Is It Worth Adding Gold to Your Portfolio in 2022?

Is It Worth Adding Gold to Your Portfolio in 2022?

Arkadiusz Sieron Arkadiusz Sieron 17.02.2022 16:29
  Gold prices declined in 2021 and the prospects for 2022 are not impressive as well. However, the yellow metal’s strategic relevance remains high. Last month, the World Gold Council published two interesting reports about gold. The first one is the latest edition of Gold Demand Trends, which summarizes the entire last year. Gold supply decreased 1%, while gold demand rose 10% in 2021. Despite these trends, the price of gold declined by around 4%, which – for me – undermines the validity of the data presented by the WGC. I mean here that the relevance of some categories of gold demand (jewelry demand, technological demand, the central bank’s purchases) for the price formation is somewhat limited. The most important driver for gold prices is investment demand. Unsurprisingly, this category plunged 43% in 2021, driven by large ETF outlfows. According to the report, “gold drew direction chiefly from inflation and interest rate expectations in 2021,” although it seems that rising rates outweighed inflationary concerns. As the chart below shows, the interest rates increased significantly last year. For example, 10-year Treasury yields rose 60 basis points. As a result, the opportunity costs for holding gold moved up, triggering an outflow of gold holdings from the ETF. As the rise in interest rates is likely to continue in 2022 because of the hawkish stance of the Fed, gold investment may struggle this year as well. The end of quantitative easing and the start of quantitative tightening may add to the downward pressure on gold prices. However, there are some bullish caveats here. First, gold has remained resilient in January, despite the hawkish FOMC meeting. Second, the Fed’s tightening cycle could be detrimental to the US stock market and the overall, highly indebted economy, which could be supportive of gold prices. Third, as the report points out, “gold has historically outperformed in the months following the onset of a US Fed tightening cycle”. The second publication released by the WGC last month was “The Relevance of Gold as a Strategic Asset 2022”. The main thesis of the report is that gold is a strategic asset, complementary to equities and bonds, that enhances investment portfolios’ performance. This is because gold is “a store of wealth and a hedge against systemic risk, currency depreciation, and inflation.” It is also “highly liquid, no one’s liability, carries no credit risk, and is scarce, historically preserving its value over time.” Gold is believed to be a great source of return, as its price has increased by an average of nearly 11% per year since 1971, according to the WGC. Gold can also provide liquidity, as the gold market is highly liquid. As the report points out, “physical gold holdings by investors and central banks are worth approximately $4.9 trillion, with an additional $1.2 trillion in open interest through derivatives traded on exchanges or the over-the-counter (OTC) market.” Last but not least, gold is an excellent portfolio diversifier, as it is negatively correlated with risk assets, and – importantly – this negative correlation increases as these assets sell off. Hence, adding gold to a portfolio could diversify it, improving its risk-adjusted return, and also provide liquidity to meet liabilities in times of market stress. The WGC’s analysis suggests that investors should consider adding between 4% and 15% of gold to the portfolio, but personally, I would cap this share at 10%.   Implications for Gold What do the recent WGC reports imply for the gold market? Well, one thing is that adding some gold to the investment portfolio would probably be a smart move. After all, gold serves the role of both a safe-haven asset and an insurance against tail risks. It’s nice to be insured. However, investing in gold is something different, as gold may be either in a bullish or bearish trend. You should never confuse these two motives behind owning gold! Sometimes it’s good to own gold for both insurance and investment reasons, but not always. When it comes to 2022, investment demand for gold may continue to be under downward pressure amid rising interest rates. However, there are also some bullish forces at work, which could intensify later this year. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Gores Guggenheim Stock News and Forecast: Is GGPI a better bet than LCID or RIVN?

Gores Guggenheim Stock News and Forecast: Is GGPI a better bet than LCID or RIVN?

FXStreet News FXStreet News 17.02.2022 16:10
GGPI Stock has rallied after a Superbowl ad. GGPI stock surges another 4% on Wednesday as momentum remains high. GGPI may struggle as markets turn negative and growth stocks struggle to hold gains. Gores Guggenheim (GGPI) stock is probably more commonly referred to as Polestar stock now that the SPAC will take electric vehicle maker Polestar public this year. The deal is due to complete some time in the first half of 2022. Polestar is an electric vehicle maker backed by Volvo and Chinese company Geely. So what is different about this one compared to the others? Gores Guggenheim Stock News Polestar looks merely like Volvo's EV division. We know this is not the case as Volvo has its hybrid and EV models planned. However, the companies certainly have strong links. Rivian (RIVN) went public in a blaze of hype and publicity due largely to its links to Amazon (AMZN) and Ford (F). Both companies had stakes in Rivian. However, from what we know, Rivian will have to build out its manufacturing and distribution network. It will not piggyback on Ford for this. Polestar uses the Volvo service network in the UK, and Polestar will utilize Volvo's South Carolina plant to manufacture Polestar models in the US. Previously, Polestar said it will have its showrooms in the US but use Volvo for servicing. Polestar will look to do as much sales work as possible online and use Volvo then for manufacturing and servicing. This gives it an obvious advantage over LCID and RIVN. Gores Guggenheim Stock Forecast On Wednesday, the stock spiked again, closing nearly 5% higher at $12.02. The company has been in charge since the Superbowl ad brought more attention to the stock and the cars. Both seem well received. Now GGPI stock has ramped up to a strong resistance area. Above $12 and as high as $12.36 is the previous spike high from December. This will be tough to break given that high risk stocks are likely to suffer as we close out the week. Geopolitical events are dominating and high growth names are still not favored. SPACs generally hold $10 cash until the deal goes through, so this is obvious support. The best strategy with SPAC trading is to try and buy as close to $10 as possible. GGPI 1-day chart
Decentralized Autonomous Organisation - Another Addition To Our Personal Dictionaries

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Investors spooked by renewed geopolitical tensions

FXStreet News FXStreet News 17.02.2022 16:10
Bitcoin price gets caught in a bearish triangle as tensions in Ukraine flare up again. Ethereum price returns to pivotal support, money repatriation goes into the second day. XRP price in pennant ready for a bearish breakout under the current sentiment. Cryptocurrencies are on the back foot as investors are getting worried about the escalating situation between Ukraine and Russia, as more reports come in from shots in the Donbas region near Luhansk. As the situation does not seem to de-escalate, investors are pulling their money out of what was believed to be the start of a solid and longer-term relief rally that is stalling at the moment. With more downside pressure to come, expect all significant cryptocurrencies to fall back to supportive pivotal levels. Bitcoin price falls into a bearish triangle, set to dip back below $40,000 Bitcoin (BTC) price is getting battered on Thursday after a fade on Wednesday that could still be attributed to some short-term profit-taking. The extension of the falls seems to confirm that sentiment is yet again dipping below zero towards risk-off. Investors pulling out their funds preemptively is reflected with the sharp decline in the Relative Strength Index, where the sell-side demand is outpacing the buy-side demand. In this context, Bitcoin price will remain under pressure for the rest of the week and could be set to slip below $40,000 in the coming days as the situation in Ukraine is set to deteriorate again, potentially inflicting further damage to the market mood. BTC price sees bulls unable to hold price action above $44,088 and in the process is forming a descending trend line that, together with the base at $41,756, is forming a bearish triangle. Expect Bitcoin valuation to decline further as the tensions around Luhansk increase by the hour. Once the $41,756 support is broken, the road is open for a nosedive towards $39,780 with the $40,000 psychological level broken yet again to the downside. BTC/USD daily chart A hail mary could be provided by the 55-day Simple Moving Average at $42,340, which already provided support on February 9 and February 15. With that move, a sudden breakthrough in the peace talks could become the needed catalyst to improve the situation and dislocate Bitcoin price action from the drag of the geopolitical news that is weighing. Bitcoin would see the demand on the buy-side blow up and see a big pop above $44,088. Ethereum bulls are breaking their jaws on the 55-day SMA as the price fades further Ethereum (ETH) price is getting crushed against the 55-day Simple Moving Average (SMA) around $3,143, with bulls unfit to push and try to close price action above it. After three failed attempts in a row, it is becoming clear that the bullish support is wearing thin as, on Tuesday, the daily candle closed above there, and even if the next day ETH price opened above again, it closed below the 55-day SMA. On Wednesday, finally, both the open and the closing price were below the 55-day SMA. This proves that sentiment has shifted in just three trading days and looks set to fade further away from the 55-day SMA on Friday. Expect going forward in the next coming hours that bulls will get squeezed against the wall at $3,018 with both a pivotal level and the $3,000 marker a few dollars below there. As tensions mount, expect some more negative headlines, a breach in defense of the bulls with even the monthly pivot at $2,929 getting involved in the crosshairs. Depending on the severity and the further deterioration of the political situation in Ukraine and the correction in the stock markets, it is possible to see a nosedive towards $2,695. ETH/USD daily chart Global market sentiment is hanging on the lips of Ukraine and the geopolitical situation. With that, it is clear that once the situation gets resolved or de-escalates, markets can shift 180 degrees in a matter of seconds. That same rule applies to cryptocurrencies where Ethereum could pop back above the 55-day SMA and even set sail for $3,391, breaking the high of February and flirting with new highs for 2022. Bulls joining the rally will want to keep a close eye and be mindful of the RSI, as that would start to flirt with being overbought and, from there on, limiting any further big moves in the hours or next trading days to come. Ethereum short squeeze could trigger a spike to $4,000 XRP price set to lose 10% of market value as headline news breaks down relief rally Ripple (XRP) price is stuck in a pennant and is close to a breakout that looks set to be a bearish one. As global markets are continuing the fade from Wednesday, XRP price is breaking below the recent low and sees bears hammering down on the ascending side of the pennant. As more negative headlines cross the wires, expect this to add ammunition for bears to continue and start breaking the pennant to the downside. XRP price will look for support on the next support at hand, which comes in at $0.78, and depending on the severity of the news flow, that level should hold again as it did on February 14. If that is not the caseany further downside will be cut short by the double bottom around $0.75 from February 12 and 13 and the 55-day SMA coming in at or around that area. With that move, the RSI will be triggering some "oversold" red flags and see bears booking profit. XRP/USD daily chart A false bearish breakout could easily see bears trapped on entering on the break to the downside out of the pennant as bulls go in for the squeeze. That would mean that price shoots up towards $0.88 and takes out this week's high. Bears would be forced to change sides and join the buy-side demand to close their losing positions, adding to even more demand and possibly hitting $0.90 in the process. XRP set to explode towards $1.00, bulls hopeful over SEC vs Ripple case
Bearish Turn Coming

Bearish Turn Coming

Monica Kingsley Monica Kingsley 17.02.2022 15:57
Thanks to Fed minutes, the S&P 500 closed modestly up, but could have taken the stronger credit markets cue. Instead, the upswing was sold into – the selling pressure is there, and neither value nor tech took the opportunity to rise, even against the backdrop of a weakening dollar. That‘s quite telling – the stock market correction hasn‘t run its course yet, and whatever progress the bulls make, is being countered convincingly. Precious metals adored the combo of yields and dollar turning down – and reacted with the miners‘ outperformance. The silver to copper ratio is basing, and the white metal looks to have better short-term prospects than the red one. Still in the headline sensitive environment we‘re in, gold would be stronger than silver until inflation is recognized for what it is. If there‘s one thing that the aftermath of Fed minutes showed, it‘s that the commodities superbull is alive and well, and that precious metals likewise are acting very positively in this tightening cycle. Suffice to say that gold has a track record of turning up once the rate hikes finally start… Excellent, the portfolio is positioned accordingly. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 rebound is getting suspect, and should stocks close on a weak note today, it‘s clear that today‘s wobbling Philly Fed Manufacturing Index won‘t be balanced out by the succession of Fed speakers – the signs of real economy headwinds are here. Credit Markets HYG upswing could have had broader repercussions, and it‘s quite telling it didn‘t. The risk-on turn would likely be sold into, with consequences. Gold, Silver and Miners Precious metals suffered a temporary setback only indeed – I‘m looking for the gains to continue as the miners outperformance just can‘t be overlooked. Crude Oil Crude oil dipped some more, and the dip was again bought. Given the late session wavering, I‘m looking for some more sideways and volatile trading ahead before the upswing reasserts itself. Copper Copper continues trading sideways, but with bullish undertones. More consolidation before another upswing attempt is probable. Bitcoin and Ethereum Cryptos are turning down, but still haven‘t broken either way out of the current range. Both Bitcoin and Ethereum are sending a message of caution. Summary S&P 500 bulls‘ opportunity seems increasingly slipping away given that the buyers couldn‘t defend gains after Fed minutes release. The upturn in credit markets is likely to prove of fleeting shelf life, and would exert downward pressure upon stocks. As I wrote yesterday (and talked extensively within today‘s article chart captions), the commodities bull is likely to carry on with little interference – and so would the precious metals bull as the yield curve keeps compressing, and the beginning of rate hikes would mark further headwinds for the real economy at a time of persistent inflation that could be perhaps brought down to 4-5% official rate late this year (which would leave the mainstream wondering why it just isn‘t transitory somewhat more – what an irony). The Fed‘s tools to be employed are simply insufficient to break the inflation‘s back, that‘s it. 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.
US IPO Activity Chart

US Seems To Be Unsure If Russia Ceased Actions, Gold Goes Up

Marc Chandler Marc Chandler 17.02.2022 13:03
February 17, 2022  $USD, Australia, Canada, Currency Movement, Japan, Norway, Oil, Russia Overview: US intelligence claims that Russia is still mobilizing for an attack on Ukraine is sapping risk appetites and lifting gold to its highest level since last June around $1885-$1890.  Asia Pacific equities advanced, except in Japan.  Europe's Stoxx 600 is nursing a small loss, while US futures are off around 0.4%-0.6%.  The 10-year US Treasury yield is hovering slightly above 2.0%.  European benchmark yields are 2-4 bp lower.   The Scandis and euro are bearing the brunt of the risk-off move among the major currencies, while the Antipodeans, yen, Swiss franc, and sterling have pushed higher.  Emerging market currencies are mostly lower, led by Russia and central European currencies, but the JP Morgan Emerging Market Currency is edging higher for the fourth consecutive session, recovering from earlier weakness.  Hungary left its one-week repo rate steady at 4.3% and Turkey is expected to also stand pat (14%).   April WTI is retracing most of yesterday's 1.8% gain and is straddling $90 a barrel.  US natural gas is falling for the first time this week.  Europe's benchmark is up about 10% since Tuesday's 16% slide.  Iron ore slumped 7% after it rose 3.2% yesterday.  Copper is slipping for the first session in four.  Asia Pacific Japan reported weaker than expected exports and stronger than expected imports drove the trade deficit to JPY2.19 trillion. It was a third larger than expected.  Seasonally, Japan's January trade balance always (20-years-plus) deteriorated from December.  Yet, there is something more going on.  Rising energy and commodity prices more generally are deteriorating Japan's terms of trade.  It shares that with the eurozone that reported its largest trade deficit in 13 years earlier this week. EMU's trade balance also typically deteriorates in January from December, but surge in energy prices appears to have aggravated the seasonal pattern.  Meanwhile, nearly every day that passes now means that a significant disruption of Russia's gas supplies could have a diminishing impact on Europe as spring approaches.  Australia's jobs market held up better than expected last month.  It created almost 18k jobs.  The market expected a flat report.  The positions created were all part-time posts, while full-time positions fell by 17k after increasing 41k in December.  Australia grew an average of almost 3 full-time jobs last year after losing a little more than 8k a month in 2020.  While the unemployment rate was steady at 4.2%, the participation rate ticked up to 66.2% from 66.1%.  The virus (sick-leave) and extended time-off (vacations) saw the hours worked fall 8.8% month-over-month.  Australia's employment report is unlikely to impact expectations.  The market continues to price in the first hike around mid-year.  Rather than ratify market expectations, the central bank continues to pushback.  The US dollar slipped through JPY115.00 for the first time since February 7.  The low was recorded in early European turnover.  The intraday momentum indicators are stretched, but a break of the JPY114.90 could see JPY114.60.  There is an option for nearly $1.1 bln struck there that expires today.  The JPY115.20 area may offer the immediate cap.  The Australian dollar was initially sold from around $0.7210 down to $0.7150 before finding good bids.  It recovered back to session highs before stalling.  It is straddling the $0.7200 area in late morning turnover in Europe, leaving it little changed on the day.   The greenback briefly and shallowly slipped through CNY6.33 and rebounded to almost CNY6.34.  For the third session in a row, the PBOC set the dollar's reference rate a little softer than expected (CNY6.3321 vs. CNY6.3325, median projection in Bloomberg's forecast).   Europe The US claims that rather than withdraw troops as previously reported, Russia has mobilized another 7k troops.  Moscow denies it.  Russia is involved in military exercises.  The operations in the Crimea appeared to have ended, but the ones with Belarus are expected to last through the weekend. It seems like Russian troop movement next week may be more telling.  The G7 foreign ministers are meeting on Saturday.   NATO chief Stoltenberg's term ends in October.  He will serve out his term before heading home to lead the central bank.  Norges Bank Olsen's term ends next month.  Deputy Governor Ida Bache who vied for the top job will act as interim head until Stoltenberg is ready.  The Norges Bank Governor also leads the $1.3 trillion sovereign wealth fund.  Last month, the central bank signaled its intention to hike rates in March.  The swaps market has 100 bp of tightening priced in over the next 12 months.   The euro was sold slightly through $1.1325 in Asia after holding below $1.14 yesterday.  The $1.1380-$1.1400 area looks to still cap upticks. The 1.7 bln euro in options struck in the $1.1435-$1.1450 area look set to roll-off today.  If uncertainty over Russia's intentions is a negative for the euro, the narrowing of the US two-year premium over Germany for the third consecutive session is a supportive development.  Sterling is bid.  It is trading above $1.36, which it has not settled above in nearly a month. The intrasession high this month was set near $1.3645.   The UK reports January retail sales tomorrow and a bounce is expected after January's large fall.  The euro has fallen to back to around GBP0.8350 near where it bottomed on Monday.  America How prices respond to fundamental news is often revealing.  Yesterday, the US reports stronger than expected January retail sales and industrial output figures.  But the two-year yield fell five basis points and the implied yield of December Fed funds futures contract shed 4.5 bp.  The two-year yield is another 3.5 bp lower today and is about 1.5 bp lower on the week (slightly above 1.48%).  With today's five basis point slippage, the December Fed funds futures implies an average effective yield of 1.53% at the end of the year, which is about 6.5 bp lower than where it finished last week after the US warned of a possible Russian attack on Ukraine in days.  Europe, Russia, and Iran are seemingly more optimistic than the US a deal with Iran may be near. With OPEC+ struggling to fulfill their commitments to boost output by 400k barrels a day and low inventories among many of the large consuming countries, new supply from Iran would help ease address the global shortage that has lifted price to almost $100 a barrel.  Saudi Arabia is believed to have about 2 mln barrels a day in spare capacity is reluctant to jeopardize the six-year agreement under the OPEC+ framework. The US EIA reported an unexpected build of US oil inventories yesterday, but Cushing saw an almost 2 milt barrel draw.  The US reports January housing starts and permits.  Both are expected to have softened but remain at historically elevated levels.  Although adverse weather may have impacted starts, the concern is rising rates and commodity prices (e.g., March lumber has risen by around 25% this month alone) will weaken demand.  The US also sees the Philadelphia Fed's manufacturing survey and weekly initial jobless claims.   Canada's January CPI surprised on the upside yesterday.  The 5.1% year-over-year headline pace was the highest since 1991, while the monthly increase of 0.9% was the largest since January 2017.  Gasoline prices rose 3.2%, meat jumped a little more than 10%, and homeowner equivalent expenses jumped 13.5%.  The Bank of Canada is set to hike rates on March 2.  The market has about a 1-in-3 chance of a 50 bp move discounted.  For about a week, the US offered a premium over Canada for two-year money, but it slipped back into a discount yesterday and is a little larger today.  Oil is firmer, but the general risk-off mood, given the uncertainties in Eastern Europe, weighs on the Loonie.  Meanwhile, the Canadian police have sent written warnings to hundreds who decamped in Ottawa.  It appears to be a prelude to arrests. The US dollar remains confined to a CAD1.2650-CAD1.2660 to CAD1.2800 trading range.  It approached the lower end of the range yesterday and is checking out the air above CAD1.27 near midday in Europe.  The greenback finally took out the 200-day moving average against the Mexican peso.  It is trading at its lowest level since last October (~MXN20.25-MXN20.26).  There is little chart support ahead of MXN20.12.  Still, the intrasession momentum indicators are stretched, warning against chasing it in early North American activity.    A bounce can carry the dollar back to the MXN20.30-MXN20.33 area.     Disclaimer
Focusing On US CPI, Fed, Commodities and Bank Of Japan - Saxo Market Call

We Might Say Next FED Moves Are Not Obvious As Some Factors Differentiate Circumstances

Althea Spinozzi Althea Spinozzi 17.02.2022 12:45
Bonds 2022-02-17 12:15 Summary:  We believe that it will be nearly impossible for the Federal Reserve to avoid a tantrum in credit markets. If the central bank doesn’t do enough to fight inflation, markets will face the possibility of an inflation tantrum. However, we might face a taper tantrum if it is too aggressive in tightening the economy. The recent acceleration in real yields, the spike in the MOVE index, and the widening of the HY-IG spread indicate we might not be far from a widespread selloff in credit markets. We recommend investors remain cautious as we approach the March FOMC meeting. It has arrived the time to consider the possibility of an upcoming tantrum in credit markets. Since the beginning of the year, junk has overperformed quality as interest rate risk eroded value faster than credit risk. Bonds with higher duration, hence better-rated credits, have dropped in value faster than bonds with lesser duration. Triple C credits lost only -3.29% year-to-date, while investment-grade bonds fell nearly double. However, credit risk perception might change as monetary policies become more aggressive, and financing conditions tighten fast.Source: Bloomberg and Saxo Group. The Fed’s posture is clear: inflation needs fighting. According to markets, that will be possible only through an aggressive interest rate hiking schedule, possibly combined with a balance sheet runoff. It means that interest rates will continue to rise, contributing to a capital loss in older bonds as prices fall below par. At the same time, we’ll see the issuance of new bonds with bigger coupons in the primary market. The faster that happens, the bigger the tantrum. High inflation makes a key difference compared to the macroeconomic backdrop during the 2013 taper tantrum. Inflation is a threat to the bond market as it erodes the present value of fixed coupon and redemption payments. Therefore, the central bank needs to hike rates to avoid an inflation tantrum. However, suppose the central bank does too little to fight inflation. In that case, bonds will lack protection against it, and markets will need to raise their future rate hike bets, creating the conditions for a selloff. Yet, if the Fed is too aggressive in tightening the economy, it might result in a taper tantrum anyway. Thus, the Federal Reserve is walking a fine line, and a tantrum is nearly inevitable as monetary policy can be too much or too little aggressive at markets’ discretion. Real yields are one of the best tools to forecast a tantrum. As the central banks prepare for a tightening cycle, nominal yields will inevitably surge, while breakeven rates will adjust lower, accelerating the rise of real yields.  One can argue that real yields remain in deeply negative territory, leaving financing conditions still highly loose. However, that was also the case in 2013, but things started to go south as real yields accelerated their rise to 0%. We could say that the 2013 taper tantrum was all due to an acceleration in real yields.Source: Bloomberg and Saxo Group. Now that real yields rose above -0.5% and the probability of a 50bps rate hike in March is growing, it’s inevitable not to forecast an acceleration in real yields around the Fed’s March meeting. Such a rate hike is likely to tighten financing conditions quickly and it might provoke a tantrum within risky assets as it happened in 2013. Other elements suggest we might not be too far off from a tantrum. On Tuesday, the MOVE Index rose to the second-highest level since the 2013 taper tantrum and the highest since the beginning of the Covid pandemic. The move index is the “fear index” for the bond market, like the VIX index is for equities. During the 2013 Taper Tantrum, it peaked at 117, while now it's shy of 100.Source: Bloomberg and Saxo Group. Another helpful metric to look at is the spread between high-yield and investment-grade corporate bonds. Despite the spread between the two remains low compared to pre-pandemic levels, it has widened substantially since the beginning of the year. If the spread continues to widen, it would be an indication that investors start to reconsider credit risk, as they would sell junk to buy high-grade corporates.Source: Bloomberg and Saxo Group.
Equities Of Europe Are Under Pressure

Speaking Of nVidia Stock, S&P500 (SPX), The Conflict In Eastern Europe And GBP State

Swissquote Bank Swissquote Bank 17.02.2022 10:42
Good mood didn’t last long as the US didn’t let the tensions de-escalate insisting that Russia is certainly not pulling back its troops but is rather increasing its presence at the Ukrainian border. The US warning hit the investor appetite at yesterday’s session and reversed the earlier week gains in stock indices. As a result, the safe have flows boosted gold, again, as crude oil remained steady around the $92 per barrel. US equities were soft but the S&P500 erased a part of losses at a late-session rally after the release of the Federal Reserve (Fed) minutes, the pricing on the fed funds front flipped to give more chance for a 25bp hike in March, instead of a 50-bp hike. In the FX markets, the US dollar remains strong, while the pound-dollar is eking out gains above the 1.35 mark as the high inflation in the UK keeps the Bank of England (BoE) hawks in charge of the market. Bitcoin is pointed as a risk to the global financial stability, as Fidelity launches Europe's cheapest Bitcoin ETP. In the individual stocks, Nvidia’s strong results didn’t boost the share price in the afterhours trading, Virgin Galactic couldn’t extend Tuesday’s days on worries that they may have some execution problems sending people to the moon and Roblox tanked 26% on softer results. Watch the full episode to find out more! 0:00 Intro 0:28 Ukraine update 1:22 Gold up, but gains vulnerable 1:54 US equities fine with the hawkish Fed minutes 3:38 Sterling gains on soaring inflation expectations 4:54 Cryptocurrencies: a risk to financial stability? 6:04 Why strong results don't boost appetite in Nvidia? 7:35 Why the space travel doesn't seduce investors? 8:34 And why Roblox is not in a good place to reverse losses? Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
Russia And Ukraine Are Still Interacting. Are Markets Likely To Await Next Geopolitical Events?

Russia And Ukraine Are Still Interacting. Are Markets Likely To Await Next Geopolitical Events?

Alex Kuptsikevich Alex Kuptsikevich 17.02.2022 09:43
The Ukrainian crisis is not likely to recede into the background anytime soon. Promising Russian statements about the withdrawal of troops are refuted by the West and Ukraine, near where the exercises are taking place. There was also a series of accusations and denials about the shootout in Donbas in the morning, which triggered impulsive selling of risky assets. The local momentum of the markets' decline was less than what we saw on Friday following Biden's statements about Russia's impending attack on Ukraine. Still, the latest news clearly shows that we should not hope for smooth and quick exhaustion of the conflict and a favourable resolution in the coming days. So far, however, there are more signals that Eastern European politicians still want a diplomatic, not forceful solution, which forms a modest reduction in the pull towards security. The Fed was also on the side of the stock market bulls yesterday. The published minutes of the January meeting were not as hawkish as investors had expected. The FOMC at the end of last month did not consider a 50-point rate hike in March and did not talk about the need for seven hikes this year. Then we had the labour market report, which showed strong growth in employment and wages, and even later came frightening figures about inflation accelerating to 40-year highs. Yesterday the retail sales figures were added to it. Americans bought harder than expected in January, and some observers attribute that to a rush of demand due to inflation fears and a spike in auto and apparel prices. The Fed might revise its view to a more hawkish one after bullish reports, but the markets did breathe a sigh of relief, managing to pull the S&P500 and Russell2000 into the green at the end of Wednesday. Meanwhile, the S&P500 and Dow Jones continue to struggle behind the 200-day moving average, with no victory signals for the bulls or the bears in this local battle. Investors and traders should pay close attention to this struggle, as a sharp pullback to one side or the other could set the direction for the days and weeks ahead.

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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.

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

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