geopolitics

The EU is feeling the threat of Chinese electric vehicles and has announced an investigation into Chinese subsidies of its car industry extending the geopolitical fragmentation game from semiconductors to electric vehicles. This naturally makes it more difficult for carmakers to operate but also for investors to predict the long-term winners in EVs and as such we suggest investors increasingly look into the expanding and sprawling ecosystem around EVs.

 

Key points in this equity note

  • The EU is engaging in a “war” against Chinese electric vehicles on the ground of heavy Chinese subsidies extending the geopolitical fragmentation game from semiconductors to electric vehicles.

  • If electric vehicles develop into a trade war then it will be even more difficult to predict which carmakers will win the future of electric vehicles. As a result we suggest that investors go look for opportunities in the growing ecosystem around electric vehicles.

 

The fragmentation games evolves f

Russian Rouble (RUB) Has Been Supported By Local Moves, But Is Under Geopolitical Pressure Now

Russian Rouble (RUB) Has Been Supported By Local Moves, But Is Under Geopolitical Pressure Now

Alex Kuptsikevich Alex Kuptsikevich 14.02.2022 09:28
The strengthening of the ruble was interrupted on Friday as geopolitical factors again came to the forefront, pushing aside the fundamental and long-term factors that supported the ruble. The Bank of Russia did everything in its power to support the Russian currency: the rate was raised by 100 points to 9.5%, investors were warned of further increases, and the pause in foreign currency purchases for the Finance Ministry was extended. Nevertheless, before the weekend, investors again preferred to reduce the risks of owning Russian assets against the background of the fact that several Foreign Ministries of different countries called on their citizens to leave Ukraine. For the markets, this is a signal that a new round of geopolitical tensions and the negotiations in the outgoing week did not bring the long-awaited agreement. Against the backdrop of news about geopolitics, the RTS index lost more than 4.6%, and the Moscow Exchange fell by 3%. It seems that the Russian market will have to experience the convulsions of geopolitics more than once for at least another week. Fixing the ruble above 76.40 per dollar and 86.60 per euro will mean that the period of corrective rollback of the ruble has come to an end, and we need to prepare for a new wave of growth. But this is from the standpoint of technical analysis. In practice, geopolitics now rules the roost, where détente can be as fast as escalation. At the same time, fundamental factors (high rates of the Central Bank, expensive oil, and a pause in foreign currency purchases) continue to play on the side of the ruble. These factors promise to return the ruble to the path of growth very quickly, repeating the dynamics of the previous two weeks. If we are right, then the ruble may remain in an upward trend until the end of February, rushing to the area of 71 per dollar and 83 per euro by the end of the month.
Technical Analysis: Moving Averages - Did You Know This Tool?

S&P 500 Chart - There's A Big Red Candle On The Right Hand Side

Monica Kingsley Monica Kingsley 14.02.2022 16:24
S&P 500 opening range gave way to heavy selling as 4,470s didn‘t hold. Risk-on was overpowered, and the flight to Treasuries didn‘t support tech. And that‘s most medium-term worrying – stocks don‘t look to have found a floor, and gave up the opportunity for a tight range trading on Friday all too easily. The prospects of war were that formidable opponent, against which the S&P 500 didn‘t really stand a chance. So, the downtrend has reasserted itself, and HYG doesn‘t look to have found a floor – junk bonds are leading to the downside, with energy, materials and financials standing out, which isn‘t exactly a bullish constellation. The other key beneficiaries of the safe haven bid were gold, miners and oil. Silver lagged as copper retreated all too easily, but I‘m looking for that to change. As for Monday‘s session in stocks, the odds of a countertrend move to the upside, at least intraday, are good. Just a quick glance at the dollar, gold, oil and Bitcoin would reveal the extent of possible stabilization. Stabilization, not a reversal, because HYG is unlikely to turn up, and I‘m not looking for stocks to start moving up again. Thursday marked a high point in the countertrend rally, which was cut short after some 5 days only. Sideways to a little up is the best the bulls can hope for on Monday. Funny though how with all eyes on Eastern Europe, the inflation and steep rate hike bets receded? What a Super Bowl! Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Whatever backing and filling there could have been, the S&P 500 didn‘t hesitate, and is pointing to the downside. The bears are back, and aren‘t yielding. Credit Markets Credit markets went decidedly risk-off, and a little sideways reprieve wouldn‘t be surprising. But it would change nothing as the bets on rising rates, are on, and the 2-year Treasury is forcing the Fed‘s hand. Gold, Silver and Miners Miners and gold came alive on the tensions escalation news – the uptrend is alive and well indeed, even without these geopolitical developments. The upswing wasn‘t really sold into. Crude Oil Crude oil correction came to an abrupt close, and it‘s unlikely black gold would dip in the current environment. The upcoming corrections would be bought as much as the previous one, and given the oil stocks performance, wouldn‘t likely reach far to the downside. Copper Copper is under pressure, and not holding up as well as other commodities. Base metals though are breaking higher, which is why I‘m looking at Friday‘s red metal trading as a temporary setback only. Bitcoin and Ethereum The floor in cryptos is heralding a tight range day – it‘s good for risk-on that Friday‘s downswing isn‘t immediately continuing, it‘s buying some time. Summary S&P 500 bears are back in the driver‘s seat, and the rush to Treasuries took the spotlight off rate hikes – to a small degree. Not that the Fed would be changing course on geopolitics, we aren‘t there yet. To the contrary, credit markets are pressuring the central bank to move – as decisively as possible in the overleveraged system – and Powell would find it hard not to deliver. Come autumn latest, the strain on the real economy would be hard to ignore – real estate is feeling the pinch already. Stock bulls can‘t expect higher prices unless tech recovers, and we look to be still far from that moment. Real assets with safe haven appeal are likely to do best, and the same goes for the dollar temporarily too. 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.
Oil influences FTSE 100 as it reaches 7611 GBP, USDJPY chasing 115.00

WTI pulls back sharply from Monday’s multi-year highs near $96.00, back to the $91.00s as geopolitical risk premia eases

FXStreet News FXStreet News 15.02.2022 16:09
WTI has pulled back sharply on Tuesday from Monday’s multi-year highs near $96.00 and is back in the $91.00s. Fears of an imminent Russian invasion into Ukraine have eased as Russia withdraws some troops, weighing on oil prices. Oil prices have pulled back sharply from Monday’s multi-year highs, with front-month WTI futures now trading back to the south of the $92.00 level, down about $3.0 per day and more than $4.0 below Monday’s multi-year highs near $96.00. Press reports about a withdrawal of troops on the Ukrainian border to their bases has spurred a rebound in risk appetite and reduction in demand for safe havens on Tuesday. Such flows could have further legs in wake of remarks from Russian President Vladimir Putin who just said that a decision on partial troop withdrawal had been taken. For oil, tentative signs of de-escalation have triggered profit-taking as geopolitical risk premia is reduced somewhat, though Western nations and NATO remain highly concerned that Russia maintains the option for a near-term attack. One theme to watch is that Russian President Vladimir Putin might imminently recognise the independence of the Luhansk and Donetsk People’s Republics (LPR and DPR), both breakaway regions of Ukraine located in the East. Western officials have criticised Russia’s State Duma for voting in favour of the recognition, which would break the Minsk Agreement designed to implement a ceasefire in the Ukraine civil war. Geopolitical strategists fear that Russia might create a false pretext for military action against Ukraine by rekindling violence in the East, with a recognition of LPR and DPR independence a potential step in this direction. For now, WTI traders will remain on tenterhooks and trading conditions will remain choppy/headline-driven. Near-term WTI bears will likely eye an imminent test of an uptrend that has been supporting the price action for the whole of 2022 thus far in the $90.00s. A break below this could see oil prices swiftly move back under $90.00 and hit support in the form of last week’s lows in the mid-$88.00s. Aside from Eastern European geopolitics, oil traders will also be keeping an eye on upcoming private weekly US oil inventory data at 2130GMT, as well as indirect US/Iran nuclear negotiations, which continue to rumble on in the background.
Oh, Someone Has Stopped Brent Oil Price From Going "Out Of Range"

Oh, Someone Has Stopped Brent Oil Price From Going "Out Of Range"

Alex Kuptsikevich Alex Kuptsikevich 18.02.2022 13:20
Gold and oil, former beneficiaries of geopolitical tensions late last week, have gone their separate ways, with the former rising 2.4% and the latter losing 5% since the start of this week. Brent crude rolled back below $90 and, at one point on Friday, was losing 2.3% to $89, despite still worrying reports of tensions around Ukraine and Russia. It has fallen below the local support of the past ten days and is now just one step away from a decline since the start of the month. While geopolitics remains a joker capable of playing, either way, the macroeconomic picture is working to cool the oil price. US commercial oil inventories rose last week against a seasonally typical decline. As a result, inventories are now 10.9% lower than a year earlier, although it was -15% in mid-January. Production stagnated at 11.6m b/d, but at the end of last week, there was an increase in the number of operating oil rigs from 497 to 516. New data will be released later this evening. Probably, we will see more evidence that producers have stepped up production, convinced of the strength of demand and record profits in many years at their disposal. Locally, the activation of extractive companies is playing into the price pullback from current levels. However, it is a factor in slowing price growth in the longer term, but not a failure. The vector of monetary policy is also worth paying attention to. Rising rates often derail speculative growth in oil. We saw the last two examples on this theme in 2014-2015 when oil collapsed by 75%, and in 2018, it fell by 45%. After those hard lessons, OPEC+ has worked much more closely to meet quotas, so we are talking about a correction rather than a new bear market for oil. Speaking of a local correction, we assume a pullback in the Brent price to the $85 area. That is the peak area in October last year and September 2018 and close to the 38.2% Fibonacci retracement level of the rally from December to mid-February. Deeper drawdowns are also possible if monetary tightening coincides with geopolitical détente and slowing demand. In that case, Brent might briefly correct towards $80. Positive signals on the Iran deal are also factors holding oil back. An agreement with Iran would signal an easing of some of the geopolitical tensions in the Middle East and add around 1% to the global energy system, allowing the resulting shortfall to be digested and a smooth return to restocking for the world.
Gold Price Analysis: XAU/USD underpinned above $1900 as Russia/Ukraine crisis escalates

Gold Price Analysis: XAU/USD underpinned above $1900 as Russia/Ukraine crisis escalates

FXStreet News FXStreet News 22.02.2022 15:58
After hitting fresh multi-month highs at $1914, spot gold is consolidating above $1900 as the Russia/Ukraine crisis escalates.As traders worry about the rising risk of a full-scale Russian military incursion into Ukraine, gold will likely remain supported.As the Russia/Ukraine crisis continues to escalate, most recently with Russia recognising the independence of and moving troops into two separatist regions in eastern Ukraine, prompting NATO nations to announce/prepare new sanctions on Russia, gold has moved back above $1900. Spot prices (XAU/USD) hit fresh multi-month highs at $1914 on Tuesday and, though pulling back from these highs printed during Asia pacific trade as dip-buying facilitating an intra-day rebound in global equities markets, has remained above the key $1900 level.With market participants nervous that Russia/pro-Russia separatists in Eastern Ukraine could initiate further hostilities against Ukraine, thus further escalating the risk of an all-out Ukraine/Russia conflict, gold is likely to remain well underpinned this week. Brent oil spiked to close to $100 per barrel on Tuesday and EU natural gas prices were up sharply as Germany pledged not to approve the Nord Stream 2 pipeline that would bring gas directly to Germany from Russia. The upside risks posed to global inflation from any continued spike in energy prices as a result of further Russia/Ukraine crisis escalation is likely boosting demand for gold as an inflation hedge.Recent Fed speak and US data releases have not had much of an impact on gold in recent days as price action takes its cue from geopolitics. Hawkish commentary from Fed’s Michelle Bowman on Monday, who essentially said she was still undecided as the whether the Fed should hike rates by 25 or 50bps in March, was roundly shrugged off. That suggests that other Fed speak this week is also likely to be ignored, or, at least, play second fiddle, with this also likely the case for Friday’s January US Core PCE inflation data. Ahead of that, traders should keep an eye on upcoming US PMI and CB Consumer Confidence surveys, both the flash readings for February.
It Begins

It Begins

Monica Kingsley Monica Kingsley 24.02.2022 16:00
S&P 500 reprieve that wasn‘t – the buyers didn‘t arrive, and the overnight military action sparking serious asset moves, shows that buying the dip would have been a bad idea. And it still is. Risk-on assets are likely to suffer, and I‘m not looking for a sharp, V-shaped rebound. The partial retracement seen in cryptos wouldn‘t translate to much upside in paper assets – it will likely be sold into as the bottom would take time to form. The safe haven premium seen in precious metals, crude oil and other real assets would ebb and flow, but a higher base has been established. The world has changed overnight, and recognition thereof is still pending.I think it‘s clear why I had been derisking as much as possible, wary of volatility both ways in paper assets, and betting instead on a mix of real assets. This has been hugely paying off to subscribers and readers likewise favoring gold and crude oil with some copper added for good measure.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookThis isn‘t how an S&P 500 bottom looks like – downswing continues with more volatility ahead.Credit MarketsHYG is going down again, and credit markets are turning risk-off – look for Treasuries to do relatively better next, with little impact upon stocks.Gold, Silver and MinersPrecious metals fireworks continue, and the upswing got a poweful ally. Whatever retracement seen next, would be marginal in light of the developments.Crude OilCrude oil upswing can be counted on to continue, and oil stocks would remain among the best performing S&P 500 pockets. Black gold is though notorious for its wild volatility, and the coming days won‘t be an exception.CopperCopper upswing would take time to develop, especially now – but the breakout in base metals is on, the inflationary messaging is still there and thriving.Bitcoin and EthereumCryptos aren‘t in a rally mode, but are attempting to put in a low. I don‘t think it would hold, the dust hasn‘t settled yet.SummaryS&P 500 is plunging, and attempting to base, but more selling would inevitably hit. The overnight dust hasn‘t settled yet, but the panic lows would not happen today. Even if it weren‘t for geopolitics, stocks were in rough waters for weeks already, in a serious, yields and liquidity driven correction, with a slowing real economy on top. For all the short-term focus, the buying opportunity would materialize only once the Fed turns – by autumn 2022. The best places to be in right now, are those presented below – precious metals and commodities – as inflation fires continue to rage on.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.
Russian Invasion: Ukraine's government could collapse sooner, markets would see relief rally

Russian Invasion: Ukraine's government could collapse sooner, markets would see relief rally

FXStreet News FXStreet News 24.02.2022 16:16
Russia is attacking Ukraine on multiple fronts, including in Kyiv. A collapse of the Ukrainian government could allow Putin to order a retreat. The West's sanctions may keep oil prices bid, but markets could recover from the current downfall.The Russian army is accelerating its offense in Ukraine – and undoubtedly moving faster than Western diplomats, scrambling to agree on sanctions. Markets have woken up to a dark day of war and have reacted rapidly. However, a quick end to major hostilities could trigger a relief rally. At least a partial one.Reports from Kyiv show various plumes of smoke from inside and outside the city and Russian helicopters coming from Belarus. The conflict is far more than a "peacekeeping mission" in Ukraine's east.Events are moving fast and there is massive disinformation at times of war. Ukraine declared martial law and seems determined to fight back and halt the advance of Russian troops – but it could be beyond them. Some 190,000 troops – some rebels and mostly Russians – are on the move, attacking Ukraine on various fronts. Russian President Vladimir Putin's aim is to bring about the collapse of the government in Kyiv, which leans toward NATO and the EU. Overwhelmed by Russian firepower, cyberattacks, and propaganda, leaders in Ukraine could capitulate – at least to prevent further bloodshed. If Putin manages to defenestrate the Ukrainian government and install his puppets, he could announce "Mission Accomplished" and move some of the troops back home. While a long-term insurgency would follow, the world could move away from focusing on the conflict. If sanctions remain tame and threats on NATO countries subside, there could be a relief rally. Stocks and risk currencies would have room to rise, while gold – which has benefited from speculation and exuberance – would fall. The safe-haven yen, which is more sensitive to geopolitics than to other worries, would retreat. Oil would depend on European sanctions – would the West disconnect from Russia? In that case, petrol prices would surge. However, if energy is excluded, there is room for a gradual decline.
Silver Price Analysis: XAG/USD consolidates just below $25.50 eyeing breakout to fresh multi-month highs

Silver Price Analysis: XAG/USD consolidates just below $25.50 eyeing breakout to fresh multi-month highs

FXStreet News FXStreet News 03.03.2022 16:07
Silver is consolidating close to multi-month highs not far below $25.50 as markets remain intensely focused on the Ukraine conflict. Technicians have noted that spot silver prices have over the last few days formed an ascending triangle. Upcoming tier one US data releases (ISM Services on Thursday, NFP on Friday) will play second fiddle for geopolitics. Spot silver (XAG/USD) prices are consolidating close to multi-month highs with the $25.50 per troy ounce mark for now acting as resistance, but ongoing nervousness about the ongoing Ukraine conflict and its economic impact underpinning the safe-haven metal for now. At current levels in the $25.30s, spot silver trades broadly flat on the day, with focus for now on talks between Ukrainian and Russian delegations in the hopes that some sort of ceasefire might be in the offing. Given maximalist demands still being made by Russian President Vladimir Putin on Tuesday, demands which the Ukrainian government is very unlikely to accept, hopes that a broad ceasefire agreement can be reached are slim. That suggests no end in sight for the rally in the prices of commodities exported by Russia (oil, gas, various agricultural products and base metals), which will likely keep assets deemed as offering inflation protection in demand (like silver). Technicians have noted that spot silver prices have over the last few days formed an ascending triangle, a pattern that is more often than not indicative of a bullish breakout. Technical buying on a break above the $25.50 could dovetail nicely with the fundamentals if the Ukraine conflict continues to intensify and Western nations are expected to continue tightening the sanctions noose around Russia’s neck. Silver can move aggressively and some bulls likely have their sights set on mid-2021 highs in the $28.00 area. With focus so heavily on geopolitics, upcoming tier one US data releases (ISM Services PMI on Thursday and the official jobs report on Friday) and the second day of Fed Chair Jerome Powell’s testimony before the US Congress will take something of a back seat. Powell explained on Wednesday that current uncertainties regarding the impact of the Ukraine war would not deter the Fed from getting moving regarding removing policy stimulus. An expected strong jobs report on Friday should support this stance and probably won’t dent silver’s near-term appeal much.
Ringing the Bell

Ringing the Bell

Monica Kingsley Monica Kingsley 09.03.2022 16:03
S&P 500 once again gave up intraday gains, and credit markets confirmed the decline. Value down significantly more than tech, risk-off anywhere you look. For days without end, but the reprieve can come on seemingly little to no positive news, just when the sellers exhaust themselves and need to regroup temporarily. We‘re already seeing signs of such a respite in precious metals and commodities – be it the copper downswing, oil unable to break $130, or miners not following gold much higher yesterday. Corn and wheat also consolidated – right or wrong, the market seeks to anticipate some relief from Eastern Europe.The big picture though hasn‘t changed:(…) credit markets … posture is very risk-off, and the rush to commodities goes on. With a little check yesterday on the high opening prices in crude oil and copper, but still. My favorite agrifoods picks of late, wheat and corn, are doing great, and the pressure within select base metals, is building up – such as (for understandable reasons) in nickel and aluminum. Look for more to come, especially there where supply is getting messed with (this doesn‘t concern copper to such a degree, explaining its tepid price gains).And I‘m not talking even the brightest spot, where I at the onset of 2022 announced that precious metals would be the great bullish surprise this year. Those who listened, are rocking and rolling – we‘re nowhere near the end of the profitable run! Crude oil is likely to consolidate prior steep gains, and could definitely continue spiking higher. Should it stay comfortably above $125 for months, that would lead to quite some demand destruction. Given that black gold acts as a „shadow Fed funds rate“, ......its downswing would contribute to providing the Fed with an excuse not to hike in Mar by 50bp. After the prior run up in the price of black gold that however renders such an excuse a verbal exercise only, the Fed remains between a rock and hard place, and the inflationary fires keep raging on.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 is reaching for the Feb 24 lows, and may find respite at this level. The upper knot though would need a solid close today (above 4,250) to be of short-term significance. Remember, the market remains very much headline sensitive.Credit MarketsHYG clearly remains on the defensive, but the sellers may need a pause here, if volume is any guide. Bonds are getting beaten, and the outlook remains negative to neutral for the weeks ahead. Gold, Silver and MinersPrecious metals keep doing great, but a pause is knocking on the door. Not a reversal, a pause. Gold and silver are indeed the go-to assets in the current situation, and miners agree wholeheartedly.Crude OilCrude oil is having trouble extending gains, and the consolidation I mentioned yesterday, approaches. I do not think however that this is the end of the run higher.CopperCopper is pausing already, and this underperformer looks very well bid above $4.60. Let the red metal build a base, and continue rising next, alongside the rest of the crowd.Bitcoin and EthereumCryptos upswing equals more risk appetite? It could be so, looking at the dollar‘s chart (I‘m talking that in the summary of today‘s analysis).SummaryEvery dog has its day, and the S&P 500‘s one might be coming today or tomorrow. It‘s that the safe havens of late (precious metals, commodities and the dollar) are having trouble extending prior steep gains further. These look to be in for a brief respite that would be amplified on any possible news of deescalation. In such an environment, risk taking would flourish at expense of gold, silver and oil especially. I don‘t think so we have seen the tops – precious metals are likely to do great on the continued inflation turning into stagflation (GDP growth figures being downgraded), and commodities are set to further benefit from geopolitics (among much else).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.
Not Passing Smell Test

Not Passing Smell Test

Monica Kingsley Monica Kingsley 10.03.2022 16:01
S&P 500 tech driven upswing makes the advance a bit suspect, and prone to consolidation. I would have expected value to kick in to a much greater degree given the risk-on posture in the credit markets. The steep downswing in commodities and precious metals doesn‘t pass the smell test for me – just as there were little cracks in the dam warning of short-term vulnerability at the onset of yesterday, the same way there are signs of the resulting downswing being overdone now.And that has consequences for the multitude of open positions – the PMs and commodities super bull runs are on, and the geopolitics still support the notion of the next spike.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 turned around, and the volume isn‘t raising too many eyebrows. However, the bulls should have tempered price appreciation expectations, to put it politely...Credit MarketsHYG turned around, but isn‘t entirely convincing yet. We saw an encouraging first step towards risk-on turn that requires that the moves continue, which is unlikely today – CPI is here, and unlikely to disappoint the inflationistas.Gold, Silver and MinersPrecious metals downswing looks clearly overdone, and I continue calling for a shallow, $1,980 - $2,000 range consolidation next. This gives you an idea not to expect steep silver discounts either. Miner are clear, and holding up nicely.Crude OilCrude oil downswing came, arguably way too steep one. Even oil stocks turned down in spite of the S&P 500 upswing, which is odd. I‘m looking for gradual reversal of yesterday‘s weakness in both.CopperCopper has made one of its odd moves on par with the late Jan long red candle one – I‘m looking for the weakness to be reversed, and not only in the red metal but within commodities as such.Bitcoin and EthereumCryptos are giving up yesterday‘s upswing – they are dialing back the risk-on turn and rush out of the safe havens of late.SummaryThe S&P 500 dog indeed just had its day, but the price appreciation prospects are not looking too bright for today. With attention turning to CPI, and yesterday‘s „hail mary decline aka I don‘t need you anymore“ in the safe havens of late (precious metals, crude oil, wheat, and the dollar to name just a few) getting proper scrutiny, I‘m looking for gradual return to strength in all things real (real assets) – it‘s my reasonable assumption that the markets won‘t get surprised by an overwhelmingly positive headline from Eastern Europe at this point. Focusing on the underlying fundamentals and charts, I don‘t think so we have seen the real asset tops – precious metals are likely to do great on the continued inflation turning into stagflation (GDP growth figures being downgraded), and commodities are set to further benefit from geopolitics (among much else).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.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Crypto Prices: Bitcoin (BTC) Gained 1.4%, ETH Increased By 3.1%, Polkadot (DOT) Went Up By 4.5% And Terra Decreased (-6%)

Alex Kuptsikevich Alex Kuptsikevich 16.03.2022 08:30
BTC added 1.4% over the past day to $39.3K. Attempts to develop an offensive ran into a selling wall. The most important line of defense in the first cryptocurrency at the 38.0K area is still more confident withstanding all bear attacks. Ethereum added 3.1% to $2.6K in 24 hours. Other leading altcoins range from a 6% decline (Terra) to a 4.5% rise (Polkadot). According to CoinMarketCap, the total capitalization of the crypto market grew by 1.4%, to $1.75 trillion. The Bitcoin Dominance Index lost 0.1 percentage points to 42.6%. Cryptocurrency fear and greed index added 3 points to 24, although it remains in the territory of "extreme fear". The FxPro Analyst Team mentioned that during the Asian session, there was a sharp jump in the rate from $39.2K to $41.7K, followed by an almost equally rapid pullback to the area below $39.0K. Stop orders were triggered in the morning low-liquid market, but it is clear that the selling pressure remains huge. In fact, since February 10, the rises in the Bitcoin rate have become less and less long and end at ever lower levels. The reason for the jump in prices in early trading in Asia was the statements of official Beijing on support for the markets, which caused a rally in the shares of the region. However, Bitcoin frankly ignored the drawdown of Asian stocks in recent days, so it quickly returned to its place, because other factors have become its key drivers in recent days. Meanwhile, Glassnode believes that bitcoin investors may face a final capitulation. This is indicated by the high proportion of "unprofitable" coins among short-term holders. At the same time, the uncertainty associated with geopolitics and the Fed rate weakened the accumulation of BTC by hodlers and caused an increase in sales on their part.
Precious Metals: What Can We Expect From Gold In The Near Future?

20/03/22 KOG Report – The week ahead for Gold

Knights of Gold Knights of Gold 20.03.2022 18:12
https://www.tradingview.com/chart/XAUUSD/bgv5PchS-XAUUSD-KOG-REPORT/ KOG Report: In last weeks KOG Report we suggested we wanted to see the price test the lower support region to give us a good entry for the long, which we got. What we didn’t get though was that aggressive push to the upside, instead FOMC moved the price towards the 1950 level giving traders over 300pips on the move. We managed to trade the longs and the shorts in Camelot with a total of 18 targets completed last week, which was a fantastic result for Excalibur. In all we played the defensive on the markets trading this the KOG level to level way making sure we were not over exposing ourselves. So what can we expect in the week ahead? Something is telling us there is a big move on the way and its going to catch a lot of traders out! What we will say is that we will be looking for extreme resistance levels on this to add to the short positions we’re holding from above. That’s not to say we won’t be going long; we will take long trades into immediate resistance levels. We can see am immediate resistance level at the 1930 level and above that around 1945. That 1945 level is important for as long as the price remains below that level its likely we will see some lower targets being achieved in Gold in the coming week. On the downside we have the key level here of 1890-80, that’s where we will be waiting this week to go long on the market. We’re not concerned and don’t want to get involved in the immediate range unless we’re taking quick scalping trades level to level using Excalibur to guide us. So, we will look for the following scenarios on Gold this week: Scenario 1: Price opens, pushes to the upside and finds resistance at the 1930-35 level, we feel this level would represent an opportunity to short the market back down into the immediate support levels of 1910, 1903 and below that 1895-90. We will be waiting just below to take a long position to target the 1930, 1940 and above that 1960 level. IF we reach 1950 we will take a majority of our trade of the table and let the rest run with the stop to entry. This will be a great swing trade if it works out! Scenario 2: Price opens negative, we have an Excalibur target just below around the 1910 level, we would expect a potential test on that wick or just below it. We will wait for our support levels of 1902, 1885-80, this is where we will want to test the long trade into the levels we have mentioned above! Again, around the 1940-50 level we will take a majority of the trade of the table and leave the stop at entry with an open target above. What we will be looking for is resistance above where we will want to short the market again. Its been a difficult month for traders with a lot of news driving the markets, the candles look small but the pip capture is very tempting for traders who are trading large lots. The market knows this and will create the swings and choppy price action to make sure its not as easy as it looks. Try not to be roped into the orchestration. We’re still playing the defensive here, even if that means we continue to do so for another month. We would rather trade a natural market than trade in the volatility being created by the fundamentals and geopolitics. Hope this helps traders, as usual we will be updating the analysis, levels and charts as we progress throughout the week. We’ve been doing these reports and analysis a long time, please do give us a like on our ideas, it does motivate us to keep going. As always, trade safe. KOG
S&P 500 (SPX) Up, Crude Oil Up, Credit Markets Up, Bitcoin Price Oops...

S&P 500 (SPX) Up, Crude Oil Up, Credit Markets Up, Bitcoin Price Oops...

Monica Kingsley Monica Kingsley 21.03.2022 15:37
S&P 500 did really well through quad witching, and the same goes for credit markets. 4-day streak of non-stop gains – very fast ones. Short squeeze characteristics in the short run, makes me think this rally fizzles out before the month ends – 4,600 would hold. We‘re likely to make a higher low next, and that would be followed by 4-6 weeks of rally continuation before the bears come back with real force again. July would present a great buying opportunity in this wild year of a giant trading range. As I wrote yesterday: (…) The paper asset made it through quad witching in style - both stocks and bonds. The risk-on sentiment however didn't sink commodities or precious metals. Wednesday's FOMC brought worries over the Fed sinking real economy growth but Powell's conference calmed down fears through allegedly no recession risks this year, ascribing everything to geopolitics. Very convenient, but the grain of truth is that the Fed wouldn't indeed jeopardize GDP growth this year - that's the context of how to read the allegedly 7 rate hikes and balance sheet shrinking this year still. Not gonna happen as I stated on Thursday already. Such are my short- and medium-term thoughts on stocks. Copper remains best positioned to continue rising with relatively little volatility while crude oil isn‘t yet settled (its good times would continue regardless of the weak volume rally of last two days, which is making me a little worried). Precious metals are still basing, and would continue moving higher best on the Fed underperforming in its hawkish pronouncements. No way they‘re hiking 7 times this year and shrinking balance sheet at the same time as I wrote on Thursday – Treasury yields say they‘ll take on inflation more in 2023. 2022 is a mere warm-up. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is now past the 4,400 – 4,450 zone, and hasn‘t yet consolidated. This week would definitely though not be as bullish as the one just gone by – the bulls will be challenged a little. Credit Markets HYG eked out more gains, but the air is slowly becoming thinner. As the sentiment turns more bullish through no deep decline over the coming few days, that‘s when junk bonds would start wavering. Gold, Silver and Miners Precious metals aren‘t turning down for good here – I think they‘re deciphering the Fed story of hiking slower than intended, which in effect gives inflation a new lease on life. Not that it was wavering, though. More upside in gold and silver to come. Crude Oil Crude oil is rising again, but look for a measured upswing that‘s not free from headwinds. While I think we would climb above $110 still, I‘m sounding a more cautious note given the decreasing volume – I would like to see more conviction next. Copper Copper is behaving, and would continue rising reliably alongside other commodities. It‘s also the best play considering downside protection at the moment. Bitcoin and Ethereum Bitcoin isn‘t recovering Sunday‘s setback – but the Ethereum upswing bodes well for risk taking today, even that doesn‘t concern cryptos all too much. Summary S&P 500 has a bit more to run before running into headwinds, which would happen still this week. Credit markets are a tad too optimistic, and rising yields would leave a mark especially on tech. Value, energy and materials are likely to do much better. Crude oil is bound to be volatile over the coming weeks, but still rising and spiking – not yet settled. Copper and precious metals present better appreciation opportunities when looking at their upcoming volatility. Within today‘s key analysis, I‘ve covered the path of stocks, so do have a good look at the opening part. Finally, cryptos likewise paint the picture of risk-on trades not being over just yet. 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.
Tepid BoJ Stance Despite Inflation Surge: Future Policy Outlook

A Rocketship! Greenback Has Become A TGV! US Dollar (USD) - How High DXY Can Jump?

Alex Kuptsikevich Alex Kuptsikevich 25.04.2022 14:05
The dollar continues to push back against competitors in global markets, going on the offensive against a broader front of currencies and stock indices. Geopolitics is ceding to monetary policy its role as the primary driver. And that could be bad news for risk-sensitive assets, as there is still no light at the end of this tunnel. The dollar's main competitors, the euro and the yen, seem to have exhausted their downside potential, and now the volatility threatens the next, broader range of currencies. Read next (by FXPro): (BTC) Bitcoin Priceslips To The Lows Of The Year. Crypto Regulations: Confusing Discussion In The US And The EU. Ether (ETH) And Monero (XMR) Highlighted | FXMAG.COM The yen has stabilised at 20-year lows at 128 after a 12% slump since the start of March and a 25% drawdown since the 2021 start. EURUSD was one step away from 1.0700 at the start of the European session, having lost 4.4% since March and 13% from its peak in January 2021. The movement is not too sweeping but steadily lowers the euro traded back in 2003. Read next (by FXPro): Want To Exchange 100 GBP To USD? GBP/USD Below 1.3000! (GBP) British Pound Weakens! GBP To USD - 17-Months-Low! | FXMAG.COM However, we are now seeing a marked reduction in the yen and the euro amplitude, while in contrast, it is rising in other market sectors. The British pound is flying into the abyss for a second day, losing 0.77% on Monday after falling 1.6% on Friday. GBPUSD has capitulated, pulling back to 1.2740, where it last was in September 2020. GBPUSD has moved into the lower half of the trading range this week from after the pandemic hit. The tactical target for the bears, in this case, could be the 1.2600 area, with the final point being 1.2000, where the GBPUSD has repeatedly found support over the past six years. The Australian dollar has lost about 4% since Thursday. The decline for the fourth consecutive week took about 6% off its peak at the start of April, maybe just half of the potential decline towards 0.6700, a critical turning point in the last 24 years.
Tokyo Raises Concerns Over Yen's Depreciation, Considers Intervention

FX Daily: Inflation Takes Center Stage as Geopolitical Events Have Limited Impact

ING Economics ING Economics 26.06.2023 10:38
FX Daily: Inflation remains the market’s priority Events in Russia have had little discernible impact on the FX market so far. Instead, the hot topic of high inflation and what policymakers are prepared to do about it remains the market's priority. This will be at the top of the agenda at this week's ECB's annual symposium in Sintra. Expect another mixed week in FX markets and possible BoJ intervention.   USD: Geopolitics has yet to make its mark Events in Russia this weekend have so far had very little impact on global financial markets. There has been no flight to quality rush into the short end of the US Treasury market (two-year yields are down only 2bp since Friday), crude oil failed to hold onto some very modest gains in Asia, and Asian equity price action was muted. In FX, it is hard to discern any flight to quality into the dollar, nor discernible outperformance of defensive currencies like the Japanese yen and the Swiss franc. The muted response probably reflects i) a lack of clarity over what comes next after this challenge to President Putin's authority and ii) financial markets having already experienced a year of a stronger dollar and higher energy prices after the Russian invasion of Ukraine.   Instead, the market is very much focused on inflation. Both central bankers and governments are under fire for having kept monetary and fiscal policy respectively too loose for too long. These (or at least monetary policy anyway) will be the hot topic for this week at the ECB annual symposium in Sintra. Many of the G7 central bank governors are in attendance and presumably will deliver a hawkish message, similar to the one that Federal Reserve Chair Jerome Powell delivered to Congress last week.   This means that yield curves look to remain very inverted as investors assess the degree of looming recession and that the dollar will stay strong against those currencies without a monetary defence – i.e., USD/JPY stays bid. In addition to Powell's comment at Sintra on Wednesday, the US highlight this week will be the release of the core PCE inflation data for May. This is released on Friday. Expected at 0.4% month-on-month, another high reading for core inflation suggests there can be no let-up in the Fed's hawkishness.   DXY can probably bounce around in a 102.00-103.00 range this week, while USD/JPY should edge closer to the 145 intervention zone.  
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

ING Economics ING Economics 17.08.2023 09:20
Would a larger bloc mean faster de-dollarisation? The BRICS grouping of major emerging economies, Brazil, India, China, South Africa and Russia, is holding its fifteenth summit later this month. Up for discussion: an expansion of the bloc, greater use of local currencies and the possibility of a BRICS currency which may have the potential to challenge the dominance of the US dollar. Any expansion of the BRICS grouping could determine the speed with which the bloc adopts commercial and financial systems outside of the dollar sphere. Speculation is rife as to how many countries, if any, will join the club – for the first expansion in a decade.   In order to evaluate how the political ambitions correlate with underlying economic trends, we take a closer look at the overall evolution of the US dollar’s role in the various areas of the global economy and markets. Here are the observations so far: There has been a drop in the dollar’s share of central banks’ FX reserves, but dollar usage has held up very well in commerce, private assets, debt issuance, and generally on the global FX market. Among the potential dollar challengers, the euro may seem like a runner-up, but its dominance is seen only in Europe. Looking at the BRICS, China’s amplification of renminbi swap lines seems to have helped promote the use of its currency in trade and international reserves, and Russia’s geopolitical aversion to the dollar gave CNY an additional boost, but China’s capital controls and low issuance of panda bonds remain an obstacle. The rising usage of alternative currencies does not seem to be threatening the dollar but rather increasing the competition among the regional currencies amid fragmentation of the trade and capital flows. No currency has made any inroad to the dollar’s pre-eminent status as the issuance currency of choice. Having been a major factor in removing sterling’s crown last century, challenging the dollar’s status in the international debt market has to be a central strategy for the young pretenders.     Overall, we do not see any conclusive evidence that the dollar is on the path of structural decline at this point. However, it is still facing challenges, stemming from both economics and geopolitics.
Metals and global supply chain vulnerabilities in the context of the green transition

Metals and global supply chain vulnerabilities in the context of the green transition

ING Economics ING Economics 30.08.2023 13:17
Metals and global supply chain vulnerabilities Metals are another obvious vulnerability in the global economy, particularly those linked to the green transition. Scarcity due to a lack of production capacity and/or geopolitics are important risks. The challenges in scaling up the production of electric vehicle batteries are a good example, as we highlighted in a recent report. Nickel-based batteries, currently favoured for their superior driving range, not only face constraints from long lead times on new mining development, but 20% of high-grade nickel, the type used in batteries, is sourced from Russia, and trade restrictions are also a key risk for supply. Supply chains of alternative battery technologies – lithium iron phosphate (LFP) and sodium iron (Na-ion) – are almost entirely reliant on China. Geopolitics is clearly a risk here too. That battery story can be expanded to other metals associated with the green transition. While lithium and nickel are the most exposed to critical supply risks, according to analysis by the US Department for Energy (chart below), plenty of others are seen as near-critical. Those include aluminium, where more than 80% of inventory on the London Metals Exchange is Russian material. Meanwhile copper prices – currently dampened by China’s weak recovery – are more likely to rise in the longer term, in part owing to a lack of investment in mining facilities in South America.   Nickel and lithium are most exposed to critical supply risks   Against this backdrop, near-shoring (or “friend-shoring”) will undoubtedly rise – though it’s early days and evidence of companies exiting the likes of China in favour of alternatives is mixed. Green industrial policy, like the US Inflation Reduction Act, is also beginning to reshape supply chains at the margin. Near-shoring is likely to be a slow-moving ship, but ultimately, if firms are trading lower costs for greater resilience, that’s likely to be inflationary. A recent ECB working paper concludes that re-shoring increases the price level for both producers and consumers, particularly in trade-intensive manufacturing. Is any of this capable of pushing inflation to the sorts of levels seen in 2022? Perhaps not. However, the glut of new vehicles and the resulting demand for used cars alone succeeded in adding more than a percentage point to US CPI in 2021. That showed that disruption for key products is capable of generating sizable upward inflation moves.
Summer 2023: A Cool Down on the Inflation Front and Implications for Fed Policy

Metals and the Green Transition: Supply Chain Vulnerabilities and Geopolitical Risks

ING Economics ING Economics 01.09.2023 08:53
Metals and global supply chain vulnerabilities Metals are another obvious vulnerability in the global economy, particularly those linked to the green transition. Scarcity due to a lack of production capacity and/or geopolitics are important risks. The challenges in scaling up the production of electric vehicle batteries are a good example, as we highlighted in a recent report. Nickel-based batteries, currently favoured for their superior driving range, not only face constraints from long lead times on new mining development, but 20% of high-grade nickel, the type used in batteries, is sourced from Russia, and trade restrictions are also a key risk for supply. Supply chains of alternative battery technologies – lithium iron phosphate (LFP) and sodium iron (Na-ion) – are almost entirely reliant on China. Geopolitics is clearly a risk here too. That battery story can be expanded to other metals associated with the green transition. While lithium and nickel are the most exposed to critical supply risks, according to analysis by the US Department for Energy (chart below), plenty of others are seen as near-critical. Those include aluminium, where more than 80% of inventory on the London Metals Exchange is Russian material. Meanwhile copper prices – currently dampened by China’s weak recovery – are more likely to rise in the longer term, in part owing to a lack of investment in mining facilities in South America.     Against this backdrop, near-shoring (or “friend-shoring”) will undoubtedly rise – though it’s early days and evidence of companies exiting the likes of China in favour of alternatives is mixed. Green industrial policy, like the US Inflation Reduction Act, is also beginning to reshape supply chains at the margin. Near-shoring is likely to be a slow-moving ship, but ultimately, if firms are trading lower costs for greater resilience, that’s likely to be inflationary. A recent ECB working paper concludes that re-shoring increases the price level for both producers and consumers, particularly in trade-intensive manufacturing. Is any of this capable of pushing inflation to the sorts of levels seen in 2022? Perhaps not. However, the glut of new vehicles and the resulting demand for used cars alone succeeded in adding more than a percentage point to US CPI in 2021. That showed that disruption for key products is capable of generating sizable upward inflation moves.        
German Ifo Index Continues to Decline in September, Confirming Economic Stagnation

Fed Expected to Hold Rates on September 20th, Dollar Softens as Treasury Yields Ease, Retail Sales Weaken, Mixed US Inflation Report

Ed Moya Ed Moya 11.09.2023 11:26
Fed expected to keep rates on hold on September 20th 10-year Treasury yield eases back to 4.248% as 4.36% remains key resistance US retail sales are expected to weaken and the US inflation report will be mixed (core steady, headline rises)   The US dollar rally may have to wait till next week’s inflation and retail sales data. The dollar is slightly softer across the board as Treasury yields soften. It was a rather quiet day in the US as most of the attention stayed on Apple shares and another earnings report that supported the resumption of the disinflation process.  Kroger’s earnings release stated, “we believe inflation will continue to decelerate and the environment will remain challenging for consumers.” Today, we didn’t learn anything new about the short-term direction of inflation and the US economy.  Next week, will either bolster up the Fed hawk argument that more tightening might be needed in November or show the consumer is finally feeling the impact of the Fed’s tightening cycle, as financing costs surge, student-loan repayments come due, and as households run out of excess savings.   USD/CHF Daily Chart       USD/CHF (a daily chart of which is shown) as of Friday (September 8th 2023) has shown the bullish move that started in the middle of July is running out of steam.  Price action in September recaptured both the 50- and 100-day SMAs.  The strong bearish trend that has been in place since last November is being tested and bullish momentum could thrive over the short-term if price is able to recapture the 200-day SMA, alongside making its first higher high since late last year. The bearish case for USD/CHF however could unfold over the coming months.  The cost of capital will clearly be much higher and that will take a major toll on just personal consumption but also corporate spending.  When risk aversion runs wild, USD/CHF may return quickly.  Right now the market is pricing in a soft landing that includes orderly weakness, but that could get rattled if geopolitics deliver a couple shocks to risk appetite.  
EU Investigates Chinese Electric Vehicle Subsidies, Impact on the EV Market

EU Investigates Chinese Electric Vehicle Subsidies, Impact on the EV Market

Saxo Bank Saxo Bank 15.09.2023 08:44
The EU is feeling the threat of Chinese electric vehicles and has announced an investigation into Chinese subsidies of its car industry extending the geopolitical fragmentation game from semiconductors to electric vehicles. This naturally makes it more difficult for carmakers to operate but also for investors to predict the long-term winners in EVs and as such we suggest investors increasingly look into the expanding and sprawling ecosystem around EVs.   Key points in this equity note The EU is engaging in a “war” against Chinese electric vehicles on the ground of heavy Chinese subsidies extending the geopolitical fragmentation game from semiconductors to electric vehicles. If electric vehicles develop into a trade war then it will be even more difficult to predict which carmakers will win the future of electric vehicles. As a result we suggest that investors go look for opportunities in the growing ecosystem around electric vehicles.   The fragmentation games evolves from semiconductors to the green transformation The Commission president Ursula von der Leyen announced yesterday in her annual address to EU lawmakers that the EU would launch an investigation into Chinese subsidies of electric vehicles production, which have flooded the market with cheap Chinese EVs. In the past, Chinese cars were no threat to Europe’s carmakers because of poor build quality, but the Chinese carmakers have climbed the learning curve, and the transition to EVs from ICEs have undoubtedly flatten and shorten the learning curve creating an opening for Chinese carmakers. Chinese carmakers are already facing 27.5% tariffs on their EVs exported to the US market, so it would be reasonably to assume that Europe could contemplate a similar tariff rate. The initial reaction was negative for Chinese EV-makers and positive for European carmakers, but the price action did not extend today suggesting the market is in a wait-and-see mode. Today China responded saying the EU’s action is a “naked protectionist act” and could negative impact the trading relationship between the EU and China. No thing that is blatantly indicating that China is heavily subsidizing its car industry is the car factory utilization rate which according to China Passenger Car Association (CPCA) is only 54.5% down from 66.6% in 2017. This is a sign of overinvestment and potentially gross malinvestment in non-productive assets. Just like the US is facing the Thucydides Trap with China in semiconductors so is Europe now in the green transformation spanning production of solar panels, wind turbines, batteries, and electric vehicles. Europe’s “war” against China was inevitable because Europe has a much more open economy (see chart) and thus stands to lose the most from state subsidies in foreign countries but also the fragmentation game, which is a geopolitical dynamic in which the US, Europe, and China are all reshoring key technologies to reduce strategic fragilities.       Avoid EV stocks and look instead for value in the EV ecosystem If electric vehicles become part of the geopolitical fragmentation game then it will become even more unpredictable which carmaker will win and how market share will be dispersed in the future. In our recent equity note The growing ecosystem around electric vehicles we make this point of unpredictability among EV-makers and that the ecosystem of around EVs such as charging stations, batteries, lithium, and battery recycling might be more predictable and deliver higher returns in the future. As we have said repeatedly, the combined market value of car companies (ICE and EV makers) has risen 148% over the past 7,5 years despite low growth in the overall market. This suggests a mispricing because of the technological disruption from EVs or that cars will be sold much more profitable in the future, but the “easy” rise of Chinese EV makers suggest that cars will be even more commoditized in the future so it is difficult to see these higher margins.    

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