Fundamental Analysis

Technical Analysis 14th August

Daily Forex Market Preview, 14/08/2018 The U.S. dollar index was seen trading flat on Monday with the technical pattern confirming a doji close. A bearish follow through from here on could signal a near-term correction. Economic data for the day was sparse. Still, the Turkish lira continued to plunge dragging down the euro currency rather briefly. Economic data today will start with ...

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Central bank minutes to guide interest rate expectations

  The past week in the markets has been dominated by dramatic, and often incongruent, moves that have been marked by still-buoyant volatility in the aftermath of the preceding week’s wild market swings. Through the course of the past week, equity markets rebounded sharply, paring much of the losses that were suffered when stock indexes briefly entered into correction territory ...

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FTSE and pound in for busy week amid UK earnings and data

The FX, equity and commodity markets have started the new week fairly quietly. In fact, this week looks set to be a quieter one for global macroeconomic data releases and other fundamental events. The Presidents’ Day in the US means Wall Street will be shut for trading today while Chinese investors will be away until Thursday in celebration of the ...

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Sterling Longs Down By 50% As Market Pares Back Upside Exposure

Non-Commercials reduced their net long positions in the Euro last week selling 14k contracts to take the total position to 127k contracts. Traders have reduced their upside exposure in EUR for two consecutive weeks now as traders have reacted cautiously to ECB comments which have noted the impact of a weaker US Dollar. Main focus this week will be on ...

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Oil Under Pressure As OPEC Raises Oil Supply Forecast for 2018

oil

The oil market remains under pressure this week following the latest report, where OPEC raises oil supply forecast stating it expects supply to surge over 2018. While the group acknowledges that oil demand is set to rise over the year, it expected rising US output to cause a disproportionate rise in oil supply. The latest OPEC report showed that production among ...

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Bond Yields Relative to Equity Indices

Bonds

One key metric I am watching is the extent to which US bond yields have risen relative to the S&P500 index. The chart shows the SP500 / 10-year yield ratio falling to its lowest level since March 2017: Here is what it means and imply: The sell-off in equity indices is surpassing the selloff in bonds (advance in bond yields), ...

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Stocks Threatened by Bonds

Stocks Threatened by Bonds

We could engage in a long fundamental discussions as to whether the 45% increase in US 10 year bond yields of the past five months to its highest level in four years (2.83%) will introduce a considerably higher risk premium to stocks valuation. Some could argue that depends on sectors, size of companies’ capitalisation, profitability and cash balances. Others will ...

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US Stock Markets Suffer Shock Collapse, Here’s Why

US Stock Markets

After a fairly quiet start to 2018, the stock markets suffer shock collapse as the S&P 500, the benchmark US equities index, suffered its biggest fall in six years and the Dow Jones suffered its biggest ever one-day decline. The sell-off was sparked by a surge in interest rates linked to stronger growth and rising inflation. Investors are increasingly expecting ...

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