• Tag Archives FOMC
  • Asian Metals Market Update: July-27-2017

    Factors which can affect markets
    Short covering and renewed building of long positions will be there in gold and silver if they continue to rise today and tomorrow. If gold rises after the US July nonfarm payrolls (on 4th August) then I expect it to rise to $1508.10 before the end of this quarter. Short term gold and silver are bullish. Medium term to long term will trend after the US NFP will be the key.
    Expectation that the pace of interest rate hikes will be slower than markets discounted resulted in a crash of US dollar and zoom of gold. Copper had already risen before the FOMC so the impact was not felt. Next in line is next week’s US July nonfarm payrolls. Interest rate chapter of the Federal Reserve is closed for now. Technically a higher close today and tomorrow in gold, silver, copper and crude oil can result in another five percent gains by next week.

    This post was published at GoldSeek on 27 July 2017.

  • World Stock Markets, Gold, Boosted By Dovish FOMC Statement Wed. PM

    (Kitco News) – Global stock markets were mostly firmer overnight in the wake of a U. S. Federal Reserve meeting that produced a statement most of the markets deemed as leaning to the dovish side of U. S. monetary policy. Recent corporate earnings reports have also been mostly upbeat. U. S. stock indexes are pointed toward higher and record high openings when the New York day session begins.
    Gold is posting solid gains Thursday in the wake of the dovish Fed statement that pushed the U. S. dollar index to a 13-month low. Reports overnight said India is moving to make ‘paper’ gold (such as sovereign gold bonds) more attractive to its domestic investors, in order to reduce demand for actual gold bullion.

    This post was published at Wall Street Examiner on July 27, 2017.

  • FOMC Preview: Just 2 Things To Watch For In Today’s Fed Statement

    Unlike the June Fed meeting, the FOMC announcement at 2pm today is expected to be an uneventful affair: as DB’s Jim Reid pointed out earlier, “given its late July and given the Fed will likely announce an end to balance sheet reinvestment in September (starting from October), this could be a relatively dull meeting.”
    Big picture: the FOMC is expected to keep interest rates unchanged at this meeting at 1.00%-1.25%, after hiking last month. According to RanSquawk, all analysts surveyed by Reuters expect the Fed to keep rates unchanged. The market agrees with them: Fed Funds currently price in a 0% chance of a rate hike today.
    And, as BofA notes, the market is clearly not expecting any Fed balance sheet reduction today either:

    This post was published at Zero Hedge on Jul 26, 2017.

  • Stocks and Precious Metals Charts – Nocturne

    “A horse walks into a bar, the bartender says, ‘Why the long face?’”
    And so we had both an FOMC and a precious metals option expiration on the Comex today.
    Stocks are continuing to edge higher, although with a big less verve than previously.
    Pundits are now saying that a crash is probably at least two months away, so now is a good time to buy more stocks.
    You cannot make this stuff up.
    I think that the theory is that when the Fed starts unwinding their balance sheet in September, that the air of liquidity, which is one of key components of these bubbles, is going to start coming out of the markets much faster than it went in.
    And the result may be terrific – not with a bang, but a whimper.

    This post was published at Jesses Crossroads Cafe on 26 JULY 2017.

  • Ahead Of The Fed: Strongest Demand For 2Y Paper Since 2015

    With the FOMC members currently huddling deep inside the bowels of the Marriner Eccles building, perhaps scheming how to spook markets by announcing a surprise rate hike tomorrow, one would have assumed demand for 2 Year paper in today’s auction would be less than stellar. One would be wrong, because moments ago the Treasury sold $26bn in 2 year paper to what was clearly an overabundance of demand: the high yield of 1.395% stopped through the When Issued 1.401% by 0.6 bps, and was the highest yield going back to October 2008.
    The bid-to-cover rose to 3.06 from 3.03 in June, and was above the six previous auction average of 2.84. It was also the highest Bid to Cover since November 2015.
    The internals were also rather impressive, with Indirects taking down 58.5%, above the 56.6% in June, and above the 6MMA of 54.1%. Directs were awarded 16.9%, down slightly from 18.4% last month and above the 6 month average of 13.7%. Combined these two meant record buyside interest, leaving Dealers with just 24.6% of the auction, down from 25.0% and below the 32.1% 6month average. This was the lowest Dealer award on record.
    In other words, if anyone was worried about a surprise announcement by the Fed tomorrow, one which would send 2Y yields spiking, it wasn’t to be found among the bidders for today’s auction.

    This post was published at Zero Hedge on Jul 25, 2017.

  • Markets On Hold Ahead Of FOMC Meeting Conclusion This P.M.

    This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
    (Kitco News) – World stock markets were mostly firmer in subdued trading overnight, as the marketplace awaits today’s FOMC meeting conclusion. U. S. stock indexes are slightly higher just ahead of the New York day session.
    Gold prices are moderately lower today on more profit-taking from the shorter-term futures traders, after recent price gains.
    Traders and investors are awaiting the conclusion of the Federal Reserve’s Open Market Committee meeting (FOMC) that began Tuesday morning and ends early this afternoon with a statement. No changes in U. S. monetary policy are expected. However, the Fed could indicate the timing of reducing its big balance sheet of U. S. securities. The tone of the FOMC statement will also be important for markets. Just recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U. S. monetary policy.
    In overnight news, the U. K.’s second-quarter GDP came in at up 0.3% on the quarter and up 1.7%, year-on-year. Those numbers were right in line with market expectations.

    This post was published at Wall Street Examiner on July 26, 2017.

  • FOMC Decision and Comex Option Expiration For Precious Metals Tomorrow – Beware the Leaven of the Pharisees

    “Beware the leaven of the Pharisees, which is pious, hollow hypocrisy. There is nothing covered that shall not be revealed, and hidden, that shall not be made known. Whatever has been said in the darkness shall be heard in the light: and what has been whispered behind closed doors shall be shouted from the roof tops.”
    Luke 12:1-3
    ‘Those among the fortunate rich who are not, in the rigorous sense, damned, can understand the neediness of poverty, because they are needy themselves, after a fashion; but they cannot understand true impoverishment.
    Capable of giving alms, perhaps, but incapable of stripping themselves bare, they will be moved to the sound of beautiful music, at Jesus’s sufferings – but His Cross, the reality of the self-denial of His Cross, will horrify them. For they want it all out of gold, bathed in light, costly and of little weight; pleasant to see, and hanging from a beautiful woman’s throat.’
    Lon Bloy
    The charts are still pretty much lined up in areas where one might expect to see some movement when volatility returns to the markets.
    The option expiry tomorrow is more significant for gold than silver.

    This post was published at Jesses Crossroads Cafe on 25 JULY 2017.

  • Asian Metals Market Update: July-25-2017

    Factors which can affect markets
    Gold and silver need to break and trade over $1262 and $16.64 for another wave of rise. Sell off will be there if gold does not break $1262 and silver does not break $16.64. Trend after the FOMC statement will be the key. Cautious optimism for gold and silver despite the bullish technical. Crude oil seems to have formed a short term floor around $44 while copper seems to be in the race to outperform silver and zinc.
    Any reduction in Trump related risk is the only key factor that can cause precious metals to move into a short term bearish phase. I still expect an October interest rate hike by the Federal Reserve. Whereas markets are factoring in a December interest rate hike. One needs to watch for Trump related news as US economy is on a strong footing. Mild slowdown in US economy (if any) will be cyclical due to advent of American summer driving season.

    This post was published at GoldSeek on 25 July 2017.

  • World Stock Markets Mixed, Quiet; FOMC Meeting In Spotlight

    This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
    Global equity markets were steady to narrowly mixed in quieter overnight dealings. U. S. stock indexes are pointed toward firmer openings when the New York day session begins. The U. S. indexes are at or near record highs with no early chart clues to suggest they are topping out.
    Gold prices are moderately lower in pre-U. S. session trading, on some normal profit taking from recent gains that saw prices hit a four-week high on Monday.
    Focus of the world marketplace is on the Federal Reserve’s Open Market Committee meeting (FOMC) that begins Tuesday morning and ends early Wednesday afternoon with a statement. No changes in U. S. monetary policy are expected. However, the Fed could indicate the timing of reducing its big balance sheet of U. S. securities. The tone of the FOMC statement will also be important for markets. Just recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U. S. monetary policy.
    In overnight news, the closely watched German Ifo business sentiment index rose to a record 116.0 in July, from 115.2 in June. A July reading of 114.9 was forecast.

    This post was published at Wall Street Examiner on July 25, 2017.

  • Why A Dollar Rebound May Be Imminent Even As Crash Insurance Costs Hit Nosebleed Levels

    Is the bottom in for the dollar yet?
    After hitting a 14 month low, the Bloomberg Dollar Index saw a modest gain of 0.1% as markets awaited this week’s FOMC meeting and kept a wary eye on Capitol Hill hearings which involve close members of the Trump administration. Quoted by Bloomberg, traders described flows as modest amid the elevated event risk we laid out earlier this morning. Besides another potential surprise from the suddenly dovish Fed, traders were keeping a weary eye on Capitol Hill hearings Monday and Wednesday that include Jared Kushner, Donald Jr and Paul Manafort, and what these could mean for Trump’s fiscal agenda. At the same time, the Fed is expected to keep rates and policies on hold, though it may elaborate on balance-sheet reduction or the timing of any future rate increases.
    To be sure, negative sentiment against the dollar has been pervasive, and as we noted yesterday when looking at the latest CFTC Commitment of Traders update, net specs are now the most short they have been the USD doing back to 2013.

    This post was published at Zero Hedge on Jul 24, 2017.

  • Asian Metals Market Update: July-24-2017

    News will be the key. Traders and short term investors should be very careful over the next two weeks. There is lot of economic news as well as political news which can result in prices zooming one day and nosediving the next. Day traders should also trade very carefully on days when prices range trade.
    Gold and silver will continue to rise as long as problems with Trump persist. FOMC meet along with other US economic data releases this week can result in a correction but may not move them into a short term bearish phase. I see renewed interest in traders to go for short US dollar and long bullion. Industrial metals also rose due to US dollar weakness.
    There is no FOMC meet in August. US economic data releases from next week till September’s FOMC meet will decide the number of interest rate hikes this year and in the first quarter of next year.

    This post was published at GoldSeek on 24 July 2017.

  • Dollar Slide Continues

    The US dollar lost ground against all the major currencies, save sterling, over the past week, and also fell against most emerging market currencies. There is little from a technical or fundamental perspective, including next week’s FOMC meeting, that suggests a reversal is at hand.
    Investors accept that the US economy rebounded in Q2 from another below average Q1 performance. They accept that the jobs market is still healthy. What they doubt is that the Federal Reserve will raise interest rates in the face of price pressures that have moderated. The fiscal course of the Trump Administration is also doubted. Not to put too fine a point on it, but the mess over health care, has left investors with a bad taste of what the legislative meal will look like.
    At the same time the trajectory of the US policy mix moves away from the very supportive tighter monetary/looser fiscal policy, negative considerations for Europe have been lifted or substantially reduced. Looking at the charts, the turn came in late April when it became clear the National Front challenge in was going to be repulsed. The political threat in Europe dissipated. The regional economy is enjoying the broadest and strongest expansion in a decade. Given the improvement in the balance of risk, the ECB began adjusting its communication to help prepare the markets for an adjustment in the accommodation. This spurred rise in market rates.
    The Dollar Index fell for a second consecutive week. It has fallen in six of the past seven sessions. The week’s 1.25% decline took it blow 94.00, its lowest level since June 2016. This area is important from a technical perspective, and a convincing break could open the door to another 3-5% decline. Daily and weekly technical indicators are over-extended as one would imagine, but only the Slow Stochastics have stopped falling. Given the pace and extent of the Dollar Index slide, and the positioning, we want to be sensitive to any reversal pattern in the coming sessions, but our point is that there is not much nearby chart-based support.

    This post was published at Zero Hedge on Jul 21, 2017.

  • Stocks and Precious Metals Charts – One Day In Texas

    ‘Beware the Jabberwock, my son!
    The jaws that bite, the claws that catch!
    Beware the Jubjub bird, and shun
    The frumious Bandersnatch!’
    Lewis Carroll
    “Grigory Yefimovich Rasputin –
    spiritual advisor to the Romanovs.
    In 1916, at a dinner in his honor,
    he was poisoned, shot stabbed,
    clubbed, drowned, and castrated.”
    Hellboy, 2003
    “A shudder in the loins engenders there
    The broken wall, the burning roof and tower
    And Agamemnon dead.
    Being so caught up,
    So mastered by the brute blood of the air,
    Did she put on his knowledge with his power.”
    W. B. Yeats
    Tomorrow is a stock options expiration.
    Next week there will be a precious metals option expiration on the Comex and an FOMC meeting.
    If the metals can make it past these, then the path to a breakout may be clear.
    Stocks look toppy. Wait for it.

    This post was published at Jesses Crossroads Cafe on 20 JULY 2017.

  • One Trader Warns – Next Week’s FOMC Meeting May Not Be As “Benign” As The Market Believes

    If ever there was a chance for The Fed to ‘sneak’ in a rate-hike while everyone is distracted, it’s next Wednesday as Trump Jr testifies to Congress. As former FX trader Richard Breslow remarks, The Fed “woulda, coulda, shoulda [hike] next week… but certainly won’t,” noting that if they are truly concerned about the “stretched valuations” taking an extended vacation through the summer is the worst thing The Fed can do…
    Via Bloomberg,
    It feels strange but, curiously, not entirely pointless, to suggest the Fed do something that there’s zero chance they will even contemplate. I’m talking about next week’s FOMC meeting and using it as an opportunity to be bold. This is mostly a meeting they hold in mid-summer to justify the fact that no one has any desire to be in Washington DC in August, and September is a long way off.
    But taking an extended holiday is precisely what they oughtn’t do. The only thing it will accomplish is forcing, as well as encouraging, investors to carry on with the types of trades every right-minded observer thinks has a large element of recklessness. Which is just a somewhat less nice word for ‘financial conditions remain benign.’

    This post was published at Zero Hedge on Jul 20, 2017.

  • The Fed Has Hit the ‘Pause’ Button

    ‘Last week the Fed raised the white flag on further rate hikes. There won’t be any for the foreseeable future.
    No rate hikes are coming at the July, September or November Fed FOMC meetings. The earliest rate hike might be at the December 13, 2017 FOMC meeting, but even that has a less than 50% probability as of today. I’ll update those probabilities using my proprietary models in the weeks and months ahead.
    The white flag of surrender came in two public comments by two of the only four FOMC members whose opinions really count. The four voting members of the FOMC worth listening to are Janet Yellen, Stan Fischer, Bill Dudley and Lael Brainard.
    Yellen and Brainard made public remarks last week. Yellen’s testimony before Congress received the usual saturation coverage. Brainard’s remarks to an academic conference at Columbia University received far less coverage, but were perhaps far more important in terms of the impact of Fed policy on markets including gold.
    These comments by the two FOMC members should be put in the context of my model forecast for Fed behavior. I expect the Fed to raise rates 0.25% at FOMC meetings every March, June, September and December from now until mid-2019 until the Fed’s policy rate reaches a ‘normalized’ level of 3.25%.

    This post was published at Wall Street Examiner on July 18, 2017.

  • Yellen on Inflation — Doug Noland

    It’s fair to say that the whole issue of ‘inflation’ confounds the Fed these days. Despite antiquated analytical frameworks and econometric models, the Federal Reserve is showing zero inclination to rethink its approach. At the minimum, objective policy analysis would recognize today’s nebulous link between monetary stimulus and consumer price inflation. Rational thinking would downgrade CPI as a policy guidepost, especially relative to indicators of broader price and financial stability. Still, consumer prices rising slightly below 2% have somehow become central to the argument for maintaining aggressive monetary accommodation.
    The nature of economic output has fundamentally changed – from mass-produced high tech hardware, to limitless software and digitalized content, to endless pharmaceuticals and wellness to energy alternatives to, even, the proliferation of organic foods – just to get started. There is today essentially unlimited capacity to supply many of the things we now use in everyday life (sopping up purchasing power like a sponge). Much of this supply is sourced overseas, which further diminishes the traditional relationship between domestic monetary conditions and consumer price inflation.
    These dynamics have unfolded over years and are well recognized in the marketplace. To be sure, ongoing tepid consumer price inflation seems to be the one view that markets hold with strong conviction. So when Yellen suggested that below target inflation would alter the trajectory of Fed ‘normalization,’ the markets immediately took notice. When she again referred to the ‘neutral rate’ and implied that the Fed was currently near neutral, this further signaled a Fed that has developed its own notion of what these days constitutes ‘normal.’ Throw in that the FOMC plans to pause rate increases while gauging market reaction to its (cautious) balance sheet operations, and it has become apparent to the markets that the Fed won’t be pushing rates much higher any time soon.

    This post was published at Credit Bubble Bulletin

  • Goldman Is Troubled By The Fed’s Growing Warnings About High Asset Prices

    With both the S&P, and global stock markets, closing last week at new all time highs, it is safe to say that any and all warnings about “froth“, and perhaps a bubble in the market, as Deutsche Bank characterized it last week have been ignored. And yet, as Goldman’s economist team writes over the weekend, the recent rise in warnings about “risk levels” and asset prices by Fed officials is concerning: “Fed officials have expressed greater concern about asset prices and financial stability risk recently, a change from their more relaxed view last fall. In particular, the minutes to the June FOMC meeting highlighted concern about high equity valuations and low volatility and drew a connection between potential overheating in the real economy and financial markets.”
    To underscore this point, here is a recap of recent Fed warnings about asset prices, which have increased significantly since the presidential election:
    Janet Yellen, July 12, 2017
    So in looking at asset prices and valuations, we try not to opine on whether they are correct or not correct. But as you asked what the potential spillovers or impacts on financial stability could be of asset price revaluations – my assessment of that is that as assets prices have moved up, we have not seen a substantial increase in borrowing based on those asset price movements. We have a financial system and banking system that is well capitalized and strong and I believe it is resilient.

    This post was published at Zero Hedge on Jul 16, 2017.

  • Asian Metals Market Update: July-14-2017

    Lack of new news of Trump and Russia resulted in the fall in gold and silver prices. Movement of gold prices will be dependent on Trump-Russia connection news. Traders will start taking positions for the FOMC meet on 26th July after the release of today’s CPI numbers and Retail sales numbers. Next week only US housing numbers are there and it will not have any sustaining effect.
    Currency markets movement will affect bullion prices. I am more concerned over movement in the UK pound. If the UK pound falls this quarter, then I see renewed safe haven demand not just from the UK but from all across Europe. A crash in the cable (if any) can result in a renewed short term bull rally in gold to $1376. However right now there is no big hype to invest in gold despite prices being near $1200.

    This post was published at GoldSeek on 14 July 2017.

  • How Dumb Is the Fed?

    Bent and Distorted POITOU, FRANCE – This morning, we are wondering: How dumb is the Fed?
    The question was prompted by this comment by former Fed insider Chris Whalen at The Institutional Risk Analyst blog.
    [O]ur message to the folks in Jackson Hole this week [at the annual central banker meeting there] is that the end of the Fed’s reckless experiment in social engineering via QE and near-zero interest rates will end in tears.
    ‘Momentum’ stocks like Tesla, to paraphrase our friend Dani Hughes on CNBC last week, will adjust and the mother of all rotations into bonds and defensive stocks will ensue. We must wonder aloud if Chair Yellen and her colleagues on the FOMC fully understand what they have done to the US equity markets. […]
    Once the hopeful souls who’ve driven bellwethers such as Tesla and Amazon into the stratosphere realize that the debt driven game of stock repurchases really is over, then we’ll see a panic rotation back into fixed income and defensive stocks.

    This post was published at Acting-Man on July 14, 2017.

  • US Economy Keeps Moving Into Summer Storm

    One of the kookiest moments last month came when Fed Chairwoman Yellen spoke about seeing no financial collapse in sight during our lifetimes
    ‘Would I say there will never ever be another financial crisis? No. Probably that would be going a little too far, but I do think that we’re much safer, and I hope that it will not be in our lifetimes, and I don’t believe it will be.’ (CNBCPlay video for quote on next crisis.)
    That certainly calls to mind the times when Chairman Ben Break-the-banky pontificated about there being no housing bubble and no recession in sight:
    Yellen’s predecessor, Ben Bernanke, once famously called problems in the subprime mortgage market ‘contained,’ a statement that would be proven wrong when the collapse of illiquid mortgage-backed securities cascaded through Wall Street and contributed to the worst economic downturn since the Great Depression.
    Asked at a recent FOMC meeting about any possible problem with banks still being too big to fail, Yellen only said, ‘I’m not aware of anything concrete to react to.’
    Nice to know she’s sound asleep while sugar plums dance in her head, bringing forth prophecies of good times for the rest of everyone’s foreseeable life … or, at least, the rest of hers.

    This post was published at GoldSeek on 13 July 2017.