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Reuters

Sterling : Life beyond the shackles Last year in June, United Kingdom's majority chose to leave the European Union. This year on March 29th Prime Minister Theresa May invoked Article 50 of the Lisbon Treaty, officially stamping the process to sever ties with the bloc.This brings to end a 44-year-old relationship that always had National political parties at odds, will the UK be better off without the Union or with.Most economists hold a negative view of the Brexit.They warned the public that a Leave win could have acute but serious consequences for UK economy, an immediate increase in unemployment, inflation etc. Their predictions were wide off the mark.Although inflation increased unemployment is at a record low since 1975.This is a good indication that separation from EU would be good for the UK economy in the long run.The UK once fully segregated from the Union and the regulatory burdens of trade policy could benefit immensely by adopting their own free trade policy with major world markets. There are more than 2 million EU nationals working in the UK, a divorce would give British government control back over who it allows to live and work, hence more work opportunities for Britons.After Germany, Britain is the second biggest contributor to the EU budget, leaving EU would mean all that money would be used for the national budget.But what the UK actually stands to gain will depend on the terms of negotiating with EU.It might be possible that EU could force UK to keep contributing to EU budget if they want access to EU Single Market.There have been hints that Britain will have to pay a hefty exit fee to EU that could run into tens of billion Pounds.Whether Brexit will bring about economic gain or loss for the UK can only be speculated as of now.I am not an economist but an investor and a trader, from my standpoint the worst for GBP is over. Pound in the midst of US Civil War in 1864 reached a value of $10. After the high of $10, its value started to drop and continued the downward slope for over a century against USD. A drop that started in 1864 halted in 1985, which almost brought it down to parity with the USD at 1.0438.I believe that the low of 1985 will remain to be a historical one as I do not see that low being taken out for decades.An unprecedented event like Brexit threw Sterling in a tizzy, it dropped over 1800 pips against the USD in one day after a Leave win was confirmed. And over the next few months, it kept trading lower and stabilized after hitting a low of 1.1980 in October 2016.Now it has started to get back up and is gearing to move upwards from here.The low of October 2016 will remain a very strong support for a long time to come. Coming to the analysis I'm expecting GBPUSD to make a short-term high in last week of October or first week of November. Then a low in last week of November to the first week of December. high in the first week of January and a major low around the first week of February. Then major high around last week of February or first week of March. Highs should be higher highs unless a low is broken, and lows to be higher lows as well. As always, will update as and when changing dynamics necessitates so.
Long
by UnknownUnicorn1307339
Gold - October Outlook 2017U.S Federal Reserve hinting another possible interest rate hike in December has changed our time target for Gold. Earlier we were expecting the yellow metal to halt the uptrend in last week of September, instead, we are now looking for that High to come in late by almost two weeks. The current drop should terminate here and Gold should resume the uptrend. Going back to the Gold chart, the price hit 1357.50, just $2.50 shy of our lower-end target of $1360. We still have the same target level of $1360 to $1380.
FX_IDC:XAUUSDLong
by UnknownUnicorn1307339
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USDJPY: BOJ IN FOCUS - G20 KURODA & REUTERS ANALYST EXPECTATIONS28/29th June BOJ Meeting Expectations by 27 analysts polled by Reuters: 1. 23/27 (85%) expect easing from the BOJ. - The Median Analyst expect a 10bps cut to the headline interest rate to -0.2% and a Yen10TRN Extenstion to the BOJ's monetary base target to Yen90TRN a month (JGB and ETF Purchases). - One analyst expects easing in September, two in October and One sometime next Year. 2. Whilst the Median view is 10bps and 10trn extension, further to the right of the easing curve we observe some top investment banks expecting a more with GS forecasting a 20bps cut and an extension to the Monetary base from somewhere between Yen10-20TRN My View: 1. I am concur with those views further to the right of the easing curve - i expect BOJ to deliver 20bps and 10-20trn increase in monthly JGB/ EFT Purchases as the stagnant inflation situation (-0.4%National/ -0.5%Tokyo) requires some aggressive policy. - Reason for this thinking is that currently the Monetary base has been steady at Yen80trn for some time and the rate has been at -0.10% since January - so realistically is a 10trn increase and 10bps decrease going to be sufficient? - Lets look at the maths - a 10trn increase is 12.5% and a 10bps drop takes us to -0.2% - personally i do not think a 12.5% increase and a slight adjustment to the key rate will bring JPY underlying inflation into a uptrend - if 80trn and -10bps can't, i dont think 90trn and -20bps can - they need more e.g. 100trn and -30bps - a 25% increase in monthly monetary base + a significant decrease in the interest rate - bare in mind that the SNB has rates at -0.75% so the BOJ has a lot of room relatively to cut futher, it's not like its on the edge of economic possibility already when other central banks are already more aggressive. 2. Now whether they will deliver to the right/ aggressive side is up for question, as BOJ/ Kuroda have always been on the conservative side. Though in recent times the BOJ have come under-pressure by JPY Govt/ Abe so imo if they will ever deliver big - it will be now. - Kuroda shrugged off heli money (below) but he did communicate that there could/ should be a double effort from monetary and fiscal policy in order to increase the multiplier effect - which bodes well - we could see dramatic fiscal and monetary policy. Even if we fall short of cash dropping out of aircraft. Kuroda's comments at G20: - "Bank of Japan Governor Haruhiko Kuroda said on Saturday he would ease policy further if necessary to achieve its 2 percent inflation goal, while reiterating a commitment to continue with the current stimulus until prices are anchored there." - "If the economy's (recovery) trend continues, leading wages and prices to rise in a virtuous cycle, which is continuing, prices will eventually rise to the 2 percent price stability goal," - "We always examine risk factors for the economy and prices and will take additional easing steps if necessary to achieve the price stability goal. I'll explain that together with Japan's economy, prices and monetary policy at this meeting." - "Uncertainty will continue, including negotiations between Britain and the EU, which will take years. So we will be paying attention to such things," - "If it means that central banks are directly underwriting government bonds, or managing monetary and fiscal policies as one, that would be prohibited in Japan as well as other advanced economies, as lessons from history tell us," - "If governments utilize fiscal policy while central banks ease policy from the economic and price viewpoint, that would boost the multiplier effect on the economy. This so-called policy mix is nothing wrong as macro policy.
by QuantumLogicTrading
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