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Inflation

COST: Technical Strength Ahead of EarningsMuch of the Consumer Defensive industry and most Discount Stores have been in decline due to rising inflation. Many stores are struggling with lower revenues due to higher costs and their customers being more frugal during rising inflation periods. NASDAQ:COST is an exception with its massive strategy to buy food and common consumer necessities directly from producers and manufacturers and then use the Costco private label, Kirkland. The quality of the packaged food or clothing or other consumer product is the same, but with its ability to buy huge quantities, it has higher revenue growth after the pandemic that other stores would envy. The stock needs to settle into a sideways or platform trend to pattern out some excessive pricing structure from last quarter. It reports May 30th and the trend implies that the report should meet or exceed estimates. The previous Fundamental level is a Dark Pool Buy Zone, providing solid support. Pro traders followed that with a new pattern I call "the Nudge" which tends to lead upward momentum.
NASDAQ:COSTLong
by MarthaStokesCMT-TechniTrader
GBP/USD steady despite plunge in retail salesThe British pound continues to have a quiet week in which it has stayed close to the 1.27 line. GBP/USD is trading at 1.2715, up 0.13% at the time of writing in the European session. UK retail spending slumped in April with a 2.3% m/m decline. This followed a revised 0.2% decline in March and was much weaker than the market estimate of -0.4%. It was the largest decrease in four months, driven by a sharp fall gasoline and non-food items. Most sectors reported a drop in sales volume as unusually rainy weather put a damper consumer spending. On an annualized basis, retail sales fell 2.7%, after a revised 0.4% gain in March and missing the market estimate of -0.2%. Is the UK economy fading? The economy performed well in the first quarter, with Q1 GDP rising 0.6% q/q, its strongest quarter in over two years. The weak retail sales could be indicative of a weaker second quarter, which would support the BoE lowering the current cash rate of 5.25% which is throttling economic activity. With inflation falling to 2.3% in April, the 2% target is within striking distance and speculation has risen that the BoE will start to lower rates as early as August. In the US, the services and manufacturing sectors showed improvement in May. Services PMI jumped to 54.8 in May, up from 51.3 in April and above the market estimate of 51.3. This was the highest level in a year and pointed to improving business activity despite high interest rates. Manufacturing remains weak but the PMI rose from 50.0 to 50.9, which shows very modest growth. The 50 level separates contraction from expansion. GBP/USD is testing resistance at 1.2710. Above, there is resistance at 1.2736 1.2674 and 1.2648 are the next support levels
by OANDA
BTC - Path of least resistance and maximum painI'm not a conspiracy nut but giving room for belief in conspiracy theories, let's say the entire crypto market is a "washing machine" for various fronts. It just doesn't have any practical utility right now, that makes the world a better and safer place. The possibilities are endless but let's just say it hasn't been leveraged for any noble cause, yet. Sakamoto Natoshi would be turning in his grave should he know what his noble invention was being used for, if indeed it was a noble act from the get go. Bottomline, it has a shade to it's existence, and as such can only be construed to serve malicious intentions of governments, authorities and the rich. So it is always bound to opt the path of least resistance and maximum pain, as far as common folk are concerned, i.e. acting against them. Now stepping into reality, considering common folk, retail traders and institutions who are involved in this charade. Common folk: I meet people constantly who have never heard of bitcoin, also people who learnt about it's existence just now in 2024! A subset of this common folk with some grasp of how world economics work and an appetite for risk want a piece of the action. Retail Traders: I'm not sure if the term "retail traders" also encompasses the so called "whales". I'm assuming not. So let's say everyone working with a portfolio value of 1BTC or less. From this category (at least the sensible and well educated) never expected what happened in the first 3 months of 2024. But now that we are where we are, they also want a piece of the action(including myself), knowing very well they could be too late at the scene. Institutions: All the hedge funds and their 60+ grandpa managers who do not understand technology are also now a part of this charade, in addition to various tech companies and their CEOs, playing we know it all. "Apparently" the whole rally is attributed to the ETF inflows from said institutions. And somehow there is this sense of unshakable faith in the air, if these institutions are already invested, BTC is bound for the moon and it can never look back again. There are preposterous articles on how any price below 70k was a buy! Everything mentioned so far isn't an established fact! Let's now turn to tangible facts we know, our dear charts! Hoping and praying to the good lord, that this data is also not fabricated. The 12 month candle on the left is as big as it's ever gotten. We still have 7 months left to go until the candle closes. And looking at the volume, we are at 450k on this particular exchange, compared to an average of ~2 million on previous full candle. Assuming half a million traffic per quarter, this volume does make a lot of sense but what it doesn't correlate to, is the ETF's inflows. If anything, it should be double or triple the average based on all the news about the kind of money that's been inflowing. Very skeptical! If I were any sensible and should I consider myself in the position of a market maker, I see a lot of paths testing and breaking supports(the beaten path), rather than price discovery(the road not taken). Because, -who dares to buy any further?! -retail is already late to the party, don't want that portfolio eroding -institutions are "supposedly" already invested, who are they going to sell it too? They should be idiots to buy it all over again all the way to 100k, coz if nobody wants to buy now, who's gonna buy at 100k?! -halving has reduced the supply, there is less supply for the next 3 quarters than the previous 12 month candles and it makes sense to buy/sell lower again than at the 100k or 130k area On the contrary, looking at the perspective of taking bitcoin away from the common folk's reach, it does make sense to drive the price into the 6 figures. But then again, if you take it away from the common folk's reach, how is the so called "evil system", that's basically designed to prey on simple minds, supposed to work?! I know, I know, I'm rambling! The point is, I don't see this going to the moon any time soon! And I could be completely wrong about this and may have already fallen for the trap that's set for all of us! Time will only tell. Heartfelt thanks to anyone who's managed to reached thus far, please leave a like if you did like the read or teach me a swear word in your mother tongue down in the comments, for wasting your time! Peace!
KRAKEN:BTCUSD
by TulpenFieber
2
Top USD trades to watch ahead of Core PCE Data release The Federal Reserve’s preferred inflation gauge, US Core PCE (Personal Consumption Expenditure) Price Index MoM, is released at the end of the coming week. This means some USD trades could present themselves. But first, a quick recap on why the Core PCE Price Index matters and why it is the Fed’s preferred gauge: Unlike the more familiar Consumer Price Index (CPI), which uses a fixed basket of goods and services, the Core PCE offers a snapshot of consumer spending with a flexible and broader basket of goods and services that adapts to changes in consumer behavior. Importantly, it excludes volatile food and energy prices though. It is thus argued that the Core PCE provides a clearer view of underlying inflation trends. Some trading opportunities might exist in the EUR/USD and USD/CAD. The Euro Area’s Inflation Rate (Flash) data is due a few hours before US PCE, while Canada’s GDP Growth data is released at the exact same time as US PCE.
by BlackBull_Markets
GBP/USD shrugs as UK inflation higher than expectedThe British pound edged higher earlier today but has pared most of those gains. GBP/USD is trading at 1.2703, up 0.06% early in the North American session. UK inflation fell sharply in April, falling to 2.3% y/y. This was down from 3.2% in March and the lowest rate since July 2021 but higher than the market estimate of 2.1%. On a monthly basis, inflation dropped to 0.3%, down from 0.6% in March and just above the market estimate of 0.2%. Food prices fell while higher gasoline prices and services inflation contributed to upward pressure on CPI. Core CPI eased to 3.9% y/y, down from 4.2% in March but above the market estimate of 3.6%. The monthly reading surprised with a 0.9% gain, higher than the March gain of 0.6% and above the market estimate of 0.7%.GBP The inflation report was on the whole positive but the rise in April core CPI left investors with a sour taste and dampened expectations for rate cut in June. The money markets have lowered pricing of a June rate cut to just 18%, compared to 50% on Tuesday. The Bank of England has made inflation its number one priority and can point to an inflation rate that is closing in on the 2% target, after hitting a high of 11.2% in October 2022. The private sector is groaning under the weight of interest rates at 5.25% and the BOE has signaled that a rate hike is a possibility this summer but may have to delay an initial rate cut to August, as inflation remains sticky. In the US, we’ll get a look at the FOMC minutes of the meeting earlier this month. The minutes may provide insight into the mood of FOMC members. Based on the message that the Fed has been steadily feeding the markets, the minutes will likely be hawkish. The markets have priced in a rate hike in September but Fed members have pointed to high inflation as a reason to maintain rates in restrictive territory until there is clear evidence that inflation will remain sustainable around the 2% target. There is support at 1.2641 and 1.2570 1.2772 and 1.2843 are the next resistance lines
by OANDA
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
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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
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