Opinions

Archive for Opinions – Page 30

If you really want to close the US trade deficit, try boosting innovation in rural manufacturing

By Amitrajeet A. Batabyal, Rochester Institute of Technology

President Donald Trump has long been preoccupied by the trade deficit — the gap between what the U.S. sells to the rest of the world and what it buys from it. He recently declared the issue a national emergency and used trade deficit data to calculate so-called “reciprocal tariffs” targeting nearly 100 countries. Although those specific tariffs are now on pause, Trump’s concern with the trade deficit persists.

As an economist, I know there are two basic ways for a country to reduce a trade deficit: import less or export more. While Trump has focused on the former strategy, a more productive path may lie in the latter – especially by looking at untapped opportunities in rural America.

Economists have long studied the differences between rural and urban regions. But while research shows that urban areas tend to be more technologically advanced, fast-growing and economically dynamic, economists have historically paid less attention to how regional differences affect export performance.

New research is starting to fill that gap. Economists recently found that urban businesses export significantly more than rural ones – a difference with significant implications for national trade.

The urban-rural export gap

Looking at data from the Census Bureau’s Annual Business Survey as well as trade statistics from 2017 to 2020, researchers used econometric techniques to measure the urban-rural export gap. They also examined two categories of potential causes – “explained” and “unexplained.”

The first is due to differences in what economists call “endowments” – for example, a region’s digital infrastructure, its access to renewable energy and its opportunities for high-tech employment. These endowments can be observed and therefore explained.

The second is due to what economists call “structural advantage.” This refers to attributes of a region that matter for export performance but can’t be observed and, as a result, remain unexplained.

They found that most of the urban-rural export gap is due to explained differences. That means rural businesses could close the export gap if they were provided with similar endowments – meaning comparable access to renewable energy, similar digital infrastructure and analogous opportunities for high-tech employment – to their urban counterparts.

Even more strikingly, the unexplained component was negative – which means rural businesses outperform expectations given their characteristics. That suggests rural regions have significant untapped export potential.

Several factors collectively account for the urban export advantage. First, urban regions have a greater concentration of highly educated science and technology workers. Urban businesses also tend to be larger and more tech-savvy, and because they have better access to broadband, they use cloud technology more frequently. Urban areas also have more foreign-born business owners who may leverage their international networks.

However, many of these differences suggest possible policy solutions. For instance, since cloud adoption depends on broadband availability, it follows that investing in digital infrastructure could boost rural exports. Also, rural manufacturers, especially in sectors like metals manufacturing, show comparable or higher export intensity per worker than their urban counterparts. So encouraging rural manufacturing would be one way to reduce the urban-rural export gap.

Rethinking trade and rural development

I think this research has important policy implications.

First, it shifts some of the focus away from other countries as the root cause of the trade deficit. And second, it bolsters the case for what economists call “place-based policies” targeting specific geographic areas – as opposed to “people-based policies,” which provide support directly to individuals.

Even though many economists dislike place-based policies, they are increasingly attracting both academic and governmental attention.

The 2022 CHIPS and Science Act had special significance to rural areas.

During the Biden administration, three major laws – the Inflation Reduction Act, the CHIPS and Science Act and the Infrastructure Investment and Jobs Act – directed significant federal funds to rural areas. About 43% of funds from those laws – or US$440 billion – was designated as either “rural relevant” or as “rural stipulated,” meaning the funds were either geographically targeted or designed to address disproportionately rural challenges.

Such massive investments in rural regions have led researchers and policymakers to question whether rural export underperformance stems from differences in observable endowments – in other words, things like access to broadband – or from inherent disadvantages that are much harder to deal with.

In my view, this research provides compelling evidence that much of the urban-rural export gap is due to unequal distribution of productive assets, rather than inherent rural disadvantages. With appropriate investments in digital infrastructure, human capital and support for export-capable industries, America’s rural regions could play a much larger role in global trade. These findings also suggest the value of continued federal support for rural development efforts.

In other words, if the U.S. wants to shrink its trade deficit, one answer could be more innovation in rural manufacturing.

About the Author:

Amitrajeet A. Batabyal, Distinguished Professor, Arthur J. Gosnell Professor of Economics, & Interim Head, Department of Sustainability, Rochester Institute of Technology

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

Economics & Fundamentals Opinions

13 May

Decentralized finance is booming – and so are the security risks. My team surveyed nearly 500 crypto investors and uncovered the most common mistakes

By Mingyi Liu, Georgia Institute of Technology

When the first cryptocurrency, Bitcoin, was proposed in 2008, the goal was simple: to create a digital currency free from banks and governments. Over time, that idea evolved into something much bigger: “decentralized finance,” or “DeFi.”

With decentralized finance, people trade, borrow and earn interest on crypto assets without relying on traditional intermediaries. DeFi services run on blockchains, which are essentially digital ledgers, and use “smart contracts” − self-executing code that automates financial transactions. Tens of billions of dollars have poured into the DeFi market.

But with innovation comes risks. The lack of centralized oversight has made crypto, including decentralized finance, a prime target for hackers and scammers. In 2024 alone, people lost nearly US$1.5 billion due to security exploits and fraud. And unlike traditional finance, there’s usually no way to recover stolen crypto.

As a computer scientist, I wanted to better understand how people perceive and respond to these risks. So my colleagues and I first conducted in-depth interviews with 14 crypto investors, then surveyed nearly 500 others to validate our findings.

Our study found that people often made the same mistakes, driven by recurring misconceptions and gaps in security awareness. Here are some of the most important.

Mistake 1: Thinking the blockchain guarantees security

Many people told us they thought decentralized finance was secure – but their reasoning wasn’t very convincing. Some seemed to confuse decentralized finance with blockchain technology itself, which is designed to ensure transactions are tamper-resistant through so-called “consensus mechanisms.” One told us that DeFi is secure “because a hacker would have to override an entire blockchain” to steal funds.

But services on the blockchain are still vulnerable to implementation and design flaws. These include smart contract breaches, in which bad guys exploit bugs in a service’s code, and front-end attacks, where a user interface is altered to redirect funds into a hacker’s wallet. A front-end attack was reportedly to blame for a recent $1.5 billion crypto heist.

CNBC reports on the record-breaking $1.5 billion crypto theft.

Mistake 2: Thinking safe keys mean safe funds

Another common misconception is that DeFi is secure if private keys are well stored. A private key is a secret code that allows someone to access their crypto assets. It’s true that in DeFi – unlike in centralized crypto finance where an exchange holds private keys – users have full control over their own private keys.

But even with perfect private key management, users can still lose funds by interacting with compromised DeFi platforms. That’s because safeguarding private keys can prevent only direct attacks targeting private key access, such as phishing attempts.

The people we spoke with also failed to follow best practices for securing their private keys. Using a hardware wallet – a physical device that stores private keys offline – is one of the most secure options for protecting keys from online threats. However, our study found that only a handful of participants actually used hardware wallets.

Mistake 3: Thinking 2-factor authentication is a silver bullet

Two-factor authentication, or 2FA, is a standard security mechanism in which two forms of verification are required to access an account. Think being texted a one-time code before you can log into your bank account.

To prevent account breaches, centralized crypto exchanges such as Binance and Coinbase use two-factor authentication for logins, account recovery and withdrawal confirmations. But while 2FA is crucial to security in the traditional and centralized crypto finance system, it plays a much smaller role in decentralized finance.

DeFi wallets give users access based on private key ownership rather than identity verification, which means traditional 2FA can’t be used. Instead, only 2FA-like mechanisms are available in DeFi. For instance, multisignature wallets require approval from multiple private key holders. However, if your private key is compromised, attackers can perform wallet operations on your behalf without any additional verification. In addition, even users who adopt 2FA-like measures can’t prevent the security breaches on the DeFi services’ end.

Unfortunately, our participants were overly confident regarding the effectiveness of 2FA, with one saying, “Two-factor authentication has been one of the best solutions for keeping wallets safe.” In our survey, 57.1% of users relied on 2FA as their only technical countermeasure against rug pulls – scams where project creators suddenly withdraw funds – and 49.3% did so for smart contract exploits. This misplaced trust could lead them to ignore more effective security strategies.

Mistake 4: Not managing token approvals

One such effective strategy is revoking token approvals. In DeFi, tokens are digital assets on a blockchain that represent value or rights, and users often need to approve smart contracts to access or spend them. But if you leave these approvals open, a malicious contract – or one that’s been hacked – can drain your wallet. So it’s crucial to routinely check all token approvals you’ve granted to prevent losses caused by fraudulent or hacked DeFi services. Specifically, you should limit spending allowances instead of using the default “unlimited” option, and revoke approvals for apps you no longer use or trust.

Worryingly, we found that only 10.8% and 16.3% of participants regularly checked and revoked token approvals to protect against rug pulls and smart contract exploits, respectively. In light of this, we recommend that wallet providers introduce a reminder feature to prompt users to review their token approvals periodically.

Mistake 5: Not learning from past incidents

Even after they’re hacked or scammed, people often don’t do anything to improve their security practices, we found. Just 17.6% of those who reported being victims of a DeFi scam regularly checked token approvals afterward. Worse, 26% took no action at all after a scam, and 16.4% doubled down by investing even more in other DeFi services.

Surprisingly, more than half of the victims said their belief in DeFi either stayed the same or grew stronger after the incident. One user who lost $4,700 due to a rug-pull incident said, “My belief in cryptocurrency has grown stronger after that because I made good money from it.” That person added, “An opportunity to make money is something I believe in.” This suggests that DeFi users’ financial motivations can sometimes outweigh their security concerns – and, perhaps, their better judgment.

There’s no one-size-fits-all solution to DeFi security. But awareness is the first step. To stay safe, crypto investors should use hardware wallets, revoke unused token approvals and continually learn new techniques to protect themselves from evolving threats. Most importantly, they should stay rational and not let the allure of profits cloud their security practices.

About the Author:

Mingyi Liu, Ph.D. student in Computer Science, Georgia Institute of Technology

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

Cryptocurrencies Opinions

12 May

Markets rally on 90-day US-China trade truce

By ForexTime

Risk-on returns on China-US trade truce
Both sides announce 115% reduction in tariffs for 90-days
Global equities, USDInd, Bitcoin and Oil rally
Gold tumbles almost 3%, JPY & CHF weaken
US500: US CPI sparked moves of ↑ 0.9% & ↓ 2.0% over past year

Investors sprinted toward riskier assets on Monday after China and the United States agreed to slash reciprocal tariffs for 90 days.

After positive talks over the weekends, both sides announced a massive 115% reduction in tariffs, representing a major step toward de-escalating a trade war.

China will lower tariffs on US goods to 10% from 125%.
The United States will cut tariffs on Chinese goods to 30% from 145%.

In response to the risk-on mood, Asian equities surged, European markets opened higher, while US futures flashed green.

FXTM’s USDInd jumped over 1%.
Bitcoin pushed beyond $105,000.
Crude oil rallied more than 2%.

Safe-haven assets took a beating as

Gold shed almost 3%.
The Yen and Swiss franc fell against all G10 currencies.

This breakthrough in the China and US talks has uplifted market sentiment and eased fears around a global recession.

Further signs of progress within this 90-day window could spell more gains for stock markets. However, if talks stall down the road or tensions return – risk assets will be in the firing line.

Beyond US-China trade developments, it’s a week packed with more key data and earnings from the largest Chinese companies.

The likes of JD.com, Tencent and Alibaba will publish their latest quarterly results which may influence FXTM’s CHINAH index.

On the data front, the CPI report is likely to impact Fed expectations, resulting in more volatility for US equities, USDInd and gold prices.

Speaking of equities, FXTM’s US500 has punched above key resistance at 5800.

The incoming CPI report and speech by Fed Chair Jerome Powell could determine whether this resistance is conquered.

Over the past 12 months, the US CPI has triggered upside moves of as much as 0.9% or declines of 2.0% in a 6-hour window post-release.

A solid breakout and daily close above 5800 may encourage an incline toward 5880.
Should prices remain below 5800, this may trigger a sell-off toward 5715.

Article by ForexTime

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

Economics & Fundamentals Opinions

11 May

Currency Speculators drop US Dollar Index bets for 8th time in 11 weeks

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday May 6th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by Mexican Peso & British Pound

The COT currency market speculator bets were overall lower this week as four out of the eleven currency markets we cover had higher positioning while the other seven markets had lower speculator contracts.

Leading the gains for the currency markets was the Mexican Peso (9,043 contracts) with the British Pound (5,276 contracts), the Australian Dollar (1,571 contracts) and the Swiss Franc (740 contracts) also seeing positive weeks.

The currencies seeing declines in speculator bets on the week were the Brazilian Real (-43,377 contracts), the Canadian Dollar (-3,440 contracts), the Japanese Yen (-2,353 contracts), the New Zealand Dollar (-1,612 contracts), the US Dollar Index (-659 contracts), Bitcoin (-550 contracts) and with the EuroFX (-78 contracts) also recording lower bets on the week.

Currency Speculators drop US Dollar Index bets for 8th time in 11 weeks

Highlighting the data in the currency speculator positions is a weakening US Dollar trend while the other major currencies are seeing stronger weekly speculator positions and trends.

The US Dollar index has been in an overall bearish position for three consecutive weeks as the USD Index positions have fallen in 8 out of the last 11 weeks for a total decline of over -17,000 contracts in that time period. This has dropped the speculator positioning to the most bearish level since December 2024. The USD Index speculator strength score, a measure of the current spec level compared to its past 3-year range, is currently at just a 4.4% score and underscores how weak the currency has become in speculator sentiment.

Weak Start to 2025 for the U.S. Dollar

The USD Index exchange rate has had a very weak start to 2025 as it has fallen approximately 9% since the beginning of the year. The American currency Index currently sits at the important psychological level of 100.00 and how the currency navigates this level can determine where things go as the 100 level has acted as strong support or resistance many times in the past, including in 2023 and 2024. The USD Index has recently fallen below its 200-week moving average and has now been under this level for multiple weeks for the first time since 2021.

Euro, GBP, Yen and Peso bullish bets

The Euro, the British Pound Sterling, the Mexican Peso and the Japanese Yen currently all have bullish speculator contract standings against the US Dollar. The Japanese Yen bets have been on a tear in the past few months with speculator bets rising in 13 out of the past 16 weeks for a total gain of +206,270 contracts in that period. The Yen speculator positions, however, did dip a little bit this week and came down from the all-time record high of last week at just under +180,000 bullish contracts.

The Euro and the British pound sterling contracts have also been steadily building higher bullish positions over the past few months with current levels at +75,719 contracts and +29,235 contracts, respectively. The Mexican Peso positions have been trending up as well as it has risen for three consecutive weeks and now the Mexican Peso speculator position is at its highest level since July of 2024 at +68,555 contracts.

Meanwhile, the Swiss Franc, the Canadian Dollar, the Australian Dollar, and the New Zealand Dollar contracts have all been in bearish positions but have been improving week to week from their lowest bearish levels in the first quarter of 2025.

Biggest Change of the Week: BRL

The outlier change this week was the Brazilian Real which saw speculator bets fall by over -43,000 contracts this week. This sharp decline was following four straight weeks of gains that had boosted the overall bullish position to the highest level on record last week. This week’s reduction basically cut the Brazilian real speculator position in third and it now sits currently around +25,000 net contracts. The Brazilian Real’s exchange rate against the Dollar this week rose slightly and gained for a fourth consecutive week. Overall, the Real is about ten percent higher vs the USD since the start of the year.

Currencies Data:

Legend: Open Interest | Speculators Current Net Position | Weekly Specs Change | Specs Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by Japanese Yen & Brazilian Real

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Japanese Yen (99 percent) and the Brazilian Real (65 percent) lead the currency markets this week. The Mexican Peso (64 percent), EuroFX (58 percent) and the Canadian Dollar (56 percent) come in as the next highest in the weekly strength scores.

On the downside, the US Dollar Index (4 percent) and Bitcoin (12 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent). The next lowest strength scores are the New Zealand Dollar (38 percent) and the Australian Dollar (42 percent).

3-Year Strength Statistics:
US Dollar Index (4.4 percent) vs US Dollar Index previous week (5.8 percent)
EuroFX (57.6 percent) vs EuroFX previous week (57.6 percent)
British Pound Sterling (49.2 percent) vs British Pound Sterling previous week (46.9 percent)
Japanese Yen (99.4 percent) vs Japanese Yen previous week (100.0 percent)
Swiss Franc (53.1 percent) vs Swiss Franc previous week (51.6 percent)
Canadian Dollar (56.3 percent) vs Canadian Dollar previous week (57.8 percent)
Australian Dollar (42.0 percent) vs Australian Dollar previous week (40.9 percent)
New Zealand Dollar (37.7 percent) vs New Zealand Dollar previous week (39.6 percent)
Mexican Peso (63.7 percent) vs Mexican Peso previous week (59.1 percent)
Brazilian Real (64.8 percent) vs Brazilian Real previous week (100.0 percent)
Bitcoin (12.4 percent) vs Bitcoin previous week (24.4 percent)

Swiss Franc & Canadian Dollar top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Swiss Franc (28 percent) and the Canadian Dollar (26 percent) lead the past six weeks trends for the currencies. The Australian Dollar (21 percent), the New Zealand Dollar (21 percent) and the Japanese Yen (14 percent) are the next highest positive movers in the 3-Year trends data.

The Bitcoin (-65 percent) leads the downside trend scores currently with the US Dollar Index (-18 percent), Brazilian Real (-12 percent) and the British Pound (-7 percent) following next with lower trend scores.

3-Year Strength Trends:
US Dollar Index (-17.8 percent) vs US Dollar Index previous week (-15.8 percent)
EuroFX (3.9 percent) vs EuroFX previous week (6.2 percent)
British Pound Sterling (-6.8 percent) vs British Pound Sterling previous week (-2.4 percent)
Japanese Yen (14.2 percent) vs Japanese Yen previous week (15.5 percent)
Swiss Franc (28.4 percent) vs Swiss Franc previous week (20.4 percent)
Canadian Dollar (26.4 percent) vs Canadian Dollar previous week (31.1 percent)
Australian Dollar (20.6 percent) vs Australian Dollar previous week (14.5 percent)
New Zealand Dollar (21.3 percent) vs New Zealand Dollar previous week (21.9 percent)
Mexican Peso (4.9 percent) vs Mexican Peso previous week (1.8 percent)
Brazilian Real (-12.5 percent) vs Brazilian Real previous week (22.4 percent)
Bitcoin (-64.6 percent) vs Bitcoin previous week (-67.0 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week was a net position of -1,108 contracts in the data reported through Tuesday. This was a weekly fall of -659 contracts from the previous week which had a total of -449 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.4 percent. The commercials are Bullish-Extreme with a score of 99.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 11.6 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	60.0	27.3	7.2
– Percent of Open Interest Shorts:	63.1	20.3	11.1
– Net Position:	-1,108	2,486	-1,378
– Gross Longs:	21,251	9,682	2,559
– Gross Shorts:	22,359	7,196	3,937
– Long to Short Ratio:	1.0 to 1	1.3 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	4.4	99.0	11.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-17.8	20.6	-25.2

Euro Currency Futures:

The Euro Currency large speculator standing this week was a net position of 75,719 contracts in the data reported through Tuesday. This was a weekly lowering of -78 contracts from the previous week which had a total of 75,797 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 57.6 percent. The commercials are Bearish with a score of 36.5 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 96.8 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	26.3	55.0	13.2
– Percent of Open Interest Shorts:	16.1	72.8	5.6
– Net Position:	75,719	-131,339	55,620
– Gross Longs:	194,192	405,535	97,040
– Gross Shorts:	118,473	536,874	41,420
– Long to Short Ratio:	1.6 to 1	0.8 to 1	2.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	57.6	36.5	96.8
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	3.9	-10.6	46.3

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week was a net position of 29,235 contracts in the data reported through Tuesday. This was a weekly rise of 5,276 contracts from the previous week which had a total of 23,959 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.2 percent. The commercials are Bearish with a score of 47.6 percent and the small traders (not shown in chart) are Bullish with a score of 73.7 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	47.1	28.9	15.8
– Percent of Open Interest Shorts:	32.5	46.2	13.1
– Net Position:	29,235	-34,736	5,501
– Gross Longs:	94,384	57,797	31,693
– Gross Shorts:	65,149	92,533	26,192
– Long to Short Ratio:	1.4 to 1	0.6 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	49.2	47.6	73.7
– Strength Index Reading (3 Year Range):	Bearish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-6.8	6.3	-1.9

Japanese Yen Futures:

The Japanese Yen large speculator standing this week was a net position of 176,859 contracts in the data reported through Tuesday. This was a weekly lowering of -2,353 contracts from the previous week which had a total of 179,212 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 99.4 percent. The commercials are Bearish-Extreme with a score of 0.3 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 100.0 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	54.3	28.2	11.8
– Percent of Open Interest Shorts:	7.2	81.6	5.5
– Net Position:	176,859	-200,612	23,753
– Gross Longs:	204,008	105,878	44,435
– Gross Shorts:	27,149	306,490	20,682
– Long to Short Ratio:	7.5 to 1	0.3 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	99.4	0.3	100.0
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	14.2	-16.4	30.8

Swiss Franc Futures:

The Swiss Franc large speculator standing this week was a net position of -23,574 contracts in the data reported through Tuesday. This was a weekly advance of 740 contracts from the previous week which had a total of -24,314 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 53.1 percent. The commercials are Bearish with a score of 39.3 percent and the small traders (not shown in chart) are Bullish with a score of 75.1 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	7.9	74.1	17.9
– Percent of Open Interest Shorts:	41.3	39.4	19.1
– Net Position:	-23,574	24,432	-858
– Gross Longs:	5,558	52,272	12,634
– Gross Shorts:	29,132	27,840	13,492
– Long to Short Ratio:	0.2 to 1	1.9 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	53.1	39.3	75.1
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	28.4	-35.3	32.4

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week was a net position of -70,645 contracts in the data reported through Tuesday. This was a weekly decline of -3,440 contracts from the previous week which had a total of -67,205 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 56.3 percent. The commercials are Bearish with a score of 46.0 percent and the small traders (not shown in chart) are Bearish with a score of 27.3 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	6.5	82.2	9.4
– Percent of Open Interest Shorts:	34.2	52.2	11.7
– Net Position:	-70,645	76,469	-5,824
– Gross Longs:	16,677	209,571	24,048
– Gross Shorts:	87,322	133,102	29,872
– Long to Short Ratio:	0.2 to 1	1.6 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	56.3	46.0	27.3
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	26.4	-27.0	13.8

Australian Dollar Futures:

The Australian Dollar large speculator standing this week was a net position of -48,372 contracts in the data reported through Tuesday. This was a weekly boost of 1,571 contracts from the previous week which had a total of -49,943 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 42.0 percent. The commercials are Bullish with a score of 59.6 percent and the small traders (not shown in chart) are Bearish with a score of 45.6 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	14.3	66.4	12.5
– Percent of Open Interest Shorts:	40.8	39.2	13.2
– Net Position:	-48,372	49,713	-1,341
– Gross Longs:	26,243	121,539	22,896
– Gross Shorts:	74,615	71,826	24,237
– Long to Short Ratio:	0.4 to 1	1.7 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	42.0	59.6	45.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	20.6	-19.4	9.3

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week was a net position of -23,135 contracts in the data reported through Tuesday. This was a weekly fall of -1,612 contracts from the previous week which had a total of -21,523 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 37.7 percent. The commercials are Bullish with a score of 59.8 percent and the small traders (not shown in chart) are Bullish with a score of 57.3 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	16.8	74.6	7.5
– Percent of Open Interest Shorts:	55.1	36.8	7.0
– Net Position:	-23,135	22,830	305
– Gross Longs:	10,188	45,115	4,533
– Gross Shorts:	33,323	22,285	4,228
– Long to Short Ratio:	0.3 to 1	2.0 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	37.7	59.8	57.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	21.3	-22.5	20.4

Mexican Peso Futures:

The Mexican Peso large speculator standing this week was a net position of 68,555 contracts in the data reported through Tuesday. This was a weekly advance of 9,043 contracts from the previous week which had a total of 59,512 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 63.7 percent. The commercials are Bearish with a score of 38.4 percent and the small traders (not shown in chart) are Bearish with a score of 29.0 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	67.9	27.1	3.8
– Percent of Open Interest Shorts:	14.2	81.8	2.9
– Net Position:	68,555	-69,687	1,132
– Gross Longs:	86,615	34,566	4,872
– Gross Shorts:	18,060	104,253	3,740
– Long to Short Ratio:	4.8 to 1	0.3 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	63.7	38.4	29.0
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	4.9	-5.6	8.2

Brazilian Real Futures:

The Brazilian Real large speculator standing this week was a net position of 24,961 contracts in the data reported through Tuesday. This was a weekly fall of -43,377 contracts from the previous week which had a total of 68,338 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 64.8 percent. The commercials are Bearish with a score of 34.2 percent and the small traders (not shown in chart) are Bearish with a score of 37.6 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	68.5	26.9	4.4
– Percent of Open Interest Shorts:	40.5	58.1	1.1
– Net Position:	24,961	-27,927	2,966
– Gross Longs:	61,099	23,965	3,952
– Gross Shorts:	36,138	51,892	986
– Long to Short Ratio:	1.7 to 1	0.5 to 1	4.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	64.8	34.2	37.6
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-12.5	11.7	4.3

Bitcoin Futures:

The Bitcoin large speculator standing this week was a net position of -1,781 contracts in the data reported through Tuesday. This was a weekly reduction of -550 contracts from the previous week which had a total of -1,231 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 12.4 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 41.0 percent.

Price Trend-Following Model: Weak Downtrend

Our weekly trend-following model classifies the current market price position as: Weak Downtrend.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	82.0	7.1	4.9
– Percent of Open Interest Shorts:	88.4	1.6	4.0
– Net Position:	-1,781	1,541	240
– Gross Longs:	22,936	1,982	1,360
– Gross Shorts:	24,717	441	1,120
– Long to Short Ratio:	0.9 to 1	4.5 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	12.4	100.0	41.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-64.6	65.9	16.4

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

COT Updates Forex and Currency News Opinions

11 May

Speculator Extremes: Brent, VIX, 5-Year & Ultra 10-Year lead Bullish & Bearish Positions

By InvestMacro

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on May 6th.

This weekly Extreme Positions report highlights the Most Bullish and Most Bearish Positions for the speculator category. Extreme positioning in these markets can foreshadow strong moves in the underlying market.

To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish. (Compare Strength Index scores across all markets in the data table or cot leaders table)

Here Are This Week’s Most Bullish Speculator Positions:

Brent Oil

The Brent Oil speculator position comes in as the most bullish extreme standing this week as the Brent speculator level is currently at a 100 percent score of its 3-year range.

The six-week trend for the percent strength score totaled a rise by 15.0 this week. The overall net speculator position was a total of 2,495 net contracts this week with a gain of 17,584 contract in the weekly speculator bets.

Speculators or Non-Commercials Notes:
Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.
These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.

VIX

The VIX speculator position comes in tied at the top of the extreme standings this week. The VIX speculator level is also now at a 100 percent score of its 3-year range.

The six-week trend for the percent strength score was an increase by 17.0 this week. The speculator position registered 10,943 net contracts this week with a weekly rise by 6,703 contracts in speculator bets.

Japanese Yen

The Japanese Yen speculator position comes in third this week in the extreme standings. The JPY speculator level resides at a 99 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at an increase of 14.0 this week. The overall speculator position was 176,859 net contracts this week with a dip by -2,353 contracts in the weekly speculator bets.

Nikkei 225

The Nikkei 225 speculator position comes up number four in the extreme standings this week as the Nikkei 225 speculator level is now at a 96 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a rise of 35.0 this week. The overall speculator position was 1,904 net contracts this week with an advance by 2,025 contracts in the speculator bets.

Nasdaq

The Nasdaq speculator position rounds out the top five in this week’s bullish extreme standings. The Nasdaq-Mini speculator level sits at a 90 percent score of its 3-year range. The six-week trend for the speculator strength score was an increase by 37.0 this week.

The speculator position was 32,847 net contracts this week with a change of 1,984 contracts in the weekly speculator bets.

This Week’s Most Bearish Speculator Positions:

5-Year Bond

The 5-Year Bond speculator position comes in as the most bearish extreme standing this week as the 5-Year speculator level is at a 0 percent score of its 3-year range.

The six-week trend for the speculator strength score was a drop by -18.0 this week. The overall speculator position was -2,296,496 net contracts this week with a reduction by -3,952 contracts in the speculator bets.

Heating Oil

The Heating Oil speculator position comes in next for the most bearish extreme standing on the week. The Heating Oil speculator level is at a 2 percent score of its 3-year range.

The six-week trend for the speculator strength score is -30.0 this week. The speculator position was -31,610 net contracts this week with a decline of -11,576 contracts in the weekly speculator bets.

US Dollar Index

The US Dollar Index speculator position comes in as third most bearish extreme standing of the week. The USD Index speculator level resides at a 4 percent score of its 3-year range.

The six-week trend for the speculator strength score is -18.0 this week. The overall speculator position was -1,108 net contracts this week with a decrease of -659 contracts in the speculator bets.

Wheat

The Wheat speculator position comes in as this week’s fourth most bearish extreme standing. The Wheat speculator level is at a 6 percent score of its 3-year range.

The six-week trend for the speculator strength score was -17.0 this week. The speculator position was -107,537 net contracts this week with a gain of 9,271 contracts in the weekly speculator bets.

Bitcoin

Finally, the Bitcoin speculator position comes in as the fifth most bearish extreme standing for this week. The Bitcoin speculator level is at a 12 percent score of its 3-year range.

The six-week trend for the speculator strength score was -65.0 this week. The speculator position was -1,781 net contracts this week with a dip lower by -550 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

Bonds COT Updates Opinions

09 May

Week Ahead: Dollar ready to flex its muscles?

By ForexTime

FXTM’s USDInd ↑ 2.5% from 2025 low
US-China trade talks over weekend could rock USD
US CPI + data dump + Powell Speech = more USD volatility?
US CPI sparked moves of ↑ 0.4% & ↓ 1.0% over past year
Technical levels: 102.20, 100.00 & 99.20

The United States has struck a “breakthrough” deal with the United Kingdom, marking the first trade agreement since Trump announced sweeping tariffs last month.

And this has left markets buzzing with anticipation ahead of US-China trade talks in Geneva this weekend.

Beyond global trade developments, high-impact data, including the latest US CPI, corporate earnings and speeches by policymakers will be in focus:

Saturday, 10th May

CN50: China PPI, CPI
USDInd: US-China trade talks in Switzerland

Monday, 12th May

JP225: Japan current account
MXN: Mexico industrial production
EUR: EU finance ministers meet in Brussels

Tuesday, 13th May

CHINAH: JD.com earnings
AUD: Australia consumer, business confidence
GER40: Germany ZEW survey
ZAR: South Africa unemployment
GBP: UK jobless claims, unemployment
USDInd: US April CPI, Trump visits Saudi Arabia, Qatar and United Arab Emirates

Wednesday, 14th May

CHINAH: Tencent earnings
GER40: Germany CPI
JPY: Japan PPI
US500: Fed Vice Chair Philip Jefferson, San Francisco Fed President Mary Daly speech

Thursday, 15th May

CHINAH: Alibaba earnings
AUD: Australia unemployment
CAD: Canada existing home sales, housing starts
EU50: Eurozone GDP, industrial production
NZD: New Zealand food prices
UK100: UK GDP, industrial production
US30: Walmart earnings.
USDInd: US retail sales, PPI, Empire manufacturing, industrial production, jobless claims, Fed Chair Jerome Powell speech

Friday, 16th May

JP225: Japan GDP, industrial production
NZD: New Zealand Business, NZ manufacturing PMI
US500: US housing starts, University of Michigan consumer sentiment, import prices

FXTM’s USDInd is under the spotlight after securing a solid daily close above the psychological 100.00 level.

The USDInd tracks the dollar’s performance against a basket of six different G10 currencies, including the Euro, British Pound, Japanese Yen, and Canadian dollar.

The dollar has appreciated against most currencies this week thanks to Powell’s hawkish tone and easing trade tensions.

Another major move could be brewing for the USDInd and here are 4 reasons why:

1) US-China trade talks in Switzerland

Over the weekend, US and Chinese officials will engage in talks to de-escalate trade tensions between the world’s two largest economies.

According to reports, the Trump administration is considering a significant tariff reduction to temper economic pain and soothe tensions. However, China has adopted a more defensive approach toward trade talks, reiterating its call for the US to cancel unilateral tariffs.

Should the talks end on a positive note and open doors to further negotiations, the dollar could rally as US recession fears cool.
If the talks end on a sour note and result in fresh trade uncertainty, the dollar may weaken as US recession fears mount.

2) US April CPI report

The April Consumer Price Index (CPI) published on Tuesday 13th May could influence Fed cut bets.

Markets are forecasting:

CPI year-on-year (April 2024 vs. April 2025) to remain unchanged at 2.4%
Core CPI year-on-year to remain unchanged at 2.8%
CPI month-on-month (April 2025 vs March 2025) to rise 0.3% from -0.1% in the prior month
Core CPI month-on-month to rise 0.3% from 0.1% in the prior month

Over the past 12 months, the US CPI has triggered upside moves of as much as 0.4% or declines of 1.0% in a 6-hour window post-release.

A hotter-than-expected US CPI print could push the USDInd higher as Fed cut bets cool.
Should the inflation report print below forecast, this may drag the USDInd lower.

3) US data dump + Powell speech

A string of key US economic data and speeches by numerous Fed officials could inject the dollar with more volatility.

Investors will direct their attention towards the latest US retail sales report, Producer Prices Index (PPI), and industrial production among other data releases, to gauge the health of the US economy. Speeches by various Fed officials, including Fed Chair Jerome Powell may provide fresh clues on the Fed’s next move.

Should overall US economic data print above forecasts and Fed speakers strike a hawkish note, this could boost the USDInd.
Soft US economic data and dovish-sounding Fed officials may weigh on the USDInd.

4) Technical forces

The USDInd could be gearing up for further upside but this will depend on whether the 100.00 level proves to be reliable support. Prices are trading above the 50, 100 and 200-day SMA and respecting a bullish channel.

Should 100.00 prove reliable support, prices may venture toward the 50-day SMA at 102.20 and 103.60.
Weakness below 100.00 may encourage a decline back towards 99.20 and 98.00.

Article by ForexTime

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

Forex and Currency News Opinions

07 May

Can Fed rate decision extend US stocks’ rebound?

By ForexTime

Fed widely expected to leave US rates unchanged
Markets fully anticipate next Fed rate cut in July; 1-in-3 chance of June cut
Hints of earlier-than-expected rate cut could send US stock indices soaring
Risk assets may pare recent gains if Chair Powell pushes back on rate cuts
See below for past and projected post-Fed reactions for US500, NAS100, US30

The Fed is set to dominate the market’s attention overnight.

To be clear, the FOMC (Federal Open Market Committee) is widely expected to keep its benchmark rates unchanged at 4.25 – 4.50%.

Given its forward-looking nature, markets are already trying to anticipate the outcomes of FOMC meetings in the months ahead.

Here’s what markets currently predict:

June: 1-in-3 chance (33.7%)
July: 25-basis point rate cut fully priced in!

Of course, those odds could drastically change in the days, weeks, and months ahead, not just depending on what the Fed tells us this week.

The chances of a Fed rate cut may also depend heavily on whether US President Donald Trump’s tariffs further weaken US economic growth, forcing the Fed into a sooner-than-expected rate cut.

NOTE: The FOMC lowers interest rates in order to shore up economic growth.

What to look out for today (Wednesday, May 7th)?

Markets will be combing through the:

FOMC policy statement released at 6:00PM GMT on Wednesday, May 7th, along with …
Fed Chair Jerome Powell’s press conference (due 30 minutes after the FOMC statement).

Both the FOMC statement and Powell’s spoken words will be scrutinized for clues about the timing of the next Fed rate cut.

Judging by recent commentary, Fed officials appear to be adopting a wait-and-see approach, in assessing the tariffs’ impact on inflation and growth in the world’s largest economy.

After all, recent weeks have shown that tariffs can be announced, and then retracted, seemingly at POTUS’s whims and fancy.

The ongoing narrative is that …

If US tariffs are kept at elevated levels for longer, the greater the potential damage on the US economy.

And given that this week’s FOMC meeting also comes amid the 90-day pause on some of the harshest tariffs, the Fed may be inclined to maintain this wait-and-see approach, without jolting markets in the interim.

Also note that, at this week’s meeting, the Fed will not be releasing a new dot plot (forecasts by each FOMC member on US interest rate levels in the future), nor fresh economic projections.

Hence, any incoming policy signals, if any, are set to stem from the FOMC policy statement and Powell’s press conference.

How might US stock indices react to today’s Fed meeting?

BULLISH: Should Chair Powell and his FOMC colleagues sound “dovish” and start paving the way for rate cuts, that should cheer on risk assets that sends US stock indices higher.
BEARISH: If Chair Powell and his FOMC colleagues instead strike a “hawkish” tone, suggesting that US interest rates could stay higher for longer to quell any tariff-induced spikes to US inflation, that could force US stock indices to pare its stunning rebound since early April.

Here’s what markets predict these major US stock indices could react in the 6 hours after today’s FOMC decision:

S&P 500 (tracked by FXTM’s US500) could:

rise by as much as 1.4%
fall by as much as 1.6

Nasdaq 100 (tracked by FXTM’s NAS100) could:

rise/fall by as much as 1.9%

Dow Jones Industrial Average (tracked by FXTM’s US30) could:

rise as much as 1.1%
fall by as much as 1.7%

How have US stock indices reacted to recent Fed meetings?

These Fed rate decisions of course hold tremendous sway over markets.

Here’s a sample of the “biggest” reactions by major US stock indices within 6 hours of Fed decisions from the past 12 months:

S&P 500 (US500)

rose as much as 1.7% (Sept 2024)
fell as much as 3% (Dec 2024)

Nasdaq 100 (NAS100)

rose as much as 2.35% (Sept 2024)
fell as much as 3.5% (Dec 2024)

Dow Jones Industrial Average (US30)

rose as much as 1.2% (Sept 2024)
fell as much as 2.7% (Dec 2024)

Over the next 12 months …

Wall Street still predicts double-digit potential gains for US stock indices by this time next year.

Here are the projections for 12-month potential upside for 3 major US stock indices:

S&P 500 (tracked by FXTM’s US500 index): 16%
(S&P 500 to cross above 6500 by this time next year)
Nasdaq 100 (tracked by FXTM’s NAS100 index): 18%
(Nasdaq 100 to cross above 23,300 by this time next year)
Dow Jones Industrial Average (tracked by FXTM’s US30 index): 14%
(Dow to cross above 46,700 by this time next year)

Looking at the price charts …

Widely-followed simple moving averages (SMA) stand in the way of bulls (those hoping prices will go higher) of these stock indexes, and could act as immediate resistance levels post-FOMC meeting:

200-day SMA potential immediate resistance for the US500

US500: Potential Scenarios

BULLISH: Greater prospects of a mid-year Fed rate cut could send the US500 towards its 200-day SMA / 5700 psychological level. Further north lies its 100-day SMA and 5800 target.

BEARISH: A break below its 50-day SMA could test initial support at the 5,500 round number, with its 21-day SMA and 5400 price region potentially offering stronger support.

200-day SMA potential immediate resistance for the NAS100
Imagen

NAS100: Potential Scenarios

BULLISH: A break above the 200-day SMA could see the NAS100 striving for its upside target of 20,800.

BEARISH: The NAS100 may look to find support at its 50-day SMA around the 19,400 region. Further support could arrive around the 21-day SMA.

50-day SMA immediate resistance for the US30

US30: Potential Scenarios

BULLISH: A break above the 50-day SMA could see the US30 striving for its immediate upside target of 41,800. Further north, the price region around its 200-day SMA / 42,500 level / 100-day SMA could lend stronger resistance to bulls.

BEARISH: A second consecutive daily close below the 41k mark for the US30 could see prices faltering to the big, round 40,000 number, where its 21-day SMA also currently lies.

Article by ForexTime

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

Opinions Stock Market News

02 May

Week Ahead: Crude caught in crosswinds ahead of OPEC+ showdown

By ForexTime

Crude ends April ↓ 18.6%
OPEC+ expected to sign off another supply hike
Positive US-China trade may support oil bulls
Fed decision sparked moves of ↑ 0.4% & ↓ 0.9% over past year
Technical levels: $65, $60 & $55

As the countdown draws closer to the key US jobs report this afternoon (Friday, 2nd May), markets are bracing for more volatility in the week ahead.

An influx of high-impact data, risk events and key central bank decisions could present fresh trading opportunities:

Saturday, 3rd May

AUD: Australia general election

Sunday, 4th May

Asian Development Bank annual meeting

Monday, 5th May

UK markets closed for Bank holiday
OIL: OPEC+ meeting on production levels
USDInd: US ISM services

Tuesday, 6th May

AUD: Australia building approvals
CN50: China Caixin services PMI
EUR: Eurozone HCOB services PMI, PPI
US500: US Treasury Secretary Scott Bessent testimony

Wednesday, 7th May

CNY: China forex reserves
EUR: Eurozone retail sales
GER40: Germany factory orders
TWN: Taiwan CPI
US500: US Fed rate decision

Thursday, 8th May

GER40: Germany industrial production
ZAR: South Africa manufacturing production
UK100: BOE rate decision
SEK: Sweden rate decision
RUS200: US jobless claims

Friday, 9th May

CN50: China trade
JP225: Japan household spending, cash earnings
CAD: Canada employment
USDInd: Fed governors Lisa Cook, Christopher Waller, St. Louis Fed President Alberto Musalem, Cleveland Fed President Beth Hammack, Chicago Fed President Austan Goolsbee speech

Our focus lands on oil benchmarks which have shed over 17% year-to-date amid global recession fears and oversupply worries.

Crude prices have recently rebounded on easing trade tensions and new sanctions on Iran. However, the global commodity is still headed for a weekly loss of more than 6%.

And things could spice up further in the week ahead. Here are 4 reasons why:

1) OPEC+ meeting on production levels

On Monday 5th May, OPEC+ will meet to decide the supply policy for June.

Earlier in April, Saudi Arabia shocked markets by pushing OPEC+ for faster output increases in May after Kazakhstan and Iraq produced well above quotas.

Markets expect the cartel to sign off on another supply surge to punish over-producing members.

But most importantly, infighting within the cartel and overproduction could be a recipe for disaster for oil, especially if it leads to a “free-for-all” where members pump at will.

Oil prices may tumble if OPEC+ pushes for faster production hikes with any signs of internal instability fuelling downside pressures.
Should OPEC+ surprise by slowing down or pausing output hikes, this could boost oil prices as oversupply fears cool.

2) US-China trade talks

Market sentiment has received a boost after China said it’s evaluating trade talks with the United States. This comes after weeks of conflicting reports and uncertainty around US-China trade talks.

If this soothes tensions and opens the doors to concrete negotiations, this could cool concerns about a global recession.

More positive progress with US-China trade talks may support oil prices as investors become more hopeful about the demand outlook.
Should the talks lead to more uncertainty or result in renewed tensions, oil prices may take a hit.

3) Fed rate decision

The Fed is widely expected to leave interest rates unchanged at its May meeting, but all eyes will be on Fed Chair Jerome Powell’s press conference.

Friday’s incoming US jobs report along with developments on the trade front, may influence what tone Powell strikes on Wednesday 7th May.

Traders are currently pricing in 3 rate cuts in 2025 with the probability of a 4th one by December at 67%. Any major shifts to these expectations may influence oil prices.

Lower interest rates could stimulate economic growth, which fuels oil demand.
Lower interest rates may also lead to a weaker dollar, boosting oil which is priced in dollars.

The same can be said vice versa.

If Powell strikes a hawkish note and the dollar appreciates, oil prices may slip.
If Powell sounds more dovish and signals faster rate cuts, oil prices may jump.

Over the past 12 months, the Fed rate decision has triggered upside moves on CRUDE of as much as 0.4% or declines of 0.9% in a 6-hour window post-release.

4) Technical forces

Crude is under pressure on the daily charts with prices trading below the 50, 100 and 200-day SMA. However, the Relative Strength Index (RSI) is close to 30, signalling that prices are oversold.

A solid breakout and daily close above $60 may pave a path toward the 50-day SMA near $65.00 and potentially the 100-day SMA $68.80 in the medium to longer term.
Should $60 prove to be a tough resistance, prices may slip back towards $55 and levels not seen since January 2021 at $51.50.

Note: This chart was created before the release of the US NFP report on Friday 2nd May.

Article by ForexTime

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

Energy Opinions

02 May

Whether GDP swings up or down, there are limits to what it says about the economy and your place in it

By Sophie Mitra, Fordham University

The Bureau of Economic Analysis released the latest U.S. gross domestic product data on April 30. In the first three months of 2025, it said, GDP contracted by 0.3%. The GDP growth rate captures the pace at which the total value of goods and services grows or shrinks. Together with unemployment and inflation, it usually receives a lot of attention as an indicator of economic performance.

Some economists and analysts said the economy might not be as bad as this rate’s decline might suggest. While this is the first time in three years that GDP has shrunk instead of growing, it is a relatively small decline.

This raises a critical question: Does a relatively small GDP contraction mean the economy is in trouble? I have spent much of my working life studying economic well-being at the level of individuals or families.

What I’ve learned can offer a different lens on the economy than you’d get from just focusing on the most popular indicators, such as the GDP growth rate.

GDP problems

The GDP growth rate has many limitations as an economic indicator. It captures only a very narrow slice of economic activity: goods and services. It pays no attention to what is produced, how it is produced or how people assess their economic lives.

GDP gets a lot of attention, in part, because of the misconception that economics only has to do with market transactions, money and wealth. But economics is also about people and their livelihoods.

Many economists would agree that economics treats wealth or the production of goods and services as means to improve human lives.

Since the 1990s, a number of international commissions and research projects have come up with ways to go beyond GDP. In 2008, the French government asked two Nobel Prize winners, Joseph Stiglitz and Amartya Sen, as well as the late economist Jean-Paul Fitoussi, to put together an international commission of experts to come up with new ways to measure economic performance and progress. In their 2010 report, they argued that there is a need to “shift emphasis from measuring economic production to measuring people’s well-being.”

Considering complementary metrics

One approach is to use a composite index that combines data on a variety of aspects of a country’s well-being into a single statistic. That one number could unfold into a detailed picture of the situation of a country if you zoom into each underlying indicator, by demographic group or region.

The production of such composite indices has flourished. For example, the Human Development Index of the United Nations, started in 1990, covers income per capita, life expectancy at birth and education. This index shows how focusing on GDP alone can mislead the public about a country’s economic performance.

In 2024, the U.S. ranked fifth in the world in terms of GDP per capita, but was in 20th place on the Human Development Index due to relatively lower life expectancy and years of schooling compared to other countries at the top of the list, like Switzerland and Norway.

Monitoring other indicators

Another approach is to rely on a larger number of indicators that are frequently updated. These other data points reflect a variety of perspectives about the economy, including subjective ones that convey personal perceptions and experiences.

For instance, in addition to inflation rates, there is data on stress due to inflation as well as inflation expectations. Both offer insights into people’s perceptions, perspectives and experiences about inflation.

During the COVID-19 pandemic, the annual U.S. inflation rate increased from 1% in July 2020 to 8.5% in July 2022. My research partners and I found, using U.S. Census data, that more than 3 in 4 adults in the U.S. were experiencing moderate or high levels of stress due to inflation at that time and continued to do so even after inflation went down in 2023.

More recently, the Trump administration’s sporadic tariff changes have made future prices more uncertain, which exposes people to risks. That, in turn, makes people adjust their expectations and feel worse off.

The share of consumers expecting higher inflation rates has climbed sharply in 2025, while consumer confidence has declined abruptly. About 1 in 3 consumers expect that there will be fewer jobs created in the next six months, which is almost as low as during the Great Recession of 2007-2009.

Consumers also have negative expectations about their own future income and worry about their own economic status.

At this moment, the U.S. economy has not officially entered a recession – which requires a longer period of GDP contraction than just one quarter. Although unemployment and inflation rates remain relatively low, the broad picture of the economy that takes into account people’s expectations and perceptions is troubling. To be clear, I’m not saying that just because of what the GDP data may indicate.

This article includes material from an article originally published on Aug. 7, 2018.

About the Author:

Sophie Mitra, Professor of Economics, Fordham University

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

Economics & Fundamentals Opinions

29 Apr

GBP/USD Hits New High: The Pound Defies Market Pressures

By RoboForex Analytical Department

The British pound has reached another three-year peak against the US dollar, stabilising around 1.3400.

Key factors driving GBP/USD strength

Sterling is closing April with its strongest monthly performance since November 2023, gaining over 3% against the US dollar.

Two key factors support the pound’s resilience:

Monetary policy divergence – Markets expect the Bank of England (BoE) to slow the pace of interest rate cuts compared to other central banks. Current projections suggest the BoE will reduce rates by 85 basis points in 2025, roughly in line with expectations for the US Federal Reserve.
Dollar alternatives in demand – Investors seek alternatives to the US dollar, and the UK appears less vulnerable to US tariff risks. A 90-day moratorium on increased US tariffs expires in late July, renewing global economic uncertainties.

Against this backdrop, the UK and its currency appear more stable than many peers.

Technical analysis: GBP/USD

H4 chart

GBP/USD continues to consolidate around 1.3344, with the range now extending to 1.3440.
A downside retest of 1.3344 is expected, followed by potential upward momentum towards 1.3455, defining the range boundaries.
A break below consolidation could trigger a downward wave targeting 1.3080 as the initial objective.
The MACD indicator supports this outlook, with its signal line above zero but poised for a decline.

H1 chart

The pair has broken above 1.3344, achieving a local target at 1.3440
A corrective decline towards 1.3344 is anticipated before potential renewed growth towards 1.3455
The Stochastic oscillator aligns with this scenario, with its signal line below 20 and primed for an upward move towards 80

Conclusion

The pound remains defensive yet strong, buoyed by relative monetary policy stability and its appeal as a dollar alternative. Technically, the pair is testing key levels, with further direction contingent on consolidation breaks.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Forex and Currency News Opinions

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