end with another round of decline in the stock markets. Actually, this is what happened. The reason for the decline was Trump's acceptance of reality, which he so stubbornly denies. In his last speech, the US President admitted that the main problems are yet to come, and against the backdrop of predictions that up to 240K Americans will not be able to survive the epidemic, this looks like an extremely depressing fact for financial markets. Moreover, the situation in the world continues to deteriorate. Judging by the current dynamics, tomorrow (if not today) the number of cases may well exceed the mark of 1 million, which in itself looks very frightening. So we continue to sell everywhere in the stock markets, hide in safe haven assets (we buy gold and the Japanese yen) and prepare for the bad NFP data and the subsequent sale of the dollar. It should be noted that the wave of economic negativity has not yet clearly covered the United States. In fact, everything in US began to reach more or less serious levels only two weeks ago. Yesterday's statistics on the labor market from ADP showed a decrease of only 27K, but this is definitely positive for the US and the dollar, in light of how much the indicator could sag (analysts, by the way, expected a decrease of 150K). The PMI and ISM indices went below 50, which is a statement of a decrease in economic activity, but again, this data is far from disastrous. So the dollar can be satisfied with the data. However, this is good for those who want to sell it on the eve of official statistics on US labor market. And a few words about our medium-term position (buy oil). Yesterday was the day the OPEC + agreement expired. Typically, oil quotes did not fall to $15 and below, as many analysts predict now. Yes, the size of the drop in demand is scary, but do not forget that oil has already received its share of suffering in the form of a 60% drop in oil prices over the past few months. But the future sharp drop in oil production (according to various estimates, may exceed 5 million bpd) is still not taken into account in the price. Which in itself seems to be a local injustice to the asset. So we continue to believe in the prospective growth of oil, understanding, however, a general negative fundamental background nowadays.
FX:USOILLong
by Trade24Fx
3
WHO, China and the United States give causes for optimism This week's news background is struggling to get the most out of the sad situation that the world has found itself in (over 850K cases worldwide and the picture is only getting worse). We are talking about the desire of the United States to increase the already unprecedented amount of assistance to the economy. The White House and the Democrats are preparing for a new package of measures if the peak of the epidemic does not pass in the coming weeks. And Trump, in turn, called for another $ 2 trillion for infrastructure projects to support the labor market. The World Health Organization has done its part to increase optimism, saying the peak of the pandemic in Italy and Spain seems to have passed. Another reason for moderate optimism gave China. The PMI index in March rose sharply from 29.6 to 52.3 (with a forecast of 37.8). What does this mean especially in light of the information that Wuhan will be unlocked next week? China gives a clear signal that tough measures against the epidemic can minimize the damage to the economy from a pandemic by limiting it to period of 1-2 months. But the rest of the world is not China. This is evidenced even by the fact that China now occupies only 4th place in the pandemic race. So it’s too early to relax. Analysts so far only worsen their own forecasts. A week ago, Goldman Sachs expected a decrease in US GDP in the second quarter by 24%, but yesterday the forecast was lowered to 34%. Plus unemployment is expected at around 15%. So we are still considering the growth in the stock markets at the start of the week as a great opportunity for sales. The only thing to note is that we recommend to protect each sale with relatively small stops - it is better to take a stop, take a break and go again than go against the will of the market (an attack of optimism can be quite sharp). Amid such news, gold suffered losses. But again, for now, this is just a reason for cheaper purchases — nothing more. The oil market also experienced some relief. Trump’s call to Putin raised the hopes that the oil price war could end soon. Quotes slightly moved away from the lows. Actually, everything is going according to our medium-term plan, despite all the news that the price of Russian oil has reached its lowest level in the last 20-plus years, Goldman Sachs expects a decrease in global demand by 26 million barrels bpd, while IHS Markit believes that the price oil in April will collapse to $ 10 per barrel, which will provoke a reduction in world production by 10 million bpd.
FOREXCOM:XAUUSDLong
by Trade24Fx
Oil hits 18-year lows (time to buy), Fitch presses on the poundThe start of the week was surprisingly calm. Honestly, looking at the figures for the number of confirmed coronavirus cases in the United States (exceeded 160K) and Trump's return to reality (he decided to abandon the idea of full economic activity within two weeks), we expected a return to sales on the stock market and increased pressure on the dollar. But this entire negative was absorbed but the oil. WTI prices reached the minimum values for the last 18 years. The current market sentiment in the complete absence of positive news continues to remain on the side of bears. In general, what is happening is logical: the economic crisis inevitably provokes a fall in commodity markets. But the case of oil, in our opinion, is quite unique. The fact is that oil collapsed before it became clear that we were dealing with a global economic crisis. This refers to its epic drop of 30% following the OPEC+ gap. That is, oil has exhausted its reasonable potential for reducing in advance. Now oil has to fall below reasonable limits due to general pressure on commodity markets. Our medium-term trading position for oil yesterday was finally formed. We added to the already opened purchases the last long position opened near $20. Recall that the motivation for this trade is that current prices are already below the average costs in the market, which means that oil is doomed to rise in perspective. It may take months, but ultimately, the price of oil should return to its fair value. Let’s get back to the other news. Fitch rating agency downgraded the UK sovereign debt rating from AA to AA-, justifying this by a sharp increase in the country's debt, as well as uncertainty with trade negotiations with the EU. Our position on the pound is twofold. In the medium term, in our opinion, his chances of growth are good. But here and now (this week) we are likely to sell the pound against the dollar, at least until the GBPUSD is below 1.25. Dooms day clock is ticking out. According to most experts, if there will be no turning point for the better in the next few weeks, the world will almost certainly plunge into a deep global recession with all the sad consequences. In this regard, we recall our recommendation to buy gold. The goal of the current movement has not yet been achieved (we are talking about a re-test of 1700), so this week the growth of asset prices, in our opinion, should continue.
Short
by Trade24Fx
Week in a glance: not a day without records, our positionsEach new week is trying to be even more eventful than the previous one. And so far, in general, it turns out. At least judging by the last week. The week began with optimism caused by the approval by the Senate of record aid from the US government. Its size exceeds $ 2 trillion, which is unprecedented cases in the history of mankind, and not just the US. In this light, the growth of US stock indices is generally justified and logical, especially if we recall the Fed's zero rates and an essentially unlimited program of quantitative easing. Here, we have another record: the growth of US stock indices on Tuesday became the biggest since 1933. According to experts, the Government and the Central Bank in total are ready to pour in US economy up to $ 6 trillion ($ 2 trillion + $ 4 trillion). The main problem with the current growth of US stock indices is that it is only temporary. Last week will be remembered by another records, but this time with a “-” sign. For example, the United States has become the world leader in the spread of the epidemic. It takes only 2 weeks. Given the pace of the epidemic in the United States, its economy runs the risk of massive damage. Actually, analysts are already talking about it: at Goldman Sachs expect a drop of 24%, and Morgan Stanley - by 30%. The President of the Federal Reserve Bank of St. Louis, James Bullard, expects a fall in GDP by 50% (!) with unemployment at 30%. Weekly data on initial jobless claims in the United States confirmed the most pessimistic forecasts. The indicator grew by almost 3.3 million (!). This is an absolute record for the entire history of observation, which is also almost 5 times higher than the previous anti-record. So the worst for the US economy is yet to come. This means that the stock market is doomed to a further fall. That is why current growth is just a great opportunity for sales. The next candidate for sales is the US dollar. The largest economic loss in history is not a reason for the growth of its national currency. The dynamics of the dollar last week confirmed this. But the most interesting thing is that the dollar has just begun to move away from the maximum levels, so sales from current prices look like a fairly promising deal. Therefore, we sell the dollar. First of all, against the Japanese yen, in order to further participate in the purchase of an asset-refuge (we are talking about the Japanese yen). Considering that panic in the financial markets, despite all the measures of governments, remains at the highest levels since the global financial crisis, gold purchases remain another promising idea. Actually last week the asset showed what it is capable of. In just a couple of days, gold rose by more than $ 100. Again, this growth is not yet complete. The re-test 1700 seems to be the inevitable and only logical scenario. But even this peak is most likely not limited to. The further goal is 1800, and there already before 2000 it will be at hand. So we buy gold, there have been no more ideal conditions for its growth for many decades (if at all there have been 100 in recent years). Another interesting result of the week was the formation of the bottom in the oil market. Despite all the negativity that prevails in commodity markets, oil has clearly exhausted its downward potential. This is logical, current prices are already either lower (USA) or at (Russia) cost price. Vivid evidence in favor of this was the maximum decrease in the number of active oil installations in the United States over the past 35 years (hello another record). That is, current oil prices are indeed below cost. The curtailment of production will lead to a drop in supply in the oil market, which in turn will provoke an increase in oil prices in the future. So there’s basically nowhere to drop oil. This means that oil remains a fairly promising medium-term position in itself and will serve as a hedge for sales in the stock market. OPEC+ is going to end this week. But what if: “The king is dead, long live the king”.
FOREXCOM:XAUUSDLong
by Trade24Fx
Invisible war and the worst forecasts come trueOn the one hand, it’s nice when your forecasts come true (we mean our recommendations to sell the dollar this week), on the other hand, you can’t be happy with the reasons that ensured the implementation of the forecasts. The epidemiological situation in the United States continues to deteriorate rapidly. New York risks becoming a ghost town. In just 7 days, 18,000 cases of coronavirus were diagnosed in the city. On Wednesday, the number of calls to 911 rescue service reached historic highs, which had previously been recorded on September 11. Data on initial jobless claims justified the forecasts of pessimists: an increase of almost 3.3 million. This is a complete failure even against the background of growth forecasts of 1-1.6 million. In general, everything is bad. And trillions of dollars can’t change this fact. So today we will continue to sell the dollar. The growth of the pound by 700 points over the current week against this background seems quite logical and we expected it when no one wanted to buy it at 1.16. The decision of the Bank of England to leave the rate unchanged did not surprise anyone or scare anyone. By and large, everything that the Central Bank wanted to do, it did at an extraordinary meeting. But let’s get back to the problems of the world economy.It not know such a tough and swift landing not during the global financial crisis, not during the oil embargo of 1973, and not during the Great Depression. Even the Second World War did not inflict such a strong and sudden blow on the global supply chain (the largest port in the world - Shanghai - in February reduced the volume of activity by 20%, and the volume of imports to the USA from China in the first two weeks of March decreased by 45% ( !) - this has never been happened before). In fact, the global economy is now in a position as if there is a world war. With one exception, there is no war. So the growth of US stock indices is an opportunity for sales and nothing more. By the way, a good opportunity, given the scale of growth from local lows. And finally, recall our recommendation to sell the euro against the Japanese yen. The details of the new program of quantitative easing from the ECB were announced yesterday (we are talking about 750 billion euros) - in fact, the Central Bank can buy any number of bonds from anyone.
Short
by Trade24Fx
2 trillion reasons to calm down and 3 million reasons to worryThe main event of yesterday was the approval by the US Senate of an emergency $ 2 trillion emergency plan. The plan provides $ 1,200 direct payments to low-income Americans, $ 500 billion will be provided in the form of loan guarantees, $ 350 billion will be used to help small businesses. Against the background of this information, the markets perked up a bit. But for now, we see no reason for global repositioning. The pandemic is in full swing, the damage from it is measured in tens of percent of GDP, so we will use any increase in stock indices for selling shares. After all, things are bad. New York is becoming the center of an epidemic in the United States and is under siege. California (a quarter of the US economy) may remain in the lockdown for another 8-12 weeks. India is quarantined for three weeks. Great Britain closes Parliament. So repositioning is still very premature. In addition, today markets will face one more challenge: US jobless claims. A number of experts voice fantastic 3 million initial jobless claims (the average figure recently has been 220K). Recall that the most significant jumps in the indicator were about 8 years ago during the hurricane Sandy. But even then the number was less than 281K (this value was recorded last week). That is, 3 million claims against this background look as terrible and scary as possible. So dollar sales are still relevant today. Recall that the Fed is ready to make an unlimited injection of dollars, which is a threat to the dollar # 1. In the oil market, meanwhile, there is an active undercover fight. Nothing is known about its actual results. But, in our opinion, a telephone conversation between US Secretary of State Mike Pompeo and Crown Prince of Saudi Arabia Mohammed bin Salman is very revealing. The Trump administration is clearly trying to persuade Saudi Arabia to abandon the plan to dramatically increase oil supply as part of a price war with Russia
Short
by Trade24Fx
2
Pandemic in progress, Wuhan is waiting, but Trump can't wait The pandemic is in full swing and there are no positive trends around the world. The epicenter remains in Europe. And if yesterday we talked about possible losses of the US economy, today we will give a couple of figures for Europe. According to Goldman Sachs analysts, Italy’s GDP will drop by 11.6% in 2020, Spain - by 9.7%, Germany - by 8.9%, and France - 7.5%. In general, the Eurozone will lose about 9% of GDP. In this light, we recall our recommendation to sell the euro. But not against the dollar, we recommend to sell it against the British pound and the Japanese yen, that is, we sell EURGBP and EURJPY pairs. This recommendation is confirmed by the March indexes of business activity from the Eurozone, Germany and France. All of them came out significantly worse than already pessimistic forecasts. For example, the composite Eurozone PMI for March was at 31.4 (!) mark with a forecast of 38.8 and a February reading of 51.6 (!). However, the leadership of the Eurozone in the pandemic race is disputed by the United States. We already wrote that by the end of the week, the States may well catch up with Europe, especially if Trump realizes his promise to open the US as soon as possible. That is why we do not recommend selling the euro against the dollar, because we consider dollar sales themselves to be a good trading idea in the light of everything that is happening now in the world and the USA in particular. We sell primarily against the Japanese yen. Do not forget to buy gold on the falls. But there is some optimistic information as well. We mean the news that the capital of the Chinese province of Hubei Wuhan will be open on April 8. That is, China gives us a specific time marks for the duration of the epidemic. Of course 3 Chinese months may well be equal to six months in Italy or the United States, which have not even reached the peak of the epidemic. But you can still begin to prepare for the fact that soon the worst will be behind. In this light, let us recall our medium-term oil deal (buy oil). Yes, here and now there are no actual reasons for purchases, but if you act in advance, then you can act just right now. However, at the rumor level, there is information that the United States and Saudi Arabia can create a new alliance in the oil market and agree on coordinated actions. In addition, US oil companies are trying to gain support from the Government to ensure survival in the current environment. Speaking of support, the amount of assistance to the economy from the US authorities can reach $2 trillion. As a result, yesterday for some time optimism gets back to the US stock market. But it's too early to talk about purchases. On the contrary, we use these growth attempts for sales.
Short
by Trade24Fx
2
Fed is breaking bad, analysts spread panicThe main news yesterday was the Fed's announcement of a number of programs to support the economy and financial markets. We will not list them all, because the main thing is not even that. The key thing is the fact that for the first time there are no restrictions on the amount. This support is not for $100 billion, or $1 trillion. This is conditionally infinite amount. That is, the printing press is turned on full and whatever happens. Judging by the reaction of the stock market, investors took this news quite restrained. This means that the market sentiment is still bearish, so we will use any rise in stock prices as a reason for sales. We believe that the short-term effect of such actions by the Fed will probably be positive for economy, but in the future these are very dangerous steps. The United States in the coronovirus race has already broken into third place and at such a pace country can finish this week if not in first, then in second place. In addition, analysts compete whose forecast for the US economy in the second quarter will be worse. Goldman Sachs, for example, expects a drop of 24%, and Morgan Stanley - by 30% in US GDP for the 2-nd quarter. But the most scary was the President of the Federal Reserve Bank of St. Louis, James Bullard, who expects a fall in GDP of 50% (!) With a simultaneous increase in unemployment to 30%. As the result we recommend to sell the dollar (first of all against Japanese yen), as well as to buy gold. Italy, meanwhile, tightened quarantine measures even more, which led to an almost complete halt of industrial production in the country. In this light, we remind about our recommendation to sell EURGBP. Although it is worth noting that the decision of Germany to provide assistance to the economy in the amount of 750 billion euros may well have a positive effect on the euro. But in this regard, it is better to buy the euro against the dollar. Of our other positions, we keep on recommend medium-term oil purchases. Motivation: the current force majeure for the oil market, in our opinion, has created a rather unique, but temporary situation. Unique because of the scale of the price drop due to the simultaneous negative impact of a drop in demand (the coronavirus epidemic and the economic consequences of it) and a sharp increase in supply (the actions of Saudi Arabia). But both of these factors are temporary. China has shown that the epidemic (at least its active phase) is rather limited in time and even provided guidance on the duration of the extreme phase - a couple of months. The position of Saudi Arabia is more like an exponential gesture, the purpose of which is obvious - to increase the level of Russia's compliance. With all the bravado, not one of the key oil producers is satisfied with prices near $ 20, which means that there will be an agreement sooner or later. We also note that so far, in fact, production has not been increased significantly. According to Reuters, Saudi Arabian exports totaled 7.3 million barrels per day in March, not 10 million barrels threatened by the Saudis. Thus, it is only a matter of time before the drivers of lower oil prices converge on oil and change their direction of impact from south to north.
FOREXCOM:XAUUSDLong
by Trade24Fx
Are we on course for another bitcoin panic?As we all know, investors are panicking, which is driving SPX and OIL to see insanely low prices. Those panics are not exclusive to the main markets, I believe that crypto will follow soon. Bitcoin remains around 5k, and it might for another couple of days before I believe we will see another major panic sell. We are definitely in a bearish market right now and it would not make much sense for bitcoin to be bullish. I would advise you to trade with lower amounts of money and use leverage wisely as these times are really uncertain and markets can either dump or rally at any day, we can only try to assume the future but we will not be able to predict, for that reason, I will ask everyone to remain reactive to the markets and if you have a position open please continue monitoring the major indicators and reading the news, as anything can happen now.
BITFINEX:BTCUSD
by tonite
6
ECB promises almost trillion, Trump wants even moreChaos and anarchy are still there in the financial markets. Although even in this chaos, elements of order can be found and money can be made from them. Our yesterday's recommendation to sell EURGBP evidences in this favor. After madness on Wednesday, yesterday everything began to return to their places and more than compensate previous losses. The reason for the sale of the euro on all fronts was the results of an emergency meeting of the ECB. European Central Bank decided to provide a new program of asset repurchase of € 750 billion. Trying to keep up with the Europeans Trump offered a $ 1 trillion aid package. The Bank of England looked good even against this background with its rate cut to 0.1% and the expansion of the quantitative easing program to $ 750 billion. As a result, pound volatility was extremely high on Wednesday. What else unites Europe and the USA? The simultaneous closure of factories, which has become the largest since World War II. So for those who think that the worst is over, we have bad news. The Swiss National Bank (SNB), meanwhile, shows what needs to be done in order to prevent an excessive strengthening of the national currency: instead of the usual rate cuts or quantitative easing programs, he resorted to good old currency interventions. Why SNB experience is interesting here and now? We have already noted that the dollar has strengthened too much. This is bad for the US economy especially right now. The Fed rate cut to 0% did not work. Flooding the repo market with money does not help. Actually, only currency interventions remained as the options to stop the growth of the dollar. Meanwhile, the number of cases in the United States doubled yesterday (!), And this is an excellent reason for panic. We mean that we are preparing for a dollar reversal and are beginning to slowly sell it primarily against the Japanese yen. Sells in the US stock market are still our best trading idea of the year. Of the other promising positions that we expect to shoot in the foreseeable future, oil purchases continue to be.
Short
by Trade24Fx
2
Dollar dominates, governments act, RAs downgradeThe dollar continues to dominate in the FOREX. The secret of his success is simple - the increased demand for U.S. Treasury bonds during the crisis, high liquidity of the dollar, as well as the relatively good situation in the U.S. economy, coupled with measures to support it and the current epidemiological situation in the country comparing with the other problem currencies (Euro, pound, commodity currencies). Anyway, the Dollar Index has reached its highest level since 2017 and, on the whole, looks rather overbought. That is, with his purchases one should be careful and more selective. The optimal trading tactics for today, in our opinion, is active trading based on the signals from oscillators. Moreover, we recommend using not the classic RSI or Stochastic, but our author's Ranger, since now it is critical to understand where specific pair can go in terms of absolute price values. So today in the FOREX we will both buy and sell. The pandemic, meanwhile, continues, and problems in the global economy continue to grow like a snowball. And this week the worst is beginning to happen - rating agencies have started to downgrade ratings. This is extremely alarming, because after the blowing up of the stock market bubble (from which greedy investors will mostly suffer. Which will be exclusively their own problems in some way even deserved), the corporate debt market bubble will begin to collapse. This topic is much more serious and potentially more destructive for the global economy. The word default can become very typical in the news. In general, there is no reason to take a breath. This means that purchases of gold and other safe haven assets continue to be relevant, as well as sales in global stock markets. It should be noted that in the fight against the crisis the Central Bank, have already largely spoken their words and now it is the turn of governments. That is, we are moving from monetary measures to fiscal stimulus. The White House is preparing to help the US economy for $ 850 billion. France prepared a package of measures for $ 335 billion, Germany for $ 500, etc. As for our favorite positions for today, this is without a doubt the sell of EURGBP. We will talk about the motivation for this deal in a separate report, which we will publish today later.
FOREXCOM:XAUUSDLong
by Trade24Fx
Crazy week behind but it's too early to relaxLast week showed as clearly as possible how bad things are now: the crisis is not just a word, but a reflection of sad reality. The Fear Index has reached highs unseen since 2008. Once again: so high it rose only at the peak (!) of the global financial crisis 2007-2009. Is this not the best illustration of how bad everything is? Italy went into complete lockdown, and other countries followed it, albeit in a milder form. For the Italian economy, this is, if not the end, then a very strong blow. This is the third largest economy in the Eurozone by the way. Today China has already confirmed alarming fears - the economy suffered a severe blow: industrial production in February fell by 13.5%, and retail sales by 20.5%. As the result everyone suddenly remembered about the safe haven assets again. So there is nothing surprising in the fact that the ECB has expanded the program of quantitative easing, and the German government promises emergency economic assistance ( more than $500 billion). To understand how much is it lets compare with GDP: this is about 15% of the country's GDP. Measures of this magnitude were not even during the crisis of 2007-09. The Bank of England at an extraordinary meeting lowered the rate. The Fed expects rate cuts to almost 0% this week. In general, we are now in the midst of a crisis. And it is not the fact that the worst is over. A pandemic is developing exponentially. Each new day of the epidemic increases the amount of economic impact. So the upcoming week could be another test. Moreover, on Wednesday the Fed will announce its decision on the parameters of monetary policy. On Thursday, the Bank of Japan will say its word. In addition, there will be quite a lot of macroeconomic statistics. How to trade in such conditions? For beginners, we would recommend just watching from the side. Otherwise, everything can end extremely sad. For those who are ready to compete with the markets, we recommend expanding the boundaries of the concept of “impossible” as far as possible in terms of the size of daily price fluctuations. Given how dynamic everything is, you can try to trade based on the signals of oscillators - intraday prices constantly rebound by more than serious values. As for the general directions, given how bad everything is now in Italy and Europe as a whole, we will sell the euro. Moreover, this week we will not do this in pair with the dollar, which itself may be under attack if the Fed takes extraordinary measures, but against the yen and the pound, that is, we will sell EURJPY and EURGBP pairs. Intraday you can sell oil, but at the same time, we note that in the medium term we have already bought oil (WTI) at $ 30. This is part of a big “buy” plan that involves adding at $ 25 and $ 20 to a super-position. In addition, this week we will buy gold. It generates great entry points and it’s a sin not to use them. The only thing for positions in gold is the tactics of multiple trades based on small stops. That is, we put small stop-losses on long positions, if they are executed, we wait for a while and restore buy when the movement calms down. Standing against the gold market in the current conditions may be suicidal, but jumps after stops will allow you to control what is happening. And the overall prospects of the position will ultimately allow to beat off all the stops and be in the plus after all.
Short
by Trade24Fx