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Inflation

Is a rate cut imminent? Watching incoming UK Inflation data Is a rate cut imminent? Watching incoming UK Inflation data "The next move will be a cut," Bank of England's Andrew Bailey stated in response to a question about the Governors thoughts on interest rates during a speech at the London School of Economics. This does not mean the next decision will immediately be a cut; rather, rates will remain stable until a cut is implemented, effectively ruling out any rate hikes for now. This is an important distinction. The timing for cutting interest rates remains uncertain though. In the last decision, only two of the Committee's nine members voted for a rate cut. Helping decide when the cut will come will be the revelation of the UK latest inflation data, due very soon. UK inflation could be approaching a huge milestone, with some predicting that a sharp drop in the April figures will bring the headline rate below the Bank of England’s 2% target. This would be a significant decrease from the current rate of 3.2% and could determine whether a June interest rate cut is warranted, according to economists. On the GBP/USD chart, the previously dominant peak of April has been surpassed by pound bulls. The next challenge is to surpass late March’s surge to 1.2800. If achieved, the next resistance level could be the year-to-date high of 1.2893. However, recent consolidation may indicate a decline in bullish momentum. For the exact date and time, import the BlackBull Markets Economic Calendar to your email inbox.
by BlackBull_Markets
NZD/USD steady ahead of RBNZ rate announcementThe New Zealand dollar is almost unchanged on Tuesday. NZD/USD is down 0.06%, trading at 0.6102 in the European session at the time of writing. The Reserve Bank of New Zealand has shown it can be patient, having held the cash rate at 4.35% for six straight times. The central bank is expected to maintain rates yet again at Wednesday’s meeting as inflation has remained stubbornly high. Inflation has been moving lower and fell to 4% in the first quarter, down from 4.7% in the fourth quarter of 2023. However, this remains double the midpoint of the 1-3% target range and is too high for the RBNZ to start trimming rates in the near-term. At the same time, economic data for the first quarter was soft which should result in disinflation. The unemployment rate rose to 4.3% in the first quarter, private wage growth decelerated and GDP contracted by 0.1% q/q. The RBNZ had its mandate limited to inflation in December; previously, the central bank was mandated to maintain low inflation and full employment. Still, the strength of the labor market and wage growth will be eyed by the central bank as it determines its rate policy. The Federal Reserve continues to sound hawkish about rate policy and remains cautious about rate cuts. On Monday, Fed Vice Chair Philip Jefferson said that it was too early to tell if the downtrend in inflation would be “long lasting”. Fed Vice Chair of Supervision Michael Barr said that first-quarter inflation data was disappointing and was not supportive of easing monetary policy. For a second straight day, there are no US economic releases and we’ll hear from a host of FOMC members, which could provide insights about the Fed’s rate policy plans. NZD/USD is tested support at 0.6089 earlier . Below, there is support at 0.6039 0.6185 and 0.6235 are the next resistance lines
by OANDA
Arbitrage Idea on Food CommoditiesCME: Lean Hog ( CME:HE1! ), Live Cattle ( CME:LE1! ) Here is the official narrative on US inflation: The Federal Reserve’s monetary tightening policy has successfully brought down inflation rate from a four-decade high to about 3 percent, delivering much needed reliefs to US consumers. Government data supports this narrative. Take food costs as an example: In August 2022, CPI on food items reached a record 11.4%, well above the peak headline CPI of 9.1%. Rising food costs were a leading inflation contributor. By April 2024, the headline CPI went down to 3.4%, while food CPI was even lower at 2.2%, according to the Bureau of Labor Statistics (BLS). Low food prices helped decelerate the overall inflation. Grocery shoppers and restaurant diners would likely disagree as they tend to experience much bigger price hikes. Let’s read the same data from a different angle. • The headline CPI (CPI-U) rose from 267.054 in April 2021 to 313.548 in April 2024. (Note: The BLS CPI data sets the years 1982-84 as a baseline at 100.) In other words, CPI-U has gone up 17.4% in the past three years. • For the same period, food CPI rose from 273.090 to 321.566, up 17.8% in 3 years. This data shows the whole picture. The cumulative effect of multi-year inflation has elevated prices to higher levels. Annualized rates of increase have indeed decelerated. But as long as they remain positive, price levels will continue to go up. A Deep Dive on Food Inflation The BLS categorizes food items into “Food at Home” and “Food away from Home”. This methodology would result in the same type of food showing up in two categories. The logic behind it is debatable. While it makes sense to observe and report sales prices from different venues, it makes the task of data analysis much more complicated. I propose a reclassification of food items into meat, grain, and beverage categories. Each has several commodities trading on the futures market, where its price-discovery function helps bring all relevant supply and demand information together. The Livestock/Meat Market Live Cattle ( NASDAQ:LE ) and Lean Hog ( NYSE:HE ) are commodities contracts trading on the Chicago Mercantile Exchange (CME) futures market. In the past five years, Live Cattle futures have gone up over 60%, well above the 27.4% in CPI-Food for the same period. Meanwhile, Lean Hog advanced less than 5%. Why beef price rose rapidly when pork price declined throughout most of the inflationary period? What’s reason behind the diverged price patterns between the two meat products? We will come back to this in the next section. The Grain Market Corn ( TSXV:ZC ), Soybean ( NASDAQ:ZS ) and Wheat ( SEED_MSTRWHYT_FUTURES_WASDE:ZW ) are commodities contracts trading on the Chicago Board of Trade (CBOT) futures market. The 5-year price changes for Corn, Soybean and Wheat are 28.9%, 51.3% and 55.1% respectively, all above the 27.4% in CPI-Food for the same period. We observed that grain prices peaked in 2022 after the Russia-Ukraine conflict started. Wheat prices doubled in a matter of weeks, as investors feared that production by the two major wheat exporters may be interrupted. More recently, grain prices were trending down in the past two years, a result of stable supply and weak global demand. The Beverage Ingredient Market The 5-year price changes for Cocoa, Coffee, Orange Juice, and Sugar are 252%, 196%, 63% and 29% respectively. The spike of Cocoa price by 400% caught market attention earlier. This was followed by a nosedive with price cut in half. Cocoa contract does not have adequate liquidity. Trader speculation was likely the main factor causing the dramatic price movement. Arbitrage Opportunity with Live Cattle and Lean Hog Futures In “What Disinflation - Beef Price Went Up 64% in 5 Years”, published on August 7, 2023, I introduced an arbitrage idea for shorting (selling) the cattle-hog price spread. The 20-year price chart shows that the spread between live cattle (LE) and lean hog (HE) broadly stays in the range of $20-$60 per 100 pounds. On August 4th, LEV3 settled at $183.10 while HEV3 closed at $83.25. The spread has widened to nearly $100, well above the historical average. On May 17th, Live Cattle August contract LEQ4 settled at $178.85, while Lean Hog August contract HEQ4 closed at $99.55. The spread has narrowed to $79.30, down $20. Futures market confirmed my view. In my opinion, the same fundamental factors are still at work and could drive the spread down further to the $60 range. 1. Price Sensitivity and Substitution o When beef price gets too high, its demands could be partially substituted by the lower-priced pork. Price sensitive consumers would choose pork chops over a steak dinner. The result would be lower beef price and higher pork price, as the demand for the former is redirected to the latter. 2. Mean Reversion o The price spread at $100 was two standard deviations above its historical mean. Statistically speaking, such an outliner is abnormal. There is a good likelihood that the spread would fall back to the $20-$60 normal range. 3. Hog Cycle o The multi-year Hog Production Cycle has major impact, with fewer sows yielding a smaller hog production in the next 12-18 months. Hog production reduction would result in higher pork prices down the supply chain. For a thorough understanding of the fundamentals in the beef cattle and lean hog markets, please read my previous writings, listed at the end of this post. To set up a short cattle-hog spread trade, one could sell one live cattle contract and simultaneously buy one lean hog contract. Each cattle contract has a notional value of 40,000 pounds, or $71,540 (= $178.85 x 400). To buy or sell one contract requires a margin of $2,450. Each hog contract has a notional value of 40,000 pounds, or $39,820 (= $99.55 x 400). To buy or sell one contract requires a margin of $1,500. The two-legged spread trade requires an upfront margin of $3,950. Hypothetically, if the cattle-hog spread narrows to $60 from $79, the $19 difference would translate into an account credit of $7,600 (= 19 x 400). Using the margin as a cost base, the theoretical return on this trade would be 192% (= 7600 / 3950). The trade would lose money if the price spread did not narrow. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CME:HE1!Long
by JimHuangChicago
1
Rolling 5-Year InflationInstead of using the monthly inflation print, a 5-year (60-month) SMA is used to chart US inflation. The SMA is used to cut back on noise from “transitory” inflation, giving a better view of the broader inflation environment realized over the past half-decade. Said differently, it illustrates the inflation environment which policymakers and central bankers are/were “dealing with.” For a more short-term-oriented view of regime change, an EMA might be used in place of an SMA. A shorter-term view is likely to be more useful in the context of near-term interest rate cuts. Historically, inflation tends to evolve from one “regime” to another. The implications of a regime change are enormous, and I am growing in my conviction that we are now in a new regime, as evidenced by the SMA breaking through a key level (explained below). Since inflation prints (or, any macro data, for that matter) are a fool’s game to predict with a high degree of precision, I used a pseudoscientific approach which yielded 3.25% as the key level for inflation to “break through” to a new regime. Using 3.25% also gives us a “round” number, making it easier to quickly put inflation prints in context (for me, at least). My commentary and some ideas to consider: Why 3.25% is important: it had not been “breached” since 1996. Put another way: the prevailing inflation environment has reached a level not seen in 28 years. Why is 1996 important? A look back over the past century provides hindsight of when prior inflation regimes began and ended. After the “1970’s” (colloquially), we entered a new era which realized a prolonged downtrend in inflation worldwide. 1996 became a clear demarcation point upon identifying waves of “lower highs and lower lows” in the years since. Further, 1996 roughly coincides with the end of a series of markedly higher “waves” of inflation. I feel it is relevant to also point out the dramatic changes in the world since we last saw 3.25% in 1996. 1. Internet In 1996, the internet as we know it today was in its infancy. This is obviously a change of biblical proportions in the way we live, and never before in human history has the entire world been connected in this manner (i.e., we are the guinea pigs of computing). Entire libraries could be filled with commentary on the internet’s impact on the economy, so I will defer to the experts for opinions. That said, it has generally been disinflationary. 2. Tech Giants Today, the 6 highest weighted S&P 500 stocks account for ~25% of the index. In 1996, of these six, only MSFT and AAPL were “established” companies, and even then, AAPL was in the midst of an identity crisis and was nowhere near the trillion dollar behemoth it is today. As for the remaining four: NVDA was founded three years prior in 1993, and in 1996 laid off ~1/2 of its then-100 employees. GOOG was still a research project of a pair of PhD’s and wouldn’t launch for another two years. AMZN was still in its first year of operations as an online bookstore, a far cry from its monstrous scale today. And, finally, the founder and brainchild of META, Mark Zuckerberg, was 11 years old, and the term social media was still about a decade away from entering even the fringes of society’s lexicon. This is all to say, nearly 1/4 of the proxy for the “equity market” - the S&P 500 - is driven by ENTIRELY NEW “inventions” (or products, services, goods, etc.). In the context of inflation, NONE of these “inventions” have EVER existed in an economy with inflation “above 3.25%.” There is a mammoth amount of capital that is put towards tracking the S&P 500, and in order to balance weights when tracking, it involves the buying and selling of all its constituents together. Having been untested in a transition to a “higher” inflation regime, it remains to be seen how the heavyweights of the S&P will hold up. Should they demonstrate an inability to “absorb” inflation, it would likely result in a broader sell off of the S&P, and would be exacerbated by a rotation to fixed income should interest rates remain elevated and offer yield which is more attractive than uncertainty as to when the “absorption” will occur, if it does at all. 3. China In 1996, China was still in its second stage of economic reforms, privatizing SOE’s, and would not enter the WTO for another five years. The consequences of China’s reforms have been enormous, and are potentially the most important influencer of inflation over the past thirty or so years. Again, this is another topic that could fill a library, and I will not elaborate more. That said, the effects of China’s reforms have been largely disinflationary. It is uncertain whether this trend will continue, as China is now facing a host of serious financial issues which could reach a boiling point. In particular, China is now the dominant player in commodity markets, virtually controlling the supply and/or demand for many of the world’s raw materials. How this interacts with China’s navigation of financial issues is uncertain, but has potential to be highly disruptive to global supply chains, which would push inflation higher. 4. Government Debt The US’ prolonged wars in Afghanistan and Iraq, on which the country spent several trillion dollars over nearly two decades, were still several years from occurring. Unlike other wars in the 20th Century and in recent history, these wars were largely financed through government debt. In the opinion of many, these wars were considered to be failures. Largely agreeing with this notion, the expansion of deficit spending to finance “lost” wars not only diverted monies from useful purposes such as infrastructure and education, but also hastened the government’s need to “inflate away” its debt. According to a paper by Brown University’s Watson Institute, the interest expense alone on the debt used to finance these wars will likely exceed $2 TN by 2030. To put this in perspective, when considering the 2022 federal outlay for highway spending amounted to $47 BN, these interest payments on war debt are roughly equal to FIFTY YEARS worth of federal highway spending. To make matters worse, the debt from the US’ wars pales in comparison to the bonanza in government spending in response to COVID. A whopping $5 TN in stimulus was doled out in a matter of months. It will take years to determine the ultimate effect the stimulus money will have had on the economy’s “intangibles”. For now, it is clear this spending spree has bloated the government’s debt, and input can be argued the US is running a dangerously high Debt/GDP ratio - a bellwether of inflation. How does the government plan to dig itself out of this hole? Logic points towards the path of least resistance, which in this case means “inflating away the debt.” We very well may have already begun to see this process set in motion. Inflation, by its nature, carries political implications, which has often led to charged discourse and sensationalized media headlines. This rings particularly true in election years (this year) and in times of collective struggle (the COVID era). Unfortunately, this can muddy the waters when trying to make sense of the data prints. My aim was to make a simple illustration which can uncover a regime change in inflation. It is up to the user to determine whether the regime change signal holds validity.
ECONOMICS:USIRYY
by ltstrudw
Overall Sentiment for US Economy from January to May 2024The period from January to May 2024 has been marked by significant bearish sentiment due to multiple geopolitical events. The escalation of conflicts in Ukraine, increased US-China trade tensions, disruptions in the Red Sea, and heightened hostilities in the Middle East have collectively contributed to market instability. These events led to increased energy prices, supply chain disruptions, and heightened global volatility, which pressured the US Dollar Index. The overall bearish impact on the dollar was driven primarily by inflationary pressures from higher oil prices and increased geopolitical risks, reducing demand for the dollar as a safe haven. Large institutions had to adjust their portfolios and manage risks strategically to navigate the volatile environment.
TVC:DXYShort
by CandlesofKarma
Gold Expected To Rise Due To Lower Inflation NumbersHere is why we think gold prices will go up (FUNDAMENTAL ANALYSIS) Lower Core Inflation Numbers and Potential Fed Rate Cuts: The recent core inflation report came in weaker than expected, signaling a sluggish economy 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 Core Prices: Weak core prices provide the Federal Reserve with greater rationale to implement interest rate cuts. Lower interest rates typically weaken the dollar as they make dollar-denominated assets less attractive relative to other currencies. Consequently, a weakened dollar often leads to upward pressure on gold prices. Potential Fed Policy Response: In response to concerns over weak core prices, the Federal Reserve may contemplate lowering interest rates to stimulate economic activity. By reducing borrowing costs, lower interest rates can encourage consumer spending and investment, thereby bolstering economic growth. However, this policy action tends to weaken the dollar, which can benefit gold prices. 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 and signal a upcoming recession. 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. For example if inflation rises, 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 2426 due to a strong area there ( see green line ) Stop-Loss: is set at 2338 which is right under 2344, 2344 has been showing stronger support. Conclusion: The prospect of interest rate cuts by the Federal Reserve, driven by concerns over weak core prices, has contributed to upward pressure on gold prices. As lower interest rates tend to weaken the dollar, gold becomes more attractive as a safe-haven asset, thus supporting its price. However, market participants should remain vigilant and adapt their strategies in response to evolving economic conditions and policy decisions. Like always use proper risk-management. Greetings, Zila
FOREXCOM:XAUUSDLong
by ZILATRADES
Bond Market Hints Towards a Second Wave of Shorts to hit the JPYLate last year the Spread of the US/JP Carry Trade hit the PCZ of a Bearish Shark resulting in it pulling back to the 50% Retrace, this came ahead of Bearish Action in the stock market and strength in the JPY. However, the bounce at the 50% retrace indicates that it could turn into a Bullish 5-0 which would result in higher highs. In addition to that, the leverage ratio on the trade has been forming what looks to be a nice looking Cup with Handle pattern, which if it plays out would bring the leverage ratios up from 500% to well over 800%. This would likely align with higher highs in the SPX, Higher Inflation Rates, Higher Commodity, Import/Export Costs, and a continuation of the falling Japanese Yen. I will leave the chart of last year's Carry Spread Chart Post below for reference.
TVC:US10YLong
by RizeSenpai
Euro edges lower despite positive inflation reportThe euro has posted slight losses on Friday. EUR/USD is down 0.28%, trading at 1.0837 in the North American session at the time of writing. The April inflation report showed that headline inflation remained steady at 2.4% y/y, holding at its lowest level in almost three years. Services inflation and energy prices declined, while food, alcohol and tobacco prices were slightly higher. Monthly, headline CPI eased to 0.6%, down from 0.8% in March and matching the market estimate. The most significant news was the decline in core CPI, which excludes energy and food, alcohol and tobacco and is a more accurate indicator of inflation trends. The core rate fell to 2.7% y/y, down from 2.9% in March and matching the market estimate. Core CPI has now decelerated nine straight times and has dropped to its lowest level since February 2022. The European Commission announced earlier in the week that eurozone inflation is expected to drop to 2.5% in 2024 and fall to the 2% target in the second half of 2025. The European Central Bank has done a good job slashing inflation, which was running at 7% a year ago. The ECB has signaled that it is ready to shift policy and lower rates at the June meeting. ECB President Lagarde has widely hinted at a June cut but has remained mum about what happens after that. Lagarde doesn’t want to raise expectations of a series of rate cuts and then disappoint the markets if the ECB doesn’t follow through. There are no key economic releases out of the US today, leaving FedSpeak as the highlight of the day. Three voting members of the FOMC, Christopher Waller, Mary Daly and Adriana Kugler will deliver speeches which could provide some insights into future US rate policy. FOMC members have sounded rather hawkish, saying that restrictive policy is working and there is no rush to lower rates. EUR/USD is testing support at 1.0850 and is putting pressure on support at 1.0832 There is resistance at 1.0872 and 1.0890
by OANDA
USD/JPY steady as Japanese economy contractsThe Japanese yen climbed as much as 0.85% earlier on Thursday but has pared most of those gains. USD/JPY is trading at 155.38, up 0.31% in the European session. Japan’s economy contracted in the first quarter. GDP declined by 2% y/y in the first quarter, following a revised 0% reading in Q4 2023. This was weaker than the market estimate of -15.%. On a quarterly basis, GDP declined by 0.5%, down from a revised 0% reading and just above the market estimate of -0.4%. The disappointing GDP release was a result of weak private consumption, which declined for a fourth consecutive quarter. Consumers and companies cut spending due to high inflation and sluggish wage growth. As well, exports decreased in the first quarter, as global demand remains weak. After several US inflation reports which pointed to higher inflation, April CPI reversed directions and dropped from 3.5% to 3.4%. The decline in inflation, especially in the core rate, raised expectations of a Fed rate cut and sent the yen surging 0.98% in the aftermath of the inflation report. The markets have priced in a September rate cut at 70% and a rate cut before the end of the year at 92%, according to the CME FedWatch tool. Overlooked by all the attention to the inflation report, US retail sales fell to 3% y/y in April, down sharply from a revised 3.8% in March. Monthly, retail sales were flat, compared to a revised 0.6% in March. This points to consumers cutting down on spending due to high interest rates and high inflation. USD/JPY pushed below support at 154.21 earlier and put pressure on support at 153.51 There is resistance at 155.38 and 156.08
by OANDA
1
US10Y - US Ten Year Yields WeeklySome weekly consolidation; Possible yields haven't topped yet. These inflection points lead to weekly and monthly trend changes which I will be looking for a potential spike as momentum shifts back down and rates test the keltner channel mid or upper line. There is also a possibility that rates breakout of the resistance (trend change) of this bullish leg from 2020. The Red line on the keltner channel oscillator at the bottom. I expect more black swan events to occur as chaos ramps up in the next year.
TVC:US10Y
by Mikhiavelli
CPI Index Rises over 43% per decade on Average - Don't be Fooledby the Politicians, Talking heads and Bankers. Governments can only Tax, Borrow & Spend Central Banks can only Print & Lend. If this index were to rise by the average of 43% You are looking at the CPI Index hitting 372 by Jan 2030 There is every likelihood this decade, will be a higher than average inflation rise. You must save in scarce Assets #Gold & #Bitcoin You must continue to in invest in #Technology #ETH & #LINK come to mind.
FRED:CPIAUCSLLong
by BallaJi
DXY likely go up by rise in inflationwe believe The DXY TVC:DXY will rise after inflation data. in the technical term we can see a 5-wave impulse pattern and an ABC correction after that we may see another 5-wave upward momentum. Our technical view has been shown in the chart. If you like it then Support us by Like, Following, and Sharing. Thanks For Reading Team Fortuna -RC (Disclaimer: Published ideas and other Contents on this page are for educational purposes and do not include a financial recommendation. Trading is Risky, so before any action do your research.)
ICEUS:DXYLong
by fortunamarkets
GOLD FORECASTGold New Forecast The price of XAUUSD (Gold) is expected to be volatile today due to the release of the CPI news. The movement will depend on the results: if the CPI is higher than expected, it typically indicates rising inflation, which could lead to increased interest rates and potentially cause gold prices to fall. Conversely, if the CPI is lower than expected, it suggests lower inflation, which might result in lower interest rates and potentially drive gold prices up. The price will respond accordingly to the CPI results. So, if the CPI is higher than expected, the price will try to reach 2364 & 2357 & 2344 then 2331. otherwise if the CPI is Less or equal to expectations will try to do a Bullish trend which is 2384 & 2392. and the expectations are more positive, so it will effect a bearish trend to OANDA:XAUUSD Key Levels Bullish Line: 2384, 2392. Pivot Line: 2374 Bearish Line: 2364, 2357, 2344, 2331
OANDA:XAUUSDShort
by RojBarwari
Why Large Firms with Huge Cash? Small Firm Are Leading...Berkshire Hathaway, an investment company is not investing. What is the signal? Why are they hoarding cash? • Not much good investment opportunity ahead • Preparing for tougher time E-mini S&P 500 Futures & Options Ticker: ES Minimum fluctuation: 0.25 index points = $12.50 Micro E-mini S&P 500 Futures & Options Ticker: MES Minimum fluctuation: 0.25 index points = $1.25 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CME_MINI:M2K1!
by konhow
3
Another of my masterpieces on $COPPER this time long time comingI've been meaning to revisit NYSE:HG for a while now and finally have done so; there have been some very interesting visits to black swan territory on this chart and the short term targets after breaking out from another of those green channels could really be quite high (see 20y ago) Some very notable calls in recent years: SPREADEX:NIKKEI and TVC:DJI both to 40k (over 1y in advance) CRYPTOCAP:BTC pico bottom at 15k and recent local top at 70k FX:EURUSD pico bottom & TVC:DXY pico top at 115 TVC:USOIL pico bottom at 68 NASDAQ:SMCI mega breakout at 100 NASDAQ:NVDA mega support at 120 NASDAQ:TSLA pico bottom at 105 NASDAQ:NFLX pico bottom at 165
COMEX:HG1!
by markusrafferty
What did Powell say and what did gold do? Federal Reserve Chair Jerome Powell expressed reservations about the trajectory of disinflation in the US during his recent remarks, stating, "My confidence in that is not as high as it was." Despite this, he indicated that further rate hikes were unlikely based on the data from the first quarter of the year. Powell's comments largely echoed those made during his last press conference following the Federal Reserve's previous meeting. Market sentiment regarding the Fed's rate decisions appears to be slightly adjusting though, particularly after the release of new data showing faster-than-expected increases in producer prices in April. Traders are now considering a 60% chance of a rate cut in September, down slightly from the 64% chance before Powells remarks and the Producer Price Index (PPI) report. Following the release of the PPI data, the XAU/USD pair climbed nearly 0.8% to $2,357, with potential for further gains in upcoming trading sessions. Technical analysis indicates that the next obstacle for gold prices lies near trendline resistance at $2,370, while immediate support rests close to $2,320, followed by the 50-day Moving Average. Market attention now turns to the release of consumer price data for April, scheduled for Wednesday.
BLACKBULL:XAUUSD
by BlackBull_Markets
Here's what Wall Street economists expects this week.Federal Reserve Chair Jerome Powell emphasized the need for continued patience in monitoring inflation trends during his remarks at the Foreign Bankers’ Association's annual meeting in Amsterdam on Tuesday. Powell highlighted that while there was some easing of inflation in the U.S. last year, the first quarter showed unexpectedly high inflation rates, which were not anticipated. Despite these challenges, he maintains a cautious optimism that inflation will gradually return to the Fed's target of 2% over the year, though he admitted his confidence has diminished somewhat following the recent data. Powell concluded by stating that the central bank will closely observe incoming inflation data to determine its future monetary policy actions. This week will see an increase in activity with the upcoming release of the U.S. April consumer price index on Wednesday, which is closely watched by economists focusing on potential changes in Federal Reserve policies, particularly the possibility of interest rate cuts before the end of the year. Recent data has shown a disruption in the declining inflation trend from the first quarter, sparking concerns about persistently higher inflation rates and reduced likelihood of monetary easing, according to Sam Bullard, a senior economist at Wells Fargo. In response to these concerns, Fed Chair Jerome Powell has indicated two scenarios that could lead to rate cuts: a reassurance of low inflation rates or a sudden downturn in the labor market. Key events this week include: Consumer Price Index (CPI) for April: Scheduled for release at 8:30 a.m. Eastern on Wednesday. Economists anticipate that the headline CPI inflation will increase by 0.4% for the third consecutive month, with the year-over-year rate possibly moderating to 3.4%, slightly down from 3.5% the previous month. The core CPI, which excludes volatile items like food and energy, might rise by 0.3%, marking the lowest rate since December, with an annual pace expected to decline to 3.6%, a three-year low. Retail Sales for April: Also set for Wednesday at 8:30 a.m. Eastern, where retail sales are expected to show a modest increase of 0.5%, following a strong 0.7% rise in March. Sales excluding autos might increase by just 0.2%, compared to a 1.1% increase the previous month. Adjustments to March's figures could be made, potentially affecting the April growth figures. Weekly Jobless Claims: On Thursday at 8:30 a.m. Eastern, jobless claims are anticipated to decrease by 12,000, offsetting more than half of the previous week's unexpected rise to 231,000, influenced by seasonal employment shifts in New York. Overall, while inflation has shown signs of heating up unexpectedly in the first quarter, economists still forecast a downward trend for the year. The Philadelphia Fed's latest survey suggests that by the fourth quarter, headline inflation could slow to 2.5% annually, with core inflation at 2.7%.
OANDA:SPX500USDEducation
by SroshMayi
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
OANDA:XAUUSDLong
by ZILATRADES
32
British pound listless despite strong GDPThe British pound is drifting on Friday. GBP/USD is up 0.05%, trading at 1.2531 in the European session at the time of writing. The British economy grew by 0.6% q/q in the first quarter, higher than the market estimate of 0.4% and above the Q4 2023 decline of 0.3%. This marks a rebound after a mild recession in the second half of 2023. GDP posted its best quarterly growth since Q4 of 2021 and was driven by increased expansion in the services sector. On a monthly basis, GDP rose 0.4% in March, up from 0.2% in February and above the forecast of 0.1%. This was its best performance in nine months. The British pound showed little reaction to the GDP data. The positive GDP report is unlikely to change the BoE’s rate path, which admittedly isn’t all that clear. The modest economic turnaround in the first quarter isn’t expected to be inflationary, which leaves the BoE on course to lower rates later this year. The Bank of England maintained the cash rate at 5.25% at yesterday’s meeting. The markets were hoping for a signal of a rate cut in June, but Governor Bailey didn’t play along, saying that the central bank needed to see more evidence that inflation remain low prior to cutting rates. Bailey added he was “optimistic that things are moving in the right direction”, which could be a signal that rate cuts are on the way. The markets have priced a June cut at around 50% and have fully priced a cut in August. It’s a light data calendar in the US, with UoM Consumer Sentiment the sole tier-1 event. The index is expected to drop to 76.0 in May, down from 77.2 in April. GBP/USD Technical There is support at 1.2499 and 1.2471 1.2552 and 1.2580 are the next resistance lines
by OANDA
1