Stand united to cooperate in case of complete disruption of gas supplies, which may occur in upcoming weeks
Finalize agreement on solidarity measures to safeguard security of supply between our countries ahead of winter season
This article was written by Ryan Paisey at www.forexlive.com.
„It is desirable that traders seek to minimise imports of Russian gas and diversify the contracts they may hold,“ she told a news briefing.
Spain’s energy minister went on to say that Spain is working on a gas contingency plan for the winter, although it is in a better situation than other EU neighbours.
It must be noted that due in part to Spain’s connections to Africa, Russian LNG only accounted for 11.9% of Spanish gas imports in May off 2022.
This article was written by Ryan Paisey at www.forexlive.com.
Trade Idea (Long EURUSD) with the Following Three Buy Orders for EURUSD:
Average entry price for the EURUSD Long, conditional to all 3 buy orders being filled: 0.9908
Stop Loss: EURUSD at 0.97943 (4.25% higher than average entry price of the EURUSD Long position)
Take Profit: EURUSD at 1.03287 (1.15% lower than average entry price of the EURUSD Long position)
Reward vs Risk Ratio: 3.7 (reward is 3.7 times the risk)
EURUSD Technical Analysis with Price Chart
EURUSD Technical Analysis and Price Chart for Trade Idea
EURUSD Technical Analysis Video and Trade Idea Explained:
Trade any Forex pair at your own risk only. Visit ForexLive.com for out of the box technical analysis and trade ideas found nowhere else.
This article was written by ForexLive at www.forexlive.com.
US energy secretary, Jennifer Granholm, says that:
„We want to put on the table the option of joining a buyers‘ group that will heave greater market power to be able to lower the price, and therefore lower the price of Russian oil and lower the profits to Putin.“
In case you missed it, there were discussions by the US and its allies before this on capping Russian oil at around $40 to $60.
Well, the only thing I can say is that good luck getting India on board. Japan is also somewhat heavily reliant on Russian energy imports but they may be more easily swayed. As for India (and China), I just don’t see it happening.
This article was written by Justin Low at www.forexlive.com.
UPCOMING
EVENTS:
Wednesday:
RBNZ Policy Announcement, BoC Policy Announcement, US CPI.
Friday: US
University of Michigan Sentiment Survey.
The market
focus this week will be entirely on the US CPI data on Wednesday. At the moment
the market expects a 75 bps hike at the July FOMC meeting with some little
pricing of 100 bps. A surprisingly hot CPI will certainly cause pain in the
markets and raise the pricing on the more aggressive 100 bps hike. We may even
see a positioning into the report. But let’s see first the other notable events
coming this week…
On Wednesday
the RBNZ is expected to hike the cash rate by 50 bps bringing it to 2.50%. The
RBNZ already stated that the monetary conditions will need to act as a
constraint on demand and the risk of doing too little too late is worse than
too much too soon (something the Fed is pursuing as well). Finally, the Bank of
Canada is expected to hike rates by 75 bps bringing the rate to 2.25% after the
hot CPI data cemented the more aggressive path.
The US CPI
data is expected to rise 8.7% for the Y/Y figure and 1.0% for the M/M reading
due to high energy and food prices. The Core measure is expected to cool a bit
with 5.7% Y/Y reading and 0.5% for the M/M one. As we saw in the previous
month, the Fed is responding aggressively to any upside surprise in inflation data,
and this means that another hot inflation report will put even more pressure on
them and kick a debate between 75 and 100 bps at the next meeting and no longer
the 50/75 as we’ve been seeing till now. The US Dollar would certainly
appreciate even more in case of an upside surprise.
Finally on
Friday we will get the University of Michigan Consumer Sentiment Survey. The
report is expected to show another dip in consumer sentiment to 49.0 making a
new record low for the series. Such an awful consumer sentiment is of course
really bad for the economy as a whole. The market will focus especially on the
long run inflation expectations as an uptick in the previous report acted as an
extra pressure for the Fed to go for the more aggressive 75 bps hike as Fed
Chair Powell stated himself.
In the
bigger picture, we are clearly in a recessionary cycle coupled this time with a
high inflation that forces the Fed to focus solely on tightening monetary
conditions and disregard economic growth. As of now, we have an equities bear
market, an inverted yield curve, big losses in commodities sensitive to global
growth like copper, a very strong US Dollar, high inflation, an aggressive
tightening by the Fed, consumer sentiment at record low and leading components
in the PMIs in contractionary territory. If this doesn’t scream to you that
we’re in a recession or heading into one, then you must be a very optimistic
person.
If we
weren’t coming off of such a high inflation rate but say a 3% one, then we most
probably would have had the Fed already cutting interest rates. But not this
time. Every cycle is the same except for what’s different. Keep in mind
the bigger picture and avoid being caught in the noise.
This article
was written by Giuseppe Dellamotta.
This article was written by ForexLive at www.forexlive.com.
Bitcoin Trade Idea Chart
Bitcoin Technical Analysis and Trade Idea Video:
Always trade Bitcoin at your own risk only.
Visit ForexLive.com for original technical analysis and interesting trade ideas to consider.
We hope we didn’t ruin any Bitcoin HODLer’s mood.
Mood #bitcoin pic.twitter.com/SBfvqtbCQD
— Paolo Ardoino (@paoloardoino) July 9, 2022
This article was written by ForexLive at www.forexlive.com.
China is in a good position to add some stimulus as inflation runs lower than most parts of the world. That’s exactly what reports suggest they do as 2023 infrastructure spending may be pulled forward.
This article was written by Adam Button at www.forexlive.com.
The Prime Minister’s home was set on fire.
The speaker of the legislature is trying to pull together an all-party government to stabilize the situation. He said President Rajapakse will step down on July 13.
The officials were moved to safe locations in anticipation of today’s protests, which were a sharp escalation of recent demonstrations. The catalyst has been a fuel shortage in the country.
The heavily-indebted country of 22 million has more than $15 billion in dollar-denominated debt and $45 billion overall. It has failed to make payments for oil and gasoline deliveries and that caused severe rationing from the government.
High commodity prices, rising rates and the strong US dollar are a toxic mix for heavily-indebted countries, especially those with large current account deficits. Here’s a ranking of some of the most-vulnerable spots:
Aside from the potential turmoil in these countries, it’s an open question whether similar crisis‘ trigger a broader global growth slowdown. The names at the top of this list are insignificant for global demand but as you go down the list, names like Pakistan, Egypt and Brazil stand out. The one I think that’s inevitably heading towards trouble is Turkey because of its chaotic monetary policy and large current account deficit. Time will tell.
This article was written by Adam Button at www.forexlive.com.
The new EUR/USD trade is from spot with a target of 0.97 and a stop at 1.04. That would be a quick move through parity, perhaps running stops.
„We are recommending a short EUR/USD trade idea to reflect our stronger conviction that the pair will soon break below parity,“ MUFG notes.
We are maintaining a long USD/CAD trade idea to reflect the increasing risk that the CAD will weaken further in the near-term on the back of intensifying fears over a sharper slowdown in global growth.
The target in trade was 1.3400 with a stop at 1.2600.
For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here.
This article was written by Adam Button at www.forexlive.com.
The US jobs report added 372K new jobs in June. That was higher than the 268K estimate. Admittedly, there was a revision of -74K over the last two months (with May revised to 384K from 390K). Nevertheless, if the current month was adjusted for that number, a net addition of 298K (372K – 74K revision) still beats the consensus estimate.
Looking at the other measures within the report, the unemployment rate remained steady at 3.6%. Average hourly earnings rose 0.3% as expected and rose 5.1% vs 5.0% estimate. The participation rate fell to 62.2% vs 62.3% estimate. The U6 underemployment rate came in at 6.7% vs 7.1% estimate.
Overall, the jobs report – barring a huge surprise in the CPI next week which is expected to show 1.1% gain MoM and 0.6% for the core – is likely to lead to another 75 basis point hike by the Fed when their interest rate decision is announced on July 27. That would take the target range to 2.25% to 2.5% which Fed officials called the neutral rate. The expectations are for the path of rate rises to continue into the year end. The Fed’s central tendencies saw the rate at the end of year at 3.4%, which implies an end of year target rate of 3.25% to 3.5%. That sounds about right.
The questions at that point is „What comes after that?“
This week, the major stock indices moved higher with the Nasdaq outperforming with a 4.5% gain. The ARK Innovation fund rose 13.68%. Admittedly it is down -70.66% from it’s high, but is there roam to roam from lower levels. 10% on the current price of $46.86 is $4.68. Getting to $51 or $52 is not a hard hurdle considering the high in 2021 was up at $159.70 and the price traded at that level on April 25th – not so long ago.
In the forex market today, the USD was mixed with gains vs the JPY and CHF and declines vs the EUR, CAD, AUD and NZD. The greenback was little changed vs the GBP. The price action in the forex saw up and down volatility. The dollar moved higher after the jobs report, but then started to give up those gains into the London close. After London traders exited, there was a modest move back higher, but overall the changes on the day were relatively modest with a 0.33% gain vs the CHF and a -0.24 decline vs the EUR the biggest movers.
The strongest to weakest of the major currencies
Overall, the EUR was the strongest of the majors and the CHF was the weakest. The EURCHF was the biggest currency pair mover with a 0.57% gain on the day. Relatively speaking the changes were modest as traders ponder what may have already been priced in.
Nevertheless, it is hard to see a sharp move lower in the dollar going forward given the green light for the Fed to raise rates from both job gains and inflation, while Japan and the EU are still struggling with the idea of tightening, and the UK has political, inflation and European issues to contend with as well.
Next week, the Bank of Canada and the Reserve Bank of New Zealand are still expected to raise their rates by 50 basis points respectively (both announce on Wednesday).
In Canada today, their jobs report was weaker than expected with a decline of -43.2K jobs vs expectations of +23.5K (most in part time jobs at -39.1K and in the service sector). However, the unemployment rate declined to a new record low at 4.9% vs 5.1% estimate as the participation rate fell to 64.9% vs 65.3% with workers leaving the workforce.
In other markets today:
In the US debt market today, yields moved sharply higher as it seems 75 basis points is baked in the cake now
Sad notes this week included the killing of seven in Highland Park, Illinois during a 4th of July celebration parade include the mother and father of a 2-year child, and the assassination of former Japan PM Shinzo Abe while he addressed a crowd. during an election campaign rally in Nara, Japan. In the US gun violence is as common as the sun rising, but in Japan it is rare.
It is easy to become numb and complacent to violence. However, at the end of each bullet there are people with stories and incomplete lives and children and families and sometimes even nations that are denied what they could have done tomorrow, next week, next year and beyond. It is a tragedy that should not happen.
Let’s hope the pendulum starts to swing the other way, at some point and that time is soon. In the meantime, say a prayer for peace and for all the victims who happened to be at the end of a bullets path of destruction.
This article was written by Greg Michalowski at www.forexlive.com.