EURUSD 1.2047 |
USDJPY 106.71 |
GBPUSD 1.3920 |
AUDUSD 0.7736 |
USDCAD 1.2673 |
GBPJPY 148.54 |
EURJPY 128.54 |
AUDJPY 82.55 |
CADJPY 84.17 |
Silver 26.74 |
Friday's plunge in yields was just as notable as the preceding gains. As Fed chair Powell gears to speak next Thursday about the economy, here are the things im watching: 1) favourite of mine involving an overlay of HUI gold miners, suggesting major developments in XAUUSD (i will share these with the WBG next week); 2) The same applies to the Gold/SPX ratio, showing similar technical positives to the patterns of 2001, until support gave up these past two weeks. 3) Friday's candles in 2 and 10 year yields suggest neutral-negative moves early in the week, but it is the midweek-Thursday that Im concerned about. 4) USDJPY knived through its 200-DMA and its 55-WMA, calling for 107.20 as a short-term target. Our WhatsApp Broadcast Group entered this pair back in 104.60s. 5) Those who trade indices have seen the balant manner in which the jump in yields and oil boosted the DOW30, before their sharp Friday pullback dragged down the index, while supporting NASDAQ. We were active throughout the week with our WhatsApp Broadcast Group (WBG), sharing trades/analysis on DOW30, Nasdaq, XAUUSD, USDJPY, EURUSD and GBPUSD. Tune in for more next week. This is far from over.
Analog of USDJPY Net Longs Breakdown
The prolonged ascent in USDJPY remains fortified by the technical breakdown in net JPY futures longs (inversely related with USDJPY pair) shown in this striking analog from Q4 2016.
View Hot-Chart..
Regarding the start of the silver crash, the 3rd silver margin increase was announced Thursday and already known to the market Friday April 29th, and didn't have as big of an immediate impact as some would have expected, there could have been major liquidation that day, but not so much happened. As I posted elsewhere in the forum, the sell off in silver started within a few minutes of the Globex open on Sunday evening here in the US, it was a classic large move (perhaps a speculative attack) greatly aided by a typically thin holiday session with several countries closed. And once it got rolling many stops were probably triggered, with prices diving 12% in 11 minutes and only 6,000 silver futures contracts were traded in that time!
The Bin Laden news didn't even hit the headlines until a few hours later.
Don't be fooled: a food and oil price spike is not and cannot be inflationary in those advanced industrial economies where the credit system remains broken, the broad money supply is contracting, and fiscal policy is tightening by design or default.
It is deflationary, acting as a transfer tax to petro-powers and the agro-bloc. It saps demand from the rest of the economy. If recovery is already losing steam in the US, Japan, Italy, and France as the OECD's leading indicators suggest - or stalling altogether as some fear - the Eurasian wheat crisis will merely give them an extra shove over the edge.
Yields on two-year US Treasury debt fell last week to 0.50pc, the lowest in history. Core US inflation is the lowest since the mid-1960s. US business inflation (pricing power) is at zero. Bank lending is flat and securitised consumer credit has collapsed from $900bn to $240bn in the last year.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7933235/Commodity-spike-queers-the-pitch-for-Bernankes-QE2.html
Economics is Hard. Dont Let Bloggers Tell You Otherwise
In this essay, I argue that neither non-economist bloggers, nor economists who portray economics especially macroeconomic policy as a simple enterprise with clear conclusions, are likely to contibute any insight to discussion of economics and, as a result, should be ignored by an open-minded lay public.
Writers who have not taken a year of PhD coursework in a decent economics department (and passed their PhD qualifying exams), cannot meaningfully advance the discussion on economic policy.
http://www.scribd.com/doc/33655771/Economics-is-Hard
Last year, the Financial Services Agency announced it would set limits on how much foreign-exchange investors can buy on margin, in order to protect "Mrs. Watanabe" - no relation to the Your Party leader. The common surname has become the collective moniker for Japan's retail investors, in a country where housewives are often in charge of family budget and investment decisions.
The plan calls for the leverage cap to be set at 50 times the amount of principle cash committed starting in August, and then further cut to 25 times next year.
The rule change came after a spate of local media reports about some of these housewives losing huge sums, trading on margin hundreds of times the minimum amount they were required to invest up front to open their accounts.
Tohru Sasaki, chief foreign-exchange strategist for Japan at J.P. Morgan Securities in Tokyo, estimated in a report this week that "Mr. and Mrs.Watanabe" hold about 6 trillion yen ($67 billion) of short-yen positions, which he said is "almost the same level as the peak in 2007."
While Sasaki doesn't expect a flood of unwinding, he does expect some yen-buying stemming from the new regulations, as the Watanabes unwind their positions to comply with the new rules."
http://www.marketwatch.com/story/short-term-yen-support-is-real-2010-07-14?link=kiosk