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Donald Trump is winning the currency cold war: Pimco


Posted by Robert Zurrer

on Wednesday, 26 July 2017 12:06

MW-FR065 trump  20170726132759 ZH‘Trade bullying has killed the dollar bull’: Joachim Fels

Donald Trump can’t point to much in the way of legislative victories over his first six months in office, but he might have something to crow about when it comes to a weaker U.S. dollar.

“Much of the world has been waging a cold currency war since the autumn of 2016, and so far the winner is Donald Trump,” wrote Joachim Fels, global economic adviser for asset manager Pimco, in a Wednesday blog post

Trump regularly charged during the presidential campaign that other countries were taking advantage of the U.S. by manipulating their currencies, leaving U.S. exporters to suffer from an overvalued dollar. The Trump administration hasn’t followed through on a campaign pledge to declare China a currency manipulator, but has continued to at least talk tough on trade-related issues.

...continue reading HERE

 



Bonds & Interest Rates

Thoughts on FOMC Day


Posted by Gary Tanashian via NFTRH

on Wednesday, 26 July 2017 08:20

It is FOMC day, a periodic ritual where a group of economists get together and pretend to have decisions to make about interest rate policy. Well, according to CME and the Fed Funds Futures there is a 97% chance that the Fed sits on its hands today. That won't be a surprise.

8514e8d7-268e-4f67-b89d-a7b825537d13

But Janet Yellen has a little problem and his name is Uncle Buck. The US dollar index and its pairing vs. several global currencies are on the verge of collapsing below important support levels. This update on currencies from this week's NFTRH 457 explains why I am short the euro and prepared for the USD to find support and bounce. Now, at this point that is just a contrarian's fantasy because the market says USD is in trouble. But have a look at the post and see if you might agree with some of its premises, especially where sentiment and Commitments of Traders are concerned.

So here we have the Fed, overseeing a massive bull market in stocks and ostensibly in accommodation removal mode. My premise since the election of Donald Trump has been that the Fed could now slowly and routinely remove the monetary policy stimulants it had injected into markets nearly non-stop during the Obama years because that admin's goals depended on monetary policy (i.e. monetary stimulation, because there sure was precious little real economic stimulation going on) whereas the new Republican policies would depend upon fiscal stimulation. I would argue, however, that "fiscal stimulation" may be code for 'dollar devaluation' to spur exports and boost manufacturing.

So a big question now is whether the Fed, despite its slow tightening regime and stated intention to implement future rate hikes and reduce the size of its balance sheet (USD-supportive actions) actually means business, leaving the Trump admin to its fiscal policies; or whether the Fed will 'play ball' with this admin in a different way.

Core to the Trump fiscal agenda would be a weak US dollar. We just may get a look at Yellen's cards today. If FOMC rolls over and keeps things well and dovish despite the weak USD, we'd have a clue that they are on board the weak dollar express. But what if the Fed chooses to support the dollar through some subtle jawboning about future hikes and balance sheet reductions? I have no real dog in this fight. I'm just trying to make sure NFTRH is on the right side of it.

Looking at it from a different angle and taking out the political while only considering market-oriented inputs, here is a big picture look at previous Fed tightening cycles. The stock market topped on the last two occasions that the Fed Funds Rate (FFR) caught up to and slightly exceeded the 2 year Treasury yield. But a more acute signal was when the 2yr began to decline and negatively diverge the FFR (note the red lines on the chart below).



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Bonds & Interest Rates

Something Big, Bad And Ugly Is Taking Place In The U.S. Retirement Market


Posted by Steve St. Angelo - SRSrocco Report

on Wednesday, 26 July 2017 07:32

While the highly inflated value of the U.S. Retirement Market reached a new high this year, something is seriously wrong when we look behind the scenes.  Of course, Americans have no idea that the U.S. Retirement Market is only a few steps from falling off the cliff, because their eyes are focused on the shiny spinning roulette wheel called the Wall Street Stock Market.

Yes, everyone continues to place their bets, hoping and praying that they will win it big, so they can retire in style.  Unfortunately, American gamblers at the casino have no idea that the HOUSE is out of money.  The only thing remaining in their backroom vaults is a small stash of cash and a bunch of IOU’s and debts.

According to the ICI – Investment Company Institute, the U.S. Retirement Market hit a new record $26.1 trillion in the first quarter of 2017:

Q1-2017-US-Retirement-Market



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Wealth Building Strategies

Inside the Mind of a Crowd


Posted by Matthew Kerkhoff - Financial Sense

on Wednesday, 26 July 2017 07:16

layeredcrowds6000pxwideJohn Maynard Keynes once wrote what may be one of the most insightful observations on financial markets ever conceived:

We have reached the third degree where we devote our intelligence to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth, and higher degrees.

Now, what exactly is he talking about?

While it sounds like Keynes may have been practicing some rare form of martial arts, or Zen meditation, he was actually talking about financial markets … in particular, how to predict them.

....continue reading HERE



Timing & trends

More Commitment of Traders Perspective


Posted by T. Ferguson - tfmetalsreport.com

on Wednesday, 26 July 2017 07:06

We all saw a lot of commentary and "analysis" over the weekend regarding the latest Commitment of Traders report. Again, these numbers are most important when considered through the lens of historical perspective and that's what we attempt to show you today.

It's going to be a long and busy week. From Fedlines to Durable Goods to GDP...there's a lot going on. And Lord knows what lies ahead politically and geo-politically! Here's just a brief summary:

Screen Shot 2017-07-26 at 7.28.58 AM

The metals have begun the week just slightly to the upside and this is nice. More on this later today and as we go through the week, of course.

However, for today I'd like to simply concentrate on the two charts below. Again, the only real value in analyzing the CoT reports is in being able to reference the current positioning versus historical data and price. For me, the best way to do this is to simply lay some data onto a weekly price chart.

Let's start with Comex Digital Gold. If you listened to last Friday's podcast, then you know that:

  • At 157,094 contracts, the Large Spec GROSS short position is the largest seen since the survey taken July 28, 2015
  • At 153,064 contracts, the Gold Commercial GROSS long position is the largest since December 1, 2015
  • At 73,635 contracts, the Gold Commercial NET short position is the smallest since January 26, 2016

But how does this all appear on the chart? Are these levels historically significant? Please take the time to expand (and perhaps print) this chart. Take a good, long look and decide for yourself.

gold1 15

 

Larger Chart



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