What Should National Bank Of Hungary Do To Keep EUR/HUF Fixed? | ING Economics

What Should National Bank Of Hungary Do To Keep EUR/HUF Fixed? | ING Economics

ING Economics ING Economics 01.07.2022 16:00
Central and Eastern Europe/EMEA: Our calls at a glance Source: ING National Bank of Hungary Our call: Tightening continues at least until inflation peaks. Rationale: Hungary's central bank has created a cleaner situation by levelling the base rate and the one-week deposit rate at 7.75% in June. The NBH has now hiked by a total of 715bp in 12 months. Despite the largest tightening cycle in the region, Hungarian assets remain under pressure due to political and geopolitical risks. The only realistic point of monetary policy impact remains the currency To keep EUR/HUF stable, the central bank needs to continue its decisive tightening at least until inflation peaks. Our base case is a 50bp increase per month with a terminal rate of 9.25-9.75% in September-October, where we see the highest probability for inflation to peak. Risk to our call: With intensified upside risks in inflation and uncertainties regarding the rule-of-law dispute, we think the risk for interest rates is tilted to the upside. The fulfillment of risks might see new episodes of forint sell-offs, triggering extraordinary interest rate hikes. Peter Virovacz Czech National Bank Our call: Stable rates until the end of this year and the first rate cut in 1H23. Rationale: From 1 July, the CNB will be led by a new Governor, Ales Michl, and a new board. In our view, the central bank will thus undergo a significant transformation from the biggest hawk in the region to the biggest dove. The change in view is also supported by the central bank's expectation that inflation will peak in June. At the same time, we expect continued FX interventions to support the koruna despite the higher cost. We expect the first rate cut in 1H23, earlier than the consensus. Risk to our call: The composition of the new board is the biggest risk that could change our call significantly. For now, we know little about the views of the new governor and board members. Recent statements so far imply a dovish shift, but we don't know to what extent. Moreover, we are skeptical about inflation slowing in the second half of the year, as the CNB expects, due to continuing rising energy and fuel prices. This may ultimately push the new board to raise rates further. Frantisek Taborsky National Bank of Poland Our call: 75bp hike in July to 6.75%, rate hikes continue towards 8.50%. Rationale: After hikes from 0.1% to 6% in June, the NBP governor has switched to a dovish tone, though we still see further hikes despite that. The persistent rise in core CPI points to large second-round effects. Our own survey shows very high inflation expectations (30% of Poles see CPI between 20-40%). Moreover, with more than 3% fiscal stimulus the policy mix only recently turned contractionary. Not only does this mean high CPI, which should peak at 15-20% in 2H22, but also a C/A deficit. It turned from 3% of GDP surplus to 3% deficit and should reach a deficit of circa 5% at the end of 2022. In the coming months, the NBP governor will be sensitive to slowing GDP growth but should keep hiking to contain CPI and prevent Polish zloty depreciation. The zloty fundamentals deteriorated recently. In the short term, inflation fears may soften due to a slower rise in food prices in the summer, but long-term challenges remain and should resurface in 2H22 and the beginning of 2023. Risk to our call: The monetary policy council getting excessively dovish during the summer due to their worries about a GDP slowdown, but the inflationary backdrop in Poland is the worst in the CEE region, which should backfire via a weaker zloty. Rafal Benecki Central Bank of Turkey Our call: Interest rates remain on hold for the rest of the year. Rationale: We have seen some policy moves lately with the objectives of: Putting a break on commercial TRY loan growth. Strengthening FX reserves. Aiming to divert local demand away from FX. Strengthening demand for local government bonds. Increasing the appeal of TRY assets for foreign investors. The CBT has signalled that it will not change its course and continue to use these types of measures rather than a direct policy rate adjustment. Risk to our call: After a pronounced TRY weakness in recent weeks and pressure on reserves, we see a stabilisation in net reserves (excluding swaps) thanks to a wave of measures, particularly impacted by higher FX selling requirements for goods and services exporters, out of their FX revenues. Given there has been no change in policy direction to prioritise inflation and allow a normalisation in real rates, risks to the macro outlook will likely remain a key concern depending on exchange rate developments and higher price pressures. Muhammet Mercan National Bank of Romania Our call: Terminal key rate at 6.00% by the end of 2022. Rationale: The key rate gap versus the CEE3 peers (Poland, Czechia, Hungary) has widened even more since NBR’s last meeting in May. Moreover, the above-expectation GDP numbers are likely to make it easier for the NBR to at least maintain its 75bp hiking pace at the July and August policy meetings, though larger hikes cannot be excluded. However, this would hardly be considered a hawkish surprise as the market perception seems to be that the NBR is still far behind the curve. Risk to our call: The pace of rate hikes in the CEE3 space doesn’t seem to be slowing down and NBR will be forced to follow. On the other hand, eventual rate cuts are less likely to be followed over the next couple of years. Valentin Tataru Read this article on THINK TagsRecession Inflation Central banks Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
How Much Did Bitcoin Lose In The Past Month? Is There Any Sense To Panic About BTC/USD?

How Much Did Bitcoin Lose In The Past Month? Is There Any Sense To Panic About BTC/USD?

InstaForex Analysis InstaForex Analysis 01.07.2022 15:53
Relevance up to 12:00 2022-07-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The worst quarter since 2011, the worst month since Bloomberg began tracking bitcoin in 2010. In June, the cryptocurrency leader lost 41% of its value, and in April-June at 58%. The numbers are colossal, but if you remember the high correlation of the token with the US stock market and the saddest first half of the year since 1970 for American stock indices, you can calm down a bit and take a breath. The most important thing is that Bitcoin survived, and there, you see, we will wait for recovery. Quarterly dynamics of BTCUSD     I have repeatedly emphasized that the main reason for the gigantic decline in the capitalization of cryptocurrencies from $3 trillion in November to less than $900 billion was the Fed's change of mind. The central bank began to move away from monetary stimulus, which saved the US economy from recession and allowed stock indices to reach historic highs. As a result, the S&P 500 fell into a bear market territory, and BTCUSD quotes fell to their lowest levels since December 2020. The fall of the token was facilitated by a number of negative news in the field of the crypto industry. The collapse of the stablecoin TerraUSD, the suspension of accepting funds by the lender Celsius Network, the insolvency of the cryptocurrency hedge fund Three Arrows Capital, the refusal of the US Securities and Exchange Commission to convert Grayscale Bitcoin Trust to an exchange-traded fund, and other negative things worsened the mood of bitcoin fans. Large players are leaving the market, and the crowd is following them. At the same time, history shows that you should not sprinkle ashes on your head. Five times, in 1932, 1939, 1940, 1962, and 1970, the S&P 500 fell 15% or less in the first half of the year, but regained ground in the second half, rising by an average of 24% by the end of the year. Just like then, investor pessimism was on the rise. Now, 72% of Deutsche Bank respondents expect a further fall in the stock index, and 90% believe a recession in the US economy until 2023. At present, against the backdrop of an impending downturn, a V-shaped recovery in the stock market looks unlikely, but if the Fed starts to put on the brakes, it will not bring the federal funds rate to the 3.5% expected by CME derivatives, the situation will change radically. No one knows what the growth of bitcoin will be. If after a 50% drop from April and July 2021, prices quickly recovered to a new peak, then after the collapse that started in December 2017, the token took more than two years to return to stable growth. Bitcoin dynamics         Even though pessimism currently prevails and goes off scale, optimists have not disappeared from the market either. Deutsche Bank expects BTCUSD to rally towards 28,000 by the end of 2022 as the US stock market gradually recovers. Fundstrat considers bitcoin to be a cyclical asset that bottoms out every 90 weeks. If so, then the bottom is not far off. Technically, a 1-2-3 reversal pattern can be formed on the BTCUSD daily chart. In this regard, breaks of fair value at 20,800 and local peak at 22,000 can be used for purchases.   Read more: https://www.instaforex.eu/forex_analysis/315087
Expect EUR/USD Fluctuations! Fed Expected To Hike By 75bp In July. It's Time To Review The Forecast On Fed, BoE, ECB, Riksbank And Bank Of Japan Prepared By ING Economics.

Expect EUR/USD Fluctuations! Fed Expected To Hike By 75bp In July. It's Time To Review The Forecast On Fed, BoE, ECB, Riksbank And Bank Of Japan Prepared By ING Economics.

ING Economics ING Economics 01.07.2022 15:48
As recession fears build, our team outline their forecasts for global central banks Developed markets: Our calls at a glance Source: ING Federal Reserve Our call: 75bp in July, 50bp in September and November before switching to 25bp in December. Rate cuts in 2H23. Quantitative tightening (QT) to continue until rate cuts begin. Rationale: To get inflation down quickly we would ideally like to see the supply-side capacity improve to meet strong demand in the US economy. However, supply chain strains, geopolitics/energy prices, and a lack of suitable workers mean this isn’t likely in the near term. Consequently, the onus is on the Fed to respond aggressively to dampen demand, but moving into restrictive territory means a rising chance of recession. Inflation could fall quickly from early next year, opening the door to rate cuts from summer 2023. Risk to our call: Two-way. On the one hand, the tight labour market continues with rising wages making inflation stickier at high levels. Conversely, the economy reacts badly to rate hikes (the housing market is vulnerable) and recession prompts a lower peak and a more rapid reversal in Fed policy. James Knightley European Central Bank Our call: Rate hikes totaling 100bp before the end of the year. Rationale: Stubbornly high inflation and longer-term inflation projections above the 2% target have made a first rate hike overdue. Still, the very gradual (and slow) approach to normalising when other central banks act more determined and aggressively suggests a still divided ECB. Support within the ECB to end net asset purchases and the era of negative interest rates is strong but views on the timing and pace still differ. With a high risk of the eurozone and US economy falling into technical recession towards the end of the year and inflation coming down in 2023, there will be hardly any room for the ECB to deliver additional hikes in 2023. Risk to our call: A faster and more severe recession could push the ECB to stop normalising after 75bp and could even trigger cuts in early 2023. On the other hand, positive growth surprises and little signs of inflation weakening could motivate the ECB to hike more aggressively this year and bring the refi to 2% in 2023. Carsten Brzeski Bank of England Our call: 50bp rate hike in August, 25bp in September before a pause. Rationale: It's a very close call on August's meeting, and in isolation there's not much in the latest data to suggest the Bank needs to move more aggressively. Core inflation looks like it is at, or close to, a peak (even if the headline will go to 11% in October), while unemployment has stopped falling. But the hawks are clearly worried about recent weakness in sterling, and the prospect of another 75bp Fed hike coupled with the fact that a 50bp rate hike is virtually priced for August, means we narrowly think that's the most likely outcome. Still, a 50bp hike – if it happens – is likely to be a one-off. We're not far from what's arguably neutral interest rate territory now (probably around 2%), and the Bank loses one of its biggest hawks after August, who will be replaced by a more dovish official. We still doubt the Bank rate will go as high as 3% or above, as markets are still pricing. Risk to our call: If the Fed goes even more aggressively, or if core inflation moves unexpectedly higher in the coming months, then we could see more than one 50bp hike and a higher terminal rate. James Smith Bank of Japan Our call: Bank of Japan will maintain an accommodative policy stance. Rationale: CPI will stay above 2% until the end of 2022, but BoJ will downplay it as cost-push-driven inflation that will prove temporary. Market expectations of possible policy changes (at least broadening the long-end yield target) are still alive but are not going to materialise easily for a while. Risk to our call: If signs of wage growth are detected and the sharp yen weakening continues over 135, then the bank could reconsider its policy stance, but that will become more likely when Governor Haruhiko Kuroda retires next April. Min Joo Kang Bank of Canada Our call: 75bp hike in July with 50bp moves in September and October with a final 25bp hike in December. Rationale: The Canadian economy is growing strongly with employment at record levels and inflation running at its fastest rate since January 1983. The Canadian economy’s red hot housing market and strong commodity focus are additional reasons for a strong central bank response. The Bank of Canada is worried about inflation expectations becoming unanchored and is implementing a swift run down in its balance sheet in combination with rapid interest rate increases. Risks to our call: Predominantly to the upside given the positive economic outlook, especially if labour shortages become more of a problem and wage growth accelerates. This would add to upward pressure on home prices, which will also make the BoC nervous. James Knightley Reserve Bank of Australia Our call: A further 25bp hike in July ahead of the 2Q CPI figures, then 50bp in August and another 25bp in September. 25bp hikes per month to the end of the year. Rationale: The RBA found itself way short of where it needed to be (modestly restrictive) once it realised that inflation was not only higher than it had expected but would last longer. New inflation data is not due until after the next RBA meeting in July, so given their pledge to be “data-dependent”, a more cautious 25bp hike is warranted in July, but followed in August by 50bp as 2Q22 inflation is likely to post new year-on-year highs. Hikes should then revert back to 25bp in September. Risk to our call: The RBA may feel that even without new inflation data, it is still sufficiently short of a modestly restrictive rate, that it makes more sense to keep hiking by 50bp in the near term until it reaches 2.5%, and then adopt a more data-dependent approach. Rob Carnell Riksbank Our call: Another 50bp rate hike in September, followed by 25bp in November. Rationale: The Riksbank is concerned that a tight labour market and forthcoming wage negotiations could result in a sustained pick-up in pay growth – and of course it is keeping a wary eye on the ECB's rate hike plans this summer. Swedish policymakers have also only two meetings left this year, compared to four at most other central banks, which means each one needs to count. We expect June's 50bp hike to be matched in September, but we're less sure about November given mounting global growth concerns. Sweden's housing market is also showing some cracks, which may also limit how far the Riksbank is willing to go. Risk to our call: Given the Riksbank itself has signaled it wants to do a third 50bp rate hike in November, the risk is clearly that we get a little more tightening than we're now forecasting later this year. James Smith Norges Bank Our call: 25bp rate hikes at the remaining four meetings this year. Rationale: Higher inflation, aggressive tightening overseas, and a weaker krone prompted a 50bp hike at the June meeting, which came with a pre-commitment to another 25bp move in August. Norges Bank is effectively priming us for 50bp worth of tightening each quarter, but spread across the two quarterly meetings and until the deposit rate reaches the 3% area. With energy prices set to stay supported and the Fed determined for the time being to keep hiking aggressively to get inflation lower, it's hard to argue with Norges Bank's latest policy signals. Risk to our call: If the Fed feels obliged to take the funds rate above 4%, then Norges Bank would probably step up the pace of tightening again. James Smith Swiss National Bank Our call: After the 50bp rate hike in June, a 25bp hike is expected in September and another one at the end of the year is not excluded. Rationale: After years of fighting it, the appreciation of the franc is now considered a positive element by the SNB as it moderates inflationary pressures, which explains the rate hike before the ECB in June. The SNB should therefore continue on its path and raise rates by 25bp in September, especially since we expect the ECB to have hiked by 75bp by then. A further increase at the end of the year would not be illogical to follow the ECB, but a strong Swiss franc could lead the SNB to stop sooner. Risk to our call: A rapid slowdown in the eurozone and rising geopolitical risks could lead to a further appreciation of the Swiss franc, which would limit the number of rate hikes by the SNB. Charlotte de Montpellier Read this article on THINK TagsRecession Inflation Central banks Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
How Strong Will Be USD Supported In July? What Are Possible Scenarios For Fed And What Could Change ING Economics' Forecast Of 75bp Rate Hike?

How Strong Will Be USD Supported In July? What Are Possible Scenarios For Fed And What Could Change ING Economics' Forecast Of 75bp Rate Hike?

ING Economics ING Economics 01.07.2022 15:38
US jobs figures are released next Friday. For us to seriously consider changing our July Fed call we would need to see payrolls growth fall with the unemployment rate moving a couple of tenths higher and wage growth showing signs of stagnating Source: Shutterstock      Expectation of a 75bp rate hike from the Fed is unlikely to change Between now and the 27 July Federal Open Market Committee (FOMC) meeting there are only two US data releases that could potentially prompt us to switch our forecast from a 75bp rate hike to a more cautious 50bp hike. After all, the Fed has made it clear that it is resolutely focused on getting inflation under control so we will either need to see a very weak jobs report, published on 8 July, or, but quite possibly together with, a surprise drop in inflation, out 13 July, that reflects declines in a broad range of categories. Currently, we are expecting inflation to dip only very modestly from its 8.6% rate in May, but given that is two weeks away, the market will be focused on next Friday’s jobs figures. We know that there were around 11 million job vacancies at the last count, equivalent to nearly two vacancies for every unemployed American. This itself should point to a very strong figure for job creation, but the issue is the lack of suitable workers available to fill these positions, hence why wages have been rising so rapidly as firms compete for labour. However, we sense that the plunge in equity markets and the increasing recession talk as the Fed ramps up interest rates, may lead some employers to slow down the rate of hiring. Consequently, we think payrolls may grow somewhere in the 250-300,000 range, down from 390,000 in May, which should still be enough to keep the unemployment rate at 3.6% and wages continuing to tick higher. For us to seriously consider changing our July Fed call we would need to see payrolls growth fall with the unemployment rate moving a couple of tenths higher and wage growth showing signs of stagnating. Even then we would still probably need to see a surprisingly large decline in inflation the following week. Developed Markets Economic Calendar Source: Refinitiv, ING TagsUnited States Federal reserve   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Source: Key events in developed markets next week | Article | ING Think
Russian-Ukrainian War And China-COVID Reality Are Factors, Which, Among Others, Influenced View On Commodities

Russian-Ukrainian War And China-COVID Reality Are Factors, Which, Among Others, Influenced View On Commodities

Ole Hansen Ole Hansen 01.07.2022 15:26
Summary:  The month-long commodity rally hit a major obstacle during the latter part of June as the risk of recession continued to take hold in people’s minds. Selling driven by the need to cut exposure ahead of the summer holiday period across several major trading hubs and macro-orientated funds who bought the rally but now are having second thoughts as the risk of an economic slowdown looms ever larger. In the crosshairs of the weakness we find copper and cotton, two recession sensitive commodities from different sector. The month-long commodity rally hit a major obstacle during the latter part of June as the risk of recession continued to take hold in people’s minds. With the war in Ukraine, China still struggling to find a growth gear amid its controversial zero tolerance approach to Covid outbreaks and the wider world, led by the US responding to the negative impact galloping inflation has on consumers’ propensity to spend, the outlook has indeed worsened.During the past month, the Bloomberg Commodity Index has given back 12%, thereby in month giving back close to half the gains the sector had delivered since last December. As per the table below, steep declines have been seen across all three sectors of energy, primarily due to natural gas, metals, and agriculture. At this point, the level of potential demand destruction remains very unclear. However, there is no doubt that some of the recent froth is currently being taken out of the market. This is partly driven by macro-orientated funds who bought the rally but now are having second thoughts as the risk of an economic slowdown looms ever larger. What happened in June that would justify such a major short or even medium-term reversal of the markets? It all began with the higher-than-expected US inflation print on 10 June leading to the first 75 basis point rate hike in decades. With several additional rate hikes to follow, the market has increasingly started to worry that central banks around the world will continue to raise rates. This will be either until inflation is brought under control or something breaks – the latter being the risk of economies buckling under pressure with recession the consequence. For now, at least one element of inflation, i.e., rising input costs through elevated commodity prices, has started to retreat, thereby supporting a 1.1% drop in two-year forward inflation expectations to 3.6% during the past two weeks alone. A spate of weaker-than-expected economic data from US and signs consumers have started to scale back consumption has resulted in the Atlanta Fed GDPnow model tracking an economic contraction of 1.0% in Q2, which would imply a US “technical” recession of two consecutive quarters of negative real GDP growth. Still, we do not think that the US is heading into a broad-based recession, even as the Fed will likely continue to chase inflation.Natural gas:The two major performance outliers this past month are natural gas in the US and Europe. Stateside, the Henry Hub natural gas contract has slumped by 34% to $5.7/MMBtu as the prolonged shutdown of the Freeport LNG export terminal keeps more gas at home, thereby supporting a faster-than-expected inventory build ahead of the winter peak demand season. The latest twist came after a federal agency said the terminal, accounting for around 20% of US exports, can't restart without written permission from the Biden administration. Last week, some 82 bcf (billion cubic feet) of gas was injected into underground caverns against expectations of 75 bcf. Reduced US export capabilities could not have come at a worse time for Europe where reduced flows on the NordSteam 1 pipeline to Europe has further uprooted the market and driven prices to a demand destructive territory just below €150/MWh ($46.5/MMBtu), around a ten-fold higher price than seen in the run up to last year’s surge. The economic impact on European utilities not receiving the gas they bought under long-term contracts with Gazprom at much lower prices is currently being felt the hardest in Germany, a country whose failed strategy to depend almost exclusively on Russian gas has left many high energy consuming industries exposed.This past week Uniper, a major energy company, was the first to ask for state help after receiving only 40% of the contractual agreed gas volumes from Gazprom since June 16. In order to make up the shortfall they are forced to buy the gas in the spot market at the mentioned very high levels. With the cost on winter gas already trading close to €150/MWh and with storage injections slowing, only an aggressive reduction in demand, either through voluntary or government intervention will prevent the risk of blackouts this winter.Crude oil:Crude oil and fuel products remain rangebound and after recording their first, albeit small, monthly loss since last November, and some questions are being raised about the sector’s ability to withstand additional recession-focused selling. We still believe – and fear – that worries about demand destruction will be more than offset by supply constraints. OPEC+ met this week and agreed another small production hike at a time where the group is already trailing their own production target by 2.7 million barrels per day. Having completed the reversal of output cuts made at the start of the pandemic in 2020, the market will focus on what lies ahead, but with most producers being close to maxed out, we are unlikely to see a surprise additional supply response. The weekly inventory report from the US Energy Information Administration showed US crude stockpiles, despite massive injections from Strategic Petroleum Reserves (SPR), falling to their lowest seasonal level since 2014 while stocks at Cushing, the important delivery hub for WTI crude oil futures dropped to 21.3 million barrels, are also the lowest since 2014. The negative market impact, however, came from finished motor gasoline supplied data which showed that US demand for gasoline is succumbing in a more substantial way to record-high gasoline prices after showing a counter-seasonal decline. In the short term, we will see a battle between macroeconomic focused traders selling “paper” oil through futures and other financial products as a hedge against recession, and the physical market where price supportive tightness remains. A battle that for now and during the upcoming peak summer holiday period when liquidity dries out may see Brent crude oil trade within the established range between $100 and $125.Gold and silverGold traded below $1800 for the first time in six weeks with focus now on key support around $1780. The weakness being driven by a combination of a stronger dollar, the market pricing in lower forward inflation driven by rate hikes, recession worries reducing the overall appetite for commodity exposure, and after India, the world’s number 2 consumer, increased import taxes. In addition, silver has slumped below $20, dragged lower by continued weakness across industrial metals, especially copper. Faced with these multiple headwinds, investors are reducing their exposure in ETFs while speculators are adding short positions through futures. Reasons for holding gold, such as the hedge against stagflation, geopolitical and financial market risks, have not gone away, but for now with the summer holiday and low liquidity season upon us, investors are scaling back more than gearing up. Source: Saxo Group Copper and cotton crushedBehind the mentioned big drop in US natural gas we find copper and cotton as the biggest losers in June. These two commodities from a different sectors are often used as barometers of the health of the global economy. The level of demand for copper given its use in electrical wiring and cotton in clothing are two key components that drive global growth, and with rising concerns about a global recession, both have been attacked by sellers, either getting out of long or into short positions as a hedge against further macroeconomic deterioration. While copper crashed below levels not seen since early 2021, cotton hit a nine-month low, some 32% below the May peak, with Covid-hit China seeing lower demand. Against these challenging demand developments, the outlook for supply also worsened after the percentage of US crops being rated good to excellent dropped to just 37% versus 52% a year ago.Once the dust settles, copper is likely to attract fresh demand, not least because China is showing fresh attempts to ease lockdowns while the level of available stocks held at warehouses monitored by the two major exchanges in London and Shanghai remain near the lowest in decades. Not a healthy starting point from any signs of a renewed pickup in demand.HG Copper extended its slump following the recent break below support at $3.95/lb with the focus now on the next key level of support at $3.50/lb. Source: Saxo Group Source: WCU: Copper and cotton crushed on galloping recession fears | Saxo Group (home.saxo)
How Have Precious Metals Reacted To The US Inflation Data?

How Have Precious Metals Reacted To The US Inflation Data?

Monica Kingsley Monica Kingsley 01.07.2022 14:55
S&P 500 might be getting a little ahead of itself in the very short-term – the price decline looks in need of some really brief consolidation. Bonds have likewise paused, and the retreat in Treasury yields that I told you about would happen first, is unfolding. The 10-year one closed below 3%, and with the focus slowly but surely to shift some more from inflation to the deteriorating real economy and job market, I‘m expecting yields to decline still (before turning up longer term again). The Fed hasn‘t yet pivoted – and for the next couple of sessions won‘t. - but the pressure on raising rates by much, is slowly receding Precious metals (and copper) don‘t like the retreat in inflation data (PCE deflator) and inflation expectations – coupled with the real economy prospects, these are to suffer, with gold being relatively, relatively most resilient (which wouldn‘t protect it from declining of course). Unlike crude oil where I remain of bullish persuasion when it comes to the two possible correction scenarios described earlier (the fight for $108.50 talked yesterday, is on). Yesterday, I got an interesting question on what actual value retail traders provide to the markets. If you‘re also wondering, have a look at my take in the first and second part of the reply – it‘ll resonate. In connection with the Nov 12, 2021 legal update on my homepage, the key main hearing is to continue shortly. Demanding event involving long travels – I’ll be issuing only brief updates for the nearest 5 trading days. I won’t be able to provide any analyses, updates or many Twitter activities between Jul 11-15. Looking forward for my return to serving you on Jul 18! Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook The caption says it all – S&P 500 is pausing somewhat, and looking for the next short-term direction – the lower knot I wrote above yesterday, materialized. Consolidation of the steep turn to the downside that I caught for you, is in order. Credit Markets Bonds are taking a break in the strong risk-off posture, and that‘s likely to coincide with the reprieve in stocks. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
FX: This Pair May Shock Investors! GBP/USD - Forecast And Analysis For British Pound To US Dollar

FX: This Pair May Shock Investors! GBP/USD - Forecast And Analysis For British Pound To US Dollar

InstaForex Analysis InstaForex Analysis 01.07.2022 14:54
Relevance up to 23:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Let's look at how well the British pound sterling has performed when paired with the US dollar since the market ended trading for the first month of summer yesterday, as you are probably aware. But first, a little background on the oldest period. Naturally, trading every month is impossible due to the enormous price fluctuations and the challenging nature of identifying the best entry and exit moments. However, it is important to consider the candle that appears, its closing price, and the maximum and lowest values following each close of monthly trading. All those mentioned above can assist in understanding the course's future path at the beginning of the month. Monthly     Last month, the pound experienced intense selling pressure and dropped as far as 1.2000. The GBP/USD pair did, however, manage to find solid support at 1.1932, after which it entered the correction phase. As a result, the June auction ended at the price of 1.2174, and the candle's lower shadow was rather remarkable. If you look at the history, and the monthly chart is ideal for this, you can see that the pair has frequently established strong support at about 1.2000, following which it has sprinted in the direction of the north. The same thing occurred in 2020, 2019, and 2017. Although the pair fell as low as 1.1410 in 2020, it was able to significantly cut losses by closing the March candle of this year at 1.2412. I want to reiterate that the pound is one of the most volatile currencies and has the potential to experience the greatest falls and the highest ups. The primary interest rate has been raised by the Bank of England numerous times, but the pound has not benefited from these increases. The market's complete disregard for the British Central Bank's hike in the primary interest rate is astonishing. However, nothing in the market is unexpected or impossibly difficult. You should constantly be ready for everything and not pass out when making some extremely powerful motions. The ending of July at 1.2000, and much more so below 1.1932, will significantly help players decrease the rate, according to the technical picture on the most senior timeframe. Only after a genuine breakdown of the resistance levels of 1.2600 and 1.2665 is an upward scenario viable. Daily     The pound/dollar currency pair rose throughout yesterday's trade, and the start of the higher dynamics was close to another significant and crucial technical mark of 1.2100. Today, when this piece is being finished, the opposite image is visible; the pair is trading lower and is once more attempting to move below the level of 1.2100. Despite the MACD indicator's positive divergence, it is not advantageous for players to drive up the exchange rate. The "Briton" cannot raise his head because of the potential negative consequences. But it might occur at any time. I won't disguise the fact that I anticipate that the pound will still be able to change the direction of trade in a pair with the US dollar in its favor despite the already significant decrease and the daily bullish divergence of the MACD indicator. However, I'm not recommending making any purchases; instead, you should wait for strong indications and do it weekly. It's not the most enjoyable activity to sell on the approach to the historical, technical, and psychological level of 1.2000. Therefore, I advise keeping away from the GBP/USD market for the time being.   Read more: https://www.instaforex.eu/forex_analysis/315071
What's Ahead Of Bank Of Korea And KRW? Korea: Exports Growth Reached 5.4%, But It's Predicted To Go Up Because Of Simmering IT Demand And Better Situation In China

What's Ahead Of Bank Of Korea And KRW? Korea: Exports Growth Reached 5.4%, But It's Predicted To Go Up Because Of Simmering IT Demand And Better Situation In China

ING Economics ING Economics 01.07.2022 14:44
Although Korea’s exports growth decelerated in May, it is expected to rebound to double-digit growth in the short term as China’s lockdown measures are eased and idiosyncratic negative factors are resolved June saw a temporary slowdown in port activity due to trucker strikes earlier in the month 5.4% Exports %YoY Higher than expected Korea's exports rose in June Export growth slowed to 5.4% year-on-year in June (vs. 3.8% market consensus) from 21.3% in May, partly due to adverse calendar effects and a temporary slowdown in port activity due to trucker strikes earlier in the month. We therefore expect a positive technical payback in the coming months. Global IT demand still appears strong, and the recent relaxation of China’s lockdown measures should normalise the supply bottleneck for exports. Trade balance stayed in the deficit zone for the third consecutive month Source: CEIC The details suggest that underlying export momentum remained healthy Six out of 15 major export items recorded gains in June. Petroleum exports grew the most with an 81.7% increase, while overall IT exports, including semi-conductors (10.7%), wireless communication devices (10.6%), and computers (9.6%), remained solid. Meanwhile, automobiles (-2.7%), auto parts (-3.8%) and machinery exports (-11.7%) showed a particularly weak performance as the industries most affected by the recent strikes. By export destination, exports to ASEAN (16.7%) and the US (12.2%) rose firmly, suggesting the global demand recovery is continuing. However, exports to China (-0.8%) and the Commonwealth of Independent States (CIS) dropped on the back of China’s lockdown and the Ukraine war. More specifically, exports to Russia and to Ukraine contracted -64.9% and -72.3% respectively. Imports increased by 19.4% YoY in June (vs. 32.0% in May) mainly due to higher import commodity prices. Three major energy imports – crude oil, gas, and coal – rose 53.4%. The rapid growth of imports led to a trade deficit for the third consecutive month. In June, the deficit widened to US$2.5bn from $1.7bn in May. We think that Korea’s trade balance will remain in the deficit zone for quite some time by the end of the year. Implications for the Korean won and the Bank of Korea The Korean won (KRW) has been fluctuating around the 1300 level but could extend its rise over the near-term, then possibly rise further in 3Q22. As the KRW is highly correlated to global growth expectations, recent market fears over a US recession will remain a major driver of the KRW depreciation. In addition, in a situation where the trade deficit is expected to continue for the time being, this will act as a factor hindering the appreciation of the won. We think that the Bank of Korea will look more closely at the pace of the devaluation and the driving force behind it, rather than the KRW level itself. But, the prolonged trade deficit will be used as a factor supporting interest rate hikes for the Bank of Korea. Terms of trade vs KRW Source: CEIC Read this article on THINK TagsKorean Won Korean trade Exports Bank of Korea Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

How to convert USD to GBP? Maybe it's time to use our online currency converter?

With our currency converter you're able to check exchange rates of many currencies.

Examples of available currency pairs.

What is Forex?

Forex is an abbrevation for Foreign Exchange. This market is decentralized and works 24/5. Forex contains trading of two assets - a pair of currencies or a pair of currency and a commodity or a precious metal. All of transactions are based on CFD.

100 EUR To USD | What Is Forex?

CFD Meaning:

CFD is an abbreviation for Contract For Difference. In a simplified way it means that you're not an owner of certain asset and transactions are based on the exchange difference.

What are Forex pairs?

We can distinguish forex major pairs, minor pairs and exotic currency pairs.

Forex major pairs are: EUR/USD (EUR To USD), USD/JPY (USD To JPY), GBP/USD (GBP To USD).

Forex minor pairs are: EUR/GBP (EUR To GBP), NZD/USD (NZD To USD), EUR/CHF (EUR To CHF), CAD/JPY (CAD To JPY).

Sample pairs: GBP To INRJPY To USDGBP To AUDJPY To HKDGBP To TRYAUD To USD

It's good to...

follow European Central Bank (ECB), Federal Reserve (Fed) and Bank of England (BoE) decisions as they might affect exchange rates.

The Dollar Index (DXY) should arouse our interest as well.

Take care of your financial skills:

Get familiar to the terms of Technical Analysis and Fundamental Analysis.

Many of us wonders what to invest in. Have a look at Forex section, but have in mind, that FXMAG.COM isn't only about currencies. You're welcomed to visit CryptoStock Markets and Gaming sections to discover many ways of investing.

Do you want to invest in gold and silver? There's a Precious Metals section waiting for you!

For those considering real estate investing, have a look at this section.

Modern investors might want to invest in Bitcoin, Ether, other Altcoins or invest in Amazon, but markets are so diversed nowadays. There are a lot of stocks to buy.

Investing money? You're surely familiar to terms like inflation. Watch CPIPPI and other indicators to make proper decisions. ECBFed or other national banks' decisions of e.g. tightening monetary policy can affect currencies, precious metals and other instruments. Having that in mind, we should watch interest rates.

Important financial terms:

Trend Lines, Bull Market, Bear Market, All Time High (ATH), Fluctuation, Candlesticks.

Trending in investing:

Tesla (TSLA), Solana (SOL), Apple (APPL), Altcoins

Check out our LinkedInFacebook and Twitter!

Join our group on Facebook!