Dollar/CAD traded lower as the Canadian dollar enjoyed mostly upbeat figures. Will this continue? There are no Canadian economic releases scheduled for the holiday week, but low liquidity could result in outsized movesHere are the highlights and an updated technical analysis for USD/CAD. Canadian inflation is finally picking up. The rise of headline CPI by 0.3% m/m was accompanied by advanced on almost all the core measures. In addition, retail sales advanced more than expected. This double-feature publication sent USD/CAD lower. GDP disappointed by remaining flat m/m in October, but it did stop the loonie. In the US, the tax bill was signed...
Last week I put the finishing touches on the 2017 End of Year Special Edition of the Weekly Macro Themes report – something which is fast becoming a tradition here! The report brought together the charts that worked (as well as those that didn’t!), some honorable mentions, the ones to watch in 2018, a few fun charts at the end, and of course – the topic of this blog post – my favorite charts of 2017. These are my favorites for a few reasons, they might have been about a critical issue or may have simply been a new way of looking at something. Anyway, I hope you enjoy them, and be sure to check out the report (whi...
‘Twas the morning of Xmas and all through the markets, not a human creature was stirring…but it appears the machines took major advantage of the low liquidity... Around 730amET, it seems the algos went on a deep stop hunt, flash-crashing EURUSD by four big figures, taking out the November 7th low stops – all the way back to the lowest print since mid July. Prices then stabilized after ramping back higher. Additionally, there appears to be some dollar liquidity stress once again – specifically in Japanese markets as the forward discount for USDJPY spiked from around 0.04 yen to around 0.23 yen. As Bloomberg notes, t...
As we are approaching the end of 2017, it’s time to look back at the hot investing areas of 2017. This is especially true as this year has treated the broader market well. The S&P 500 has gained about 19%, the Nasdaq has crossed the 7000 mark and the Dow Jones hit several highs. However, some specific sectors shone even brighter in the galaxy of equities in 2017. Below we highlight those winning ones. Technology The technology sector has been on fire this year thanks to improving economic and industry fundamentals and Trump’s corporate tax reform. The rise of new technology such as cloud computing, big data, and the Internet of Thing...
GBP/CHF The British pound has rallied against the Swiss franc for the last several months, but it looks as if we are running into serious trouble at the 1.35 handle above. It coincides with the 61.8% Fibonacci retracement level of the most recent move lower, but we have now filled a significant gap so I think the next several weeks will be very important to the future direction of this pair. While the GBP/USD pair has been very interesting and at an inflection point, this pair will be the same but on steroids. If we were to break above the 1.35 level on the weekly chart, I think that is a sign that we are going to go much higher, retracing th...
Back in June, when Goldman “accidentally” triggered a mini-tech rout with a note that would ultimately end up being their most read piece of research released in 2017, most investors couldn’t seem to get past the title: That right there is the market equivalent of heresy. FANG can’t be mispriced. After all, no price is too high to pay for a slice of the future. “Just buy the damn robots” at any price. Josh Brown said so. But if you did manage to get past the inflammatory title (which, by the way, wasn’t actually inflammatory because there’s never a “bad” time to ask if you might be paying too much for something), what ...
While a rise in interest rates might diminish the attractiveness of dividend stocks, these will still be in demand on optimism surrounding the biggest tax overhaul in decades. This is because lower corporate taxes will boost companies’ profits leading to handsome dividends and in turn lead to outperformance of stocks with a history of year-over-year dividend growth. Why Dividend Growth? Stocks that have a strong history of dividend growth belong to mature companies, which are less susceptible to large swings in the market, and thus act as a hedge against economic or political uncertainty. At the same time, these offer downside protection wi...
2017.12.22 XOI.X Cycle Model Chart The XOI.X cycle model continues to suggest higher levels for the index going forward into the Spring of 2018. As can be seen from the previous iteration shown below and here on the blog, the level is increasing as predicted, suggesting perhaps a slow down of the annoying right phase shift, though there is still a large discrepancy between the predicted and actual curves. In any case, lower levels for the index are highly unlikely going forward, if the model is correct. 2017.09.22 XOI.X Cycle Model Chart...
The Australian dollar extended its gains ahead of Christmas, enjoying the greenback’s weakness and the previous week’s jobs report. Is there more in store for the holiday week? There is only one event on the agenda. Here are the highlights of the week and an updated technical analysis for AUD/USD. The Australian dollar extended the gains related to the excellent jobs report. In addition, the RBA meeting minutes were good enough to support the Aussie. In the US, the greenback “sold the fact” of the tax bill and data was mixed, with a small downgrade of GDP growth. Updates: AUD/USD daily graph with support and resistance lines on i...
When European Commission (EC) Vice President Valdis Dombrovskis announced an array of green investment proposals to encourage capital formation in green investment bonds – including lowering capital requirements regulators will allow for such investments – this intervention is viewed as a negative, according to Moody’s. While the overall goal to more closely conform with the Paris Agreement is viewed as a consistent policy statement from the European Parliament (EP) – and encourages investment in a geopolitically strategic industry — it is not a credit positive for the banks, Moody’s analyst Alberto Postigo says. skeeze / Pixab...