For oil and the markets, Russia is all the rage. There is the big OPEC/non-OPEC pow-wow in Russia and reports that Special Prosecutor Robert Mueller is opening an investigation into President Donald Trump’s business transactions with Russia one day after the President said that that would be a red-line for him. Of course Robert Mueller had no choice. If there is someone who has the job to look for a loaded gun and you tell him not to look for it in the closet, that’s going to be the first place he will look. The report of the widening of the Russia probe did move markets. The dollar took it as a negative, falling to lows. That hel...
The dollar weakened further early Friday morning with no end to the spiral in sight after European Central Bank President Mario Draghi making comments on Thursday afternoon that sent the common currency to near two-year highs against the greenback.The dollar is now 10 percent down against the euro since the start of 2017. The dollar’s recent downtrend was aggravated further last week when Federal Reserve Chair Janet Yellen expressed her concern about the low inflation rate.The dollar weakened further after Donald Trump Jr. admitted to having ties to the Russian government.The failure of President Trump to pass both his healthcare reform bil...
– Canada Consumer Price Index (CPI) to Slow for Second Month in June. – Core Inflation to Hold Steady at Annualized 1.3% for Six Consecutive Months. – Retail Crowd Remain Stubbornly Net-Long USD/CAD Since June 7, When It Traded Near 1.3481. Trading the News: Canada Consumer Price Index (CPI) Another slowdown in Canada’s Consumer Price Index (CPI) may tame the sharp depreciation in USD/CAD as it encourages the Bank of Canada (BoC) to adopt a more gradually path in normalizing monetary policy. Why Is This Event Important: Signs of softer-than-expected inflation may push the BoC to the sidelines as ‘very strong growt...
Week 28 of 2017 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors slowing continues. Analyst Opinion of the Rail Data We review this data set to understand the economy. If coal and grain are removed from the analysis, rail over the last 6 months been declining around 5% – but this week it grew 0.6 % (meaning that the predicitive economic elements grew year-over-year). Also consider total rail movements are below 2015 levels – even though they are above 2016 levels. This week the one year rolling ave...
Yesterday, trading on the euro/dollar pair closed up. By the end of the day, the euro had appreciated by 115 pips against the dollar, reaching 1.1630. The rate had dropped to 1.1479 before Mario Draghi’s press conference. The European Central Bank decided to maintain rates at their current levels. The base rate remains at zero, the marginal rate at 0.25% and the deposit rate at -0.4%. The ECB also reiterated that their assets purchasing program would be maintained at 60bn EUR a month at least until December this year. There was an increase in market volatility during Draghi’s speech. His comments were neutral, but they nevertheless trigge...
“The most important lesson from the 1930s, as well as from the modern-day Japanese experience, is that monetary policy provides no answer for a chronic deficiency of aggregate demand. Addressing it is a task primarily for fiscal authorities. The idea that central banks should consider making a new promise to raise their inflation targets is hardly credible.” (Stephen S. Roach, Project Syndicate, Another Lesson from Japan, June 26, 2017) Many years ago, John Maynard Keynes concluded that when an economy is in a deflationary phase, monetary policy becomes virtually incapable of stimulating an economy out of a low growth trap. This scenario ...
The euro’s surge to an almost two-year high put a cap on the global market rally in Friday’s quiet session, with most major exchanges consolidating after a second strong week of gains. The MSCI Asia-Pacific index declined for first time in ten days while the European Stoxx 600 index was fractionally in the green as were US equity futures ahead of earnings reports from General Electric, Honeywell, Schlumberger and others. Oil gained with Brent flirting with $50, zinc rallied along with most base metals. European stocks are little changed, while Asian stocks decline with Tokyo shares falling for first time in three days. Also overni...
Oil price got rejected yesterday once it reached the Daily Kumo (cloud) resistance at 47.30$. Oil price could be making a double top reversal here if we see price remaining below the Daily Kumo (cloud). A rejection at current levels will bring pressure to oil prices. A break below 46-45.70$ could signal a reversal confirmation and more downside ahead for Oil prices….the longer-term pattern remains bearish as price is making lower lows and lower highs. So we could be on the verge of the start of a new downward move towards 40$. On the other hand if Oil price breaks above 48.50-49$ it could move towards the blue trend line resistance at 52$. ...
Mario Draghi tried to be as dovish as possible, but markets didn’t buy it. The move up on EUR/USD was compounded by the new Trump troubles. What’s next? Here are four opinions: Here is their view, courtesy of eFXnews: EUR/USD: Post-ECB: Towards 1.20 Before A Meaningful Correction – SocGen Societe Generale Cross Asset Strategy Research highlights 2 key points from EUR price action in reaction to today’s July ECB meeting. “Firstly, this is a meeting in late July, a time when market reactions should not be over-interpreted. Secondly, the FX market typically doesn’t react to shifts in expectations about policy moves in the very sho...
Gold prices rose $3.39 an ounce on Thursday, benefitting from a drop in the U.S. dollar index. The euro surged to its highest level in more than two years after European Central Bank President Mario Draghi said the central bank will discuss when to trim its massive bond purchases in the autumn. Weaker equity markets in the U.S. also worked in favor of the safe-haven metal. XAU/USD initially tested the support around the 1235 level before heading higher. The bulls still have the short-term technical advantage, with the market trading above the Ichimoku clouds on the 4-hourly chart, but right on top of us there is an anticipated resistance zone...