Archive for Financial News – Page 209

Plastic recycling is failing – here’s how the world must respond

By Cressida Bowyer, University of Portsmouth; Keiron Roberts, University of Portsmouth, and Stephanie Northen, University of Portsmouth 

Recycling was once considered the obvious solution to the excessive amount of new (or virgin) plastic produced each year. This is no longer realistic. Global recycling capacity simply cannot keep up with the taking, making and wasting of natural resources.

Growing mountains of plastic waste are accumulating in the poorest countries as affluent nations such as the UK ship their recycling overseas. But some nations are importing far more plastic waste than they can possibly recycle.

The recycling process itself also creates problems. A new report by Greenpeace and the International Pollutants Elimination Network has revealed how plastics which are made with or come into contact with toxic chemicals, such as flame retardants, can contaminate the recycling process by spreading these toxins through subsequent batches of plastic waste. Another recent study showed that recycling facilities can release hundreds of tonnes of microplastics into the environment each year.

Only 6-9% of all plastic ever produced has been sent for recycling. Although plastic and other waste is collected for recycling in most countries, the amount of material that is remade into the same or similar products (what is called closed-loop recycling) is extremely low. Only 2% of plastic waste is recycled in a closed loop and not turned into something of lower quality, which is called downcycling. Recycling can not fully replace virgin material as it can only be recycled twice before losing necessary properties, and so most recycling results in a downgraded material that cannot be used for the same purpose.

A more sustainable approach would prioritise preventing plastic waste by taking action at earlier stages of a plastic product’s lifecycle: reducing how much plastic is ultimately made, reusing what exists and replacing plastic with alternative materials where appropriate.

Reduce

Manufacturers must stop making so much unnecessary plastic to reduce the amount entering the economy. There is no case for making plastics that are impossible to collect, reuse or recycle, or are toxic. Yet they are abundant: think multilayered sachets, thin films and wrappers. These should be phased out as a priority.

Global caps on plastic production could restrict its use to reusable products and packaging, reducing the pressure on recycling systems.

You can refuse single-use packaging when shopping if alternatives are available and affordable. Choose loose vegetables, or products wrapped in packaging that can be refilled.

Reuse

Using the plastic you already have for as long as possible reduces the amount of new products and packaging that need to be made and how much waste is ultimately sent for recycling.

Roughly 250 billion single-use coffee cups are used worldwide every year – a figure that could be slashed by governments setting national mandates for reusable cups and bottles. This might involve shops, cafés and other venues providing reusable packaging for any products they sell and ensuring each one is used, tracked, washed, returned and replenished for the next consumer cycle.

Substitute

Metals, glass, or paper can be used instead of plastic, but there is no universal sustainable alternative. The most appropriate material depends on the item’s use.

The environmental consequences of any material should be rigorously assessed across its entire life cycle – from production to use and disposal – to ensure it does more good than harm. And such assessments must consider all social, environmental and economic costs.

The true cost of making, distributing and disposing of plastic is estimated to be more than ten times greater than what the customer pays for the product. Including the hidden costs of environmental damage and human misery arising from pollution in the price of virgin plastic, by taxing manufacturers or retailers for instance, could boost the economic case for alternatives.

Recycling can still be useful

Not all plastics can be reused, especially medical devices. When all alternatives have been exhausted, recycling keeps material in the economy and temporarily delays the need for more virgin plastic. But the existence of recycling shouldn’t justify making more plastic.

Recycling must not pollute. Manufacturers should only make plastics which can be recycled via methods proven to be safe and clean, and ban toxic additives. Simple labelling can help consumers make informed decisions about how, where and what to either reuse or recycle, which would help prevent recycling loads becoming contaminated with non-recyclable waste and toxins.

Plastics sent for recycling should be treated in the most socially and environmentally responsible way. High-income countries which export waste to poorer countries for cheap recycling do so without guarantees that infrastructure exists to manage this waste where it ends up. The result is waste leaking into the environment, and toxic plastic blocking drainage channels and causing floods. Some of this is burned outdoors, which comes with its own risks to health and the environment. Banning or restricting exports would help.

Precarious workers in the informal waste sector collect, sort and sell recyclable materials and carry out 60% of global recycling. Waste reclaimers endure poor health and low pay but their extensive knowledge is invaluable and must be acknowledged. Policies to protect their rights and improve their livelihoods are needed.

Countries meeting in Paris for the second of five rounds of negotiations for an international treaty to end plastic pollution will discuss all areas of the plastic lifecycle – from the extraction of material to manufacturing, use and disposal. Banning unnecessary plastics, toxic additives and waste exports should be high on the agenda, along with schemes to encourage reuse and repair.


Imagine weekly climate newsletter

Don’t have time to read about climate change as much as you’d like?

Get a weekly roundup in your inbox instead. Every Wednesday, The Conversation’s environment editor writes Imagine, a short email that goes a little deeper into just one climate issue. Join the 10,000+ readers who’ve subscribed so far.The Conversation


Cressida Bowyer, Senior Research Fellow and Deputy Director, Revolution Plastics, University of Portsmouth; Keiron Roberts, Senior Lecturer in Sustainability and the Built Environment, University of Portsmouth, and Stephanie Northen, Research Associate, Revolution Plastics, University of Portsmouth

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Treasury Bonds: How This Forecast is Playing Out

Here’s what happened with a shelf of support in the chart of the long bond

By Elliott Wave International

The yield on U.S. Treasury bonds trended higher from 1942 to 1981 — that’s 39 years.

Interestingly, yields (or interest rates) then trended lower for 39 years (1981 to 2020).

Thirty-nine years is quite a long time — well long enough for observers to get used to the idea of exceptionally low yields, even the Fed.

Indeed, here’s a Sept. 16, 2020 headline from the Wall Street Journal:

Fed Signals Low Rates Likely to Last Several Years

Elliott Wave International President Robert Prechter had an entirely different perspective. Here’s what he said just a week later in his Sept. 23, 2020 issue of The Elliott Wave Theorist, a monthly publication which provides analysis of major financial and cultural trends:

On September 16, Fed Chairman Powell [said] he expected short term interest rates to stay near zero as long as inflation stays below 2%, a condition he believes will maintain … through “the end of 2023.” I think there is not a chance in the world of that scenario playing out. … The probability is high that interest rates have begun a process of rising. … [emphasis added]

As we all know, interest rates or yields have risen substantially since 2020.

This chart and commentary from the May 19, 2023 Elliott Wave Theorist provide an update (Keep in mind that Elliott wave labeling is available to subscribers):

Treasury bond futures have been slipping again. As you can see in [the chart], bond prices broke a shelf of support this week and traded today at their lowest level in ten weeks. A debt crisis is brewing, and higher long term interest rates will add to the pressure.

Yes, servicing public and private debt is getting a lot more expensive. And that debt has been increasing dramatically and rapidly (CNBC, May 18):

The global debt pile grew by $8.3 trillion in the first quarter to a near-record high of $305 trillion … .

Getting back to the price pattern of the U.S. Treasury Long Bond, Elliott wave analysis can help you determine what’s next.

Of course, no method of analyzing financial markets can offer a guarantee, but Elliott Wave International knows of no other method which surpasses the usefulness of the Elliott wave model.

That said, here’s a quote from Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior:

Without Elliott, there appear to be an infinite number of possibilities for market action. What the Wave Principle provides is a means of first limiting the possibilities and then ordering the relative probabilities of possible future market paths. Elliott’s highly specific rules reduce the number of valid alternatives to a minimum. Among those, the best interpretation, sometimes called the “preferred count,” is the one that satisfies the largest number of guidelines. Other interpretations are ordered accordingly. As a result, competent analysts applying the rules and guidelines of the Wave Principle objectively should usually agree on both the list of possibilities and the order of probabilities for various possible outcomes at any particular time. That order can usually be stated with certainty. Do not assume, however, that certainty about the order of probabilities is the same as certainty about one specific outcome. Under only the rarest of circumstances do you ever know exactly what the market is going to do. You must understand and accept that even an approach that can identify high odds for a fairly specific event must be wrong some of the time.

If you’d like to read the entire online version of the book, you may do so for free once you become a member of Club EWI, the world’s largest Elliott wave educational community.

A Club EWI membership is also free.

Get started right away by following this link: Elliott Wave Principle: Key to Market Behaviorget free access.

This article was syndicated by Elliott Wave International and was originally published under the headline Treasury Bonds: How This Forecast is Playing Out. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Japanese Candlesticks Analysis 01.06.2023 (USDCAD, AUDUSD, USDCHF)

By RoboForex.com

USDCAD, “US Dollar vs Canadian Dollar”

On H4, the currency pair has formed a Hanging Man reversal pattern. Currently, the instrument is going by the reversal signal in a descending wave. The decline target might be 1.3510. Next, the price could break the level and continue the downtrend. However, the quotes could correct to 1.3635 before falling.

USDCAD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

AUDUSD, “Australian Dollar vs US Dollar”

On H4, the pair has formed an Inverted Hammer reversal pattern. Currently, the instrument is going by the reversal signal in an ascending wave. The correction target might be 0.6550. Upon testing the resistance, the quotes might rebound from it and go on developing the downtrend. However, the price could drop to 0.6425 without testing the resistance.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCHF, “US Dollar vs Swiss Franc”

On H4, near the resistance level, the pair has formed a Sandwich reversal pattern. Currently, the instrument is going by the reversal signal in a descending wave. The correction target might be 0.9080. Upon testing the resistance, the price could rebound from it and go on with the uptrend. However, the quotes might rise to 0.9175 without pulling back to the support level.

USDCHF

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

EURUSD attempts slight recovery

By ForexTime

The world’s most-traded FX pair is attempting to pare some of yesterday’s declines.

EURUSD’s move higher at the time of writing is in spite of the just-released Eurozone inflation data for May, as measured by the consumer price index (CPI), arguing for greater declines for the bloc’s currency.

  • 6.1% rise compared to May 2022 (year-on-year), which is lower than the market’s forecast of 6.3%, and also slower than April’s 7% year-on-year figure.
  • Unchanged CPI (0%) month-on-month (May 2023 vs. April 2023), which is less than the market’s forecasted 0.2% month-on-month rise, and also lower than April’s 0.6% month-on-month rise (April 2023 vs. March 2023).
  • Core CPI (excluding more volatile food and energy prices) rose 5.2% in May year-on-year, lower than the market’s forecast of 5.5% and also lower than April’s 5.6% year-on-year advance.

Traders largely ignored today’s headline Eurozone inflation data, given that markets had already reacted to yesterday’s (Wednesday, May 31st) inflation prints out of Germany and France – the Eurozone’s two largest economies.

 

How does the Eurozone inflation data affect the Euro?

Generally, slower-than-expected inflation would lessen the need for the European Central Bank (ECB) to keep hiking its benchmark interest rate aggressively.

And a currency softens at the thought of interest rates not moving higher.

Markets expectations for those ECB interest rate adjustments have hardly shifted in recent weeks.

Markets still predict two more 25bp rate hikes by the ECB between now through September.

But the all-important difference between US and eurozone yields has widened recently and boosted the greenback, which in turn dragged EURUSD lower.

After all, the euro has already taken the brunt of the dollar buying with EUR/USD falling just shy of 3% last month.

 

EUR/USD dropped to a ten-week low at 1.06352 yesterday before attempting to pare some of its losses at the time of writing.

A decisive loss of support around 1.07 could see more downside for the world’s most popular currency major.

The recent declines in EURUSD appears to have all but nullified the prospects for a rebound, as suggested in our latest Trade of the Week (published on Mondays).

 

But the week isn’t over yet.

The remaining hope for a EURUSD rebound, albeit likely a limited one, rests on how Friday’s US nonfarm payrolls report pans out:

  1. Economists are forecasting that 195,000 new jobs were added to the US economy in May, which would be its lowest tally since before the pandemic.
  2. Furthermore, the unemployment rate is expected to tick higher to 3.5%, relative to April’s 3.4% unemployment rate.
  3. Also, wage growth in May is expected to slow to 0.3% compared to April 2023 (month-on-month), which would be notably slower than April’s 0.5 month-on-month advance (compared to March 2023).

Potential scenarios:

  • If there are more signs of slowing hiring momentum in the world’s largest economy’s labour market (lower-than-190k headline NFP number / higher-than-3.5% unemployment rate / lower-than 0.3% month-on-month wage growth), that could weaken the US dollar while offering relief for EURUSD.

    Such a reaction would be based on the notion that a weakening US jobs market would lessen the need for the Fed to trigger another rate hike.

  • However, the US dollar may strengthen and drag EURUSD lower if the US jobs market continues to demonstrate its resilience (higher-than-200k headline NFP number / lower-than-3.5% unemployment rate / higher-than 0.3% month-on-month wage growth)

    A stronger-than-expected showing by the US jobs market may allow the Fed to hike once more this summer, if not in June then perhaps in July. And such prospects then likely to embolden dollar bulls.

 

When are markets expecting the next Fed rate hike?

The chances of a June hike according to futures markets had risen from less than zero at the start of May to nearly 60% on Tuesday (hence the US dollar’s rebound).

However, those odds have been halved to around 35% at the time of writing.

But the idea that the FOMC will “skip” a June hike and hold rates steady in a couple of weeks’ time is gaining traction, and the idea has been backed up by recent Fedspeak, barring a sizzling red hot jobs report on Friday of course.

 

As long as markets are allowed to believe there’s still one more Fed rate hike in the pipeline, that should keep the US dollar supported in the interim, while weighing on the rest of the FX universe.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Inflationary pressures are easing in Europe. Investors awaiting approval of debt ceiling bill

By JustMarkets

At the close of the stock market yesterday, the Dow Jones Index (US30) decreased by 0.41%, and the S&P 500 Index (US500) closed lower by 0.61%. The NASDAQ Technology Index (US100) was down by 0.63% on Wednesday. Yesterday the indices were under pressure from declines in consumer and technology stocks. There is also continued uncertainty in the vote on the debt ceiling bill. Most analysts anticipate approval of the bill, but the deadline is close. The US House of Representatives voted for a bill to suspend the debt ceiling late Wednesday night.

The Federal Reserve’s interest rate hike on June 14 may depend on Friday’s jobs report (Nonfarm Payrolls). The Fed tightening by reducing the balance sheet could cause liquidity after the debt ceiling deal, and higher rates could deprive the current rally in the S&P 500 (US500) of energy. On the other hand, confirmation that the labor market is exhaling could lower long-term market interest rates, helping to offset the Fed’s quantitative tightening and provide short-term support for the S&P 500 (US500) and growth stocks.

Shares of HP Inc (HPQ) fell more than 5% after posting mixed quarterly results as revenue fell short of expectations due to lower demand for PCs. NVIDIA Corporation (NVDA) fell more than 5%, while Intel Corporation (INTC) resisted the trend, rising nearly 5% as the chipmaker talked up prospects and received a vote of confidence from Nvidia. Nvidia’s CEO said yesterday that the company could buy chips from Intel. IBM plans to replace nearly 8,000 employees with AI. Most of it will be faced by office support workers, especially in the human resources sector. IBM also announced earlier this year that it would cut 3,900 jobs for more automation and cost-cutting measures.

Stock markets in Europe were mostly down Wednesday. Germany’s DAX (DE30) fell by 1.54% yesterday, France’s CAC 40 (FR40) lost 1.54%, Spain’s IBEX 35 (ES35) decreased by 1.54%, and the British FTSE 100 (UK100) ended the day down by 1.01%.

The latest inflation data showed that consumer prices in France fell from 5.9% to 5.1% y/y, in Italy, inflation fell from 8.2% to 7.6% y/y, and in Germany, CPI fell from 7.2% to 6.1% y/y. Today, the overall Eurozone figure will be released. The Eurozone inflation figure is expected to fall from 7.0% to 6.3% y/y, and the core indicator (which excludes food and energy prices) is expected to fall slightly from 5.6% to 5.5%. But that won’t stop the European Central Bank from raising rates in June.

Oil prices hit a one-month low on Wednesday after weak production data from China, the world’s largest oil importer, raised concerns about demand growth in the second half of the year. Oil prices have fallen more than 16% since the beginning of the year as China’s sluggish economic recovery and the Federal Reserve’s tightening of monetary policy weigh on demand prospects. At the same time, rising demand ahead of summer is not currently supporting prices in any way. Crude oil inventories will be released today, and there will be an OPEC+ meeting on June 4, where there may be surprises in the form of production cuts to support prices.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) shed by 1.41% over the day, China’s FTSE China A50 (CHA50) fell by 1.72%, Hong Kong’s Hang Seng (HK50) ended Wednesday down by 1.94%, India’s NIFTY 50 (IND50) lost 0.53%, and Australia’s S&P/ASX 200 (AU200) closed negative yesterday by 1.64%.

Australian stocks were supported today by stronger-than-expected first-quarter capital spending data. The reading underscores some strength in the Australian economy as it struggles with high inflation, rising rates and slowing growth. Strong economic data also encouraged Japanese stocks as capital spending rose more than expected in the first quarter, indicating a potentially higher revision to first-quarter economic growth data.

S&P 500 (F) (US500) 4,179.83 −25.69 (−0.61%)

Dow Jones (US30)32,908.27 −134.51 (−0.41%)

DAX (DE40) 15,664.02 −244.89 (−1.54%)

FTSE 100 (UK100) 7,446.14 −75.93 (−1.01%)

USD Index 104.23 +0.06 (+0.06%)

Important events for today:
  • – Japan Manufacturing PMI (m/m) at 02:50 (GMT+3);
  • – Australia Retail Sales (m/m) at 04:30 (GMT+3);
  • – Switzerland Manufacturing PMI (m/m) at 10:30 (GMT+3);
  • – German Manufacturing PMI (m/m) at 10:55 (GMT+3);
  • – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
  • – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
  • – Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
  • – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
  • – Eurozone ECB President Lagarde Speaks at 12:30 (GMT+3);
  • – Eurozone ECB Monetary Policy Meeting Accounts at 14:30 (GMT+3);
  • – US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
  • – Canada Manufacturing PMI (m/m) at 16:30 (GMT+3);
  • – US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);
  • – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
  • – US Crude Oil Reserves (w/w) at 18:00 (GMT+3);
  • – US FOMC Member Harker Speaks at 20:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

The cryptocurrency market digest (BTC, SUI). Overview for 31.05.2023

By RoboForex.com

The BTC on Wednesday is balancing around 27,148 USD.

While the technical trading picture of the BTC is favourable for a price increase, investors are clearly not ready to buy. This is probably due to the high correlation of the BTC with the S&P 500 index and Nasdaq indices. Markets are focused: today the House of Representatives will vote on the issue of raising the country’s public debt limits. The framework agreement has long been reached, but as long as the project is fully approved, surprises are possible.

The strong position of the US dollar is also hindering the growth of the BTC.

The support level of 26,500 USD remains in place, but it is no longer as strong as before. The next support level below it is 23,800 USD. To return to the 30,000 USD attack, the cryptocurrency needs to rise above 28,900 USD.

The capitalisation of the cryptocurrency market has dropped to 1.137 trillion USD. The share of BTC has fallen to 46.3%, while the share of ETH remains at 19.7%.

Bybit ceases operations in Canada

The Bybit cryptocurrency exchange is shutting down operations in Canada due to the sector regulations becoming too complicated. All open trades will be closed by 30 September. Earlier, Binance also announced leaving Canada.

Investors are waiting for tokens to be unblocked

Two major tokens will be unlocked this week. This will happen on the Optimism and Sui crypto networks. Today 387 million coins worth 590 million USD will be released on the Ethereum Layer 2 Optimism network. The tokens are to be split between the main participants and investors. On 3 June, there will be an unlock on the Sui Layer 1 blockchain. Here, 61 million tokens worth 62 million USD will be released. This will increase the current supply of the coin by 13%.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Why is the US dollar stronger today?

By ForexTime

The USD Index has punched its way to a fresh two-month high, and is on course for its largest monthly gain (2.8%) since September 2022.

NOTE: The USD Index tracks how the US dollar is performing against a basket of six different G10 currencies, including the euro, British Pound, and Japanese Yen.

 

Also, the US dollar has strengthened against all of its G10 peers today:

 

 

Here are 3 reasons why the dollar bulls (those hoping prices will move higher) are having a wonderful Wednesday:

 

1) China’s weaker-than-expected data prompted demand for safe haven dollar

Earlier today, China revealed that its purchasing managers’ index (PMI) for its manufacturing sector (think of factories) and non-manufacturing sector (think of services) both came in below market expectations.

Hence, markets got spooked on signs that the recovery in the world’s second largest economy is not on solid footing, especially as fears of a recession abound.

And when investors are traders are fearful, they flock to safe haven assets which help protect one’s wealth in times of great fear and uncertainty.

With the US dollar long been seen as a traditional safe haven, no surprise that China’s wobbly recovery in turn drove the US dollar higher.

 

2) Germany and France’s lower-than-expected inflation data weakened the euro, in a further boost for USD

First, some important notes:

  • Germany and France are the two largest economies in the Eurozone.
  • The European Central Bank (ECB) has been hiking interest rates aggressively to bring inflation down from its record high.
  • A currency softens at the thought of interest rates not moving higher.
  • The euro is the largest component of the USD Index, with the former accounting for 57.6% – more than half – of the benchmark index.

With all of the above in mind, today’s announcements that inflation in the Eurozone’s two largest economies are slowing down further, that suggests that the ECB has less reasons to keep hiking its benchmark rates much further.

And in this zero-sum game that is the FX markets, with the Euro (more than half of the USD index) weakening at the thought of a less-aggressive ECB, that allowed the US dollar to punch higher!

Furthermore, and this brings us back to reason #1, the Eurozone is very dependent on the Chinese economy. The Eurozone economy will feel the effects of a slowdown in the Chinese economy.

Hence, there was less demand for the euro today in light of China’s weaker-than-expected PMI data, which in turn bolstered the US dollar.

 

3) US debt-ceiling deal moving closer to Congress approval, restoring faith in dollar

Later today, the US House of Representatives (the lower body of Congress) is set to vote on the tentative deal to raise the US debt ceiling.

This tentative deal, struck between US President Joe Biden (Democrat) and Speaker Kevin McCarthy (Republican) over the weekend, would ensure that the US government can issue more debt to get the cash it needs to keep paying its bills.

Otherwise, failure to raise the debt ceiling (allow the US government to issue more debt), would trigger a catastrophic default by the US government for the first time in history!

Although this tentative deal faces a race against time in requiring approval before the June 5th deadline, markets are hoping that the deal will be approved, thus restoring faith in US assets including the US dollar.

 

 

Technical Perspective: Where to possibly next for the USD index?

 

Potential upside scenario:

At the time of writing, this index is facing immediate resistance around the 104.60 region, which had also resisted bulls on January 3rd and February 17th earlier this year.

A daily close above this 104.60 level could set the USD Index on course for these key levels:

Potential near-term resistance:

  • 105.00 (psychologically-important handle).
  • 105.105 (March 15th high)
  • 105.27 – 105.41 (early Jan- late Feb highs)

Bullish technical crossover?

The US dollar may also draw a bullish cue from the fact that its 21-day simple moving average (SMA) has crossed above its 100-day counterpart.

The last time this technical event (21-day SMA crossed above 100-day SMA) happened was in mid-2021.

After that last bullish episode, the USD Index then went on a 15-month winning streak that culminated in a 23% climb.

Though to be clear, it’s a lot harder to imagine the US dollar going on another 20+% climb from here, given the macro headwinds facing the US economy as well as expectations that the Fed will lower interest rates in 2024.

 

Potential downside scenario:

However, if the US dollar’s upwards momentum fails to hold over the immediate future, bears (those hoping prices will move lower) would be eager to test these key levels:

Potential near-term support:

  • 103.8 (intraday lows during recent consolidation)
  • 103.4 – 103.6

Technical pullback soon?

Also, note in the chart at the top of this article, that the USDInd’s 14-day relative strength index (RSI) has broken above the 70 threshold which denotes “overbought conditions”.

In the prior instance of this technical event (RSI breaking above 70) back in late February, the USD Index then fell by about 4.4% over the following seven weeks.

 

Dollar tends to fall in June over past 30 years

It remains to be seen whether the USD Index can reverse the downtrend that’s in place, having posted a series of lower highs and lower lows since late September 2022.

Although dollar bulls are enjoying their time in the sun currently, history may be against them.

Since 1993, the month of June has averaged a monthly drop of 0.27%.

 

And with the US debt ceiling drama set to be extended into the new month, coupled with a highly-anticipated Federal Reserve meeting due in a couple of weeks

time will tell whether dollar bulls will still be basking in the sunshine by this time next month.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Australia has seen a sharp rise in inflation. Chinese PMI data disappointed investors

By JustMarkets

The Dow Jones index (US30) decreased by 0.15% at the close of the stock market yesterday, while the S&P 500 index (US500) closed at its opening price. The NASDAQ Technology Index (US100) was up 0.32% on Tuesday.

The leading Republican in Congress, Kevin McCarthy, on Tuesday urged his party to support a bipartisan deal to raise the $31.4 trillion US debt ceiling and avert a catastrophic default ahead of a procedural vote. Both Democratic President Joe Biden and House Speaker McCarthy predicted that they would get enough votes to pass the legislation by June 5. Despite the progress, several Republicans said they would resist the deal.

The news of the debt ceiling agreement still leaves uncertainty about the prospects for US creditworthiness. Analysts believe that despite positive progress toward a deal, there is a high probability that Fitch Ratings will downgrade the US credit rating. During the previous debt ceiling crisis in 2011, Standard & Poor’s rating agency downgraded US’s highest “AAA” rating one notch days after the debt ceiling agreement, citing insufficient steps to fix the country’s financial situation.

The US consumer confidence fell to a six-month low in May. The Conference Board consumer confidence index this month fell to 102.3, its lowest level since last November, from an upwardly revised 103.7 in April. Consumers were less optimistic about the labour market, with the share of those who think jobs are “plentiful” falling to its lowest level since April 2021 and the share of those who think jobs are “hard to get” rising to a six-month-high.

Stock markets in Europe were mostly down on Tuesday. Germany’s DAX (DE30) decreased by 0.27% yesterday, France’s CAC 40 (FR 40) lost 1.29% yesterday, Spain’s IBEX 35 (ES35) fell by 0.18%, and the British FTSE 100 (UK100) ended the day down 1.38%.

Spain’s inflation rate declined from 4.1% to 3.2% yearly. France and Italy will release inflation data today, followed by the overall Eurozone figure tomorrow. Inflationary pressures in the region are expected to continue to ease.

Oil fell 4% yesterday due to concerns over Fed action on rates and OPEC’s production decision. Crude oil prices fell amid growing speculation that the Federal Reserve will raise rates in June. But before the Fed meeting, OPEC+ countries will meet on June 4. Tensions between Saudi Arabia and Russia are rising as Moscow continues to pump huge amounts of cheaper oil into the market, undermining Riyadh’s efforts to maintain energy prices.

Asian markets traded yesterday without a single dynamic. Japan’s Nikkei 225 (JP225) gained 0.30% on the day, China’s FTSE China A50 (CHA50) fell by 0.32%, Hong Kong’s Hang Seng (HK50) added 0.24% on Tuesday, India’s NIFTY 50 (IND50) increased by 0.19%, and Australia’s S&P/ASX 200 (AU200) was negative 0.11% on the day.

Activity in China’s manufacturing sector declined for the second month in a row in May, raising further questions about the country’s economic recovery. Weak demand and slowing capital investment put pressure on the country’s biggest economic engines. The manufacturing PMI fell to 48.8 from 51.4, a reading below 50 indicating contraction. The service sector remained above 50 but declined from 56.4 to 54.5 for the month. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indices fell 1% and 0.6%, respectively, after the news, with the blue-chip index reaching its lowest level in six months. It should be noted that China is also struggling with a resurgence of COVID-19 cases, with some officials warning that the number of cases could peak by the end of June.

In Australia, consumer prices rose much more than expected in April, prompting markets to consider a greater chance of further rate hikes. On an annualized basis, the CPI rose from 6.3% to 6.8%. Governor Lowe said Wednesday that Australia’s Central Bank will do all it can to get inflation under control, warning households to prepare for trouble ahead while risks of higher inflation persist. The RBA predicts that overall inflation will return to the top of the bank’s 2-3% target by mid-2025, which will be slower than in many other countries.

S&P 500 (F) (US500) 4,205.59 +0.14 (+0.03%)

Dow Jones (US30)33,042.85 −50.49 (−0.15%)

DAX (DE40) 15,908.91 −43.82 (−0.27%)

FTSE 100 (UK100) 7,522.07 −105.13 (−1.38%)

USD Index 104.07 −0.14 (−0.13%)

Important events for today:
  • – Australia RBA Governor Lowe Speaks at 02:00 (GMT+3);
  • – Japan Unemployment Rate (m/m) at 02:30 (GMT+3);
  • – Japan Industrial Production (m/m) at 02:50 (GMT+3);
  • – Japan Retail Sales (m/m) at 02:50 (GMT+3);
  • – Australia Consumer Price Index (m/m) at 04:30 (GMT+3);
  • – China Manufacturing PMI (m/m) at 04:30 (GMT+3);
  • – China non-Manufacturing PMI (m/m) at 04:30 (GMT+3);
  • – Switzerland Retail Sales (m/m) at 09:30 (GMT+3);
  • – ECB Financial Stability Review at 11:00 (GMT+3);
  • – German Consumer Price Index (m/m) at 15:00 (GMT+3);
  • – Canada GDP (q/q) at 15:30 (GMT+3);
  • – US FOMC Member Bowman Speaks at 15:50 (GMT+3);
  • – US JOLTs Job Openings (m/m) at 17:00 (GMT+3);
  • – Switzerland SNB Chairman Jordan Speaks 18:05 (GMT+3);
  • – US FOMC Member Harker Speaks at 20:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

NZDJPY D1 – The bears are stirring

By ForexTime

The NZDJPY bulls on the D1 time frame have been making higher tops and bottoms since the beginning of May.

A last higher top was reached when the price bounced off a weekly resistance level on 23 May at 87.304.

A closer look at the Momentum Oscillator reveals negative divergence between point “a” and “b” when comparing the tops at 86.173 and 87.304.

This could have alerted technical traders that the bears might be stirring and getting ready to challenge the bullish reign.

Confirmation of this was in the form of strong bearish candles with the market breaking through the 15 Simple Moving Average and the Momentum Oscillator dipping into bearish territory.

A possible critical support level formed near the 34 Simple Moving Average when a lower bottom was recorded on 25 May at 84.446.

The bulls then tried to regain the upper hand, but a lower top formed on 29 May at 85.338.

If the bears break through the critical support level at 84.446, then three possible price targets can be set from there.

Attaching the Fibonacci tool to the lower bottom 84.446 and dragging it to the resistance level at 85.338, the following targets can be determined:

  • 83.895 (161.8%)
  • 83.003 (261.8%)
  • 81.559 (423.6%)

If the resistance level at 85.338 is challenged and broken, the current scenario is not valid any longer.

As long as support overcomes demand and market sentiment stays negative, the outlook for the NZDJPY on the D1 time frame will remain bearish.

 

 


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Relations between the US and China continue to deteriorate. The economic outlook for the Eurozone is weakening

By JustMarkets

Famous investor Warren Buffett does not believe that Congress will be unable to raise the debt ceiling and the country will default. He compared the current standoff among lawmakers to the previous one, calling such a clash “an idiotic waste of time” and calling for a complete repeal of the borrowing limit. The CEO of Berkshire Hathaway (BRKb) said limiting the borrowing ceiling never made sense because the country’s creditworthiness is growing as it grows economically.

Cathie Wood, manager of the exchange-traded fund ARK Innovation (ARKK), said Monday evening that Nvidia Corporation (NVDA) is overvalued and that Tesla Inc (TSLA) could benefit much more from recent advances in artificial intelligence. In particular, electric car maker Tesla is the “most obvious” beneficiary of recent advances in artificial intelligence, Wood said, citing the firm’s pursuit of autonomous driving technology.

Stock markets in Europe traded flat Monday. Germany’s DAX (DE30) decreased by 0.20% yesterday, France’s CAC 40 (FR40) fell by 0.21% yesterday, Spain’s IBEX 35 (ES35) lost 0.12%, and the British FTSE 100 (UK100) was not trading yesterday.

Bank of America (BoA) is cautious about the outlook for the Euro Area. Europe’s economic data is getting progressively worse. Along with a possible reduction in risk from the debt ceiling, the situation could lead to an even stronger dollar and a lower euro in the short term.

European stocks declined in trading on Monday due to losses in technology companies and bank stocks. The STOXX 600 pan-European index closed down 0.1% after recording its strongest one-day gain in nearly two months on Friday.

Spanish Prime Minister Pedro Sanchez unexpectedly announced an early national election, and his main rival declared his goal of becoming the country’s next leader after leftist parties were defeated in regional elections.

The credit agency Standard and Poor’s notified France of a possible downgrade.

Oil prices rose in weakly volatile trading on Monday. But on Tuesday, oil started to decline again. Concerns about further interest rate hikes by the Federal Reserve and a slowdown in economic growth largely offset optimism about an increase in the US government debt ceiling. The main focus of oil traders now is the OPEC+ meeting on June 4.

Asian markets traded yesterday without a single dynamic. Japan’s Nikkei 225 (JP225) gained 1.03%, China’s FTSE China A50 (CHA50) was 0.49% lower, Hong Kong’s Hang Seng (HK50) fell by 1.04% lower on Monday, India’s NIFTY 50 (IND50) gained 0.54%, and Australia’s S&P/ASX 200 (AU200) was 0.87% higher on the day.

Most Asian stock indices fell on Tuesday as optimism over a deal to raise the US debt ceiling was offset by fears of worsening relations between Beijing and Washington amid renewed trade and political sanctions disputes. China’s CSI 300 index fell to a five-month low after China rejected a request for a meeting between US Defense Secretary Lloyd Austin and Chinese Defense Minister Li Shanfu at a forum in Singapore later this week. The deterioration in relations between the two countries also comes amid waning optimism about China’s economic recovery this year, with attention now focused mainly on the May manufacturing and service sector activity figures due Wednesday.

S&P 500 (F) (US500) 4,205.45 0.0 (0.0%)

Dow Jones (US30)33,093.34 0 (0%)

DAX (DE40) 15,952.73 −31.24 (−0.20%)

FTSE 100 (UK100) 7,627.20 +56.33 (0.74%)

USD Index 104.28 +0.08 +0.07%

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.