DBS Double topped forming, doesn't seems good.DBS SGX:D05 chart is forming double top. Once $29.39 support level is broken, we will very likely to see price declining towards $21.87 base on 1:1 wave.
Duration towards mid term.
DYODD!
Banking
TRLY Undervalued / Fed Fix Long SetupThe 2H chart on TLRY shows a volume profile showing the highest concentration of shares
traded at $2.65 or about 15% above the current price. Short sellers dominated there. Price has
descended down onto the support/demand zone. It is near to tow standard deviations below
the mean VWAP and so very undervalued.
Federal legislation intended to remedy the cannabis industry's issues with banking, commercial
loans and other financial liquidity has begun. This is huge for this subsector and could cause a
breakout from the deep undervalued territory.
I will take a long setup here for a decent amount of shares and hedge with a single
put option for risk management/insurance. ACB is similarly positioned.
LUCKILY THE TEST TACTIC SUSTAINEDIT TOOK MONTHS OF PREPARATION.
A LITTLE OVER A YEAR AGO... NOTICED VERY PECULIAR PATTERNS ON A LOT OF VERY STURDY CHARTS. EXAMINED NEARLY 400 TICKERS... SOMETHING VERY IMPORTANT STOOD OUT.
DID SOME CALCULATIONS AND TESTED THE THEORY WITH A LIVE PORTFOLIO.
WHEN THE BANKING CRISIS STARTED PACKING IN, THE PORTFOLIO WAS RED AT FIRST. THEN EVERYTHING WENT GREEN... AND STAYED GREEN. LIKE M A G I C.
THE BANKING CRISIS WAS PERFECT FOR THIS PORTFOLIO TYPE.
VERY TUNED IN. EVERYTHING WORKED JUST AS PLANNED.
THERE ARE PLENTY MORE TO GO...
WILL TEST OUT THE LONGEVITY NOW.
WE ARE IN A CYCLE AND IT'S CLEAR AS DAY.
Strange things can and will happen.
The performance of our markets are extraordinarily fascinating!
Watched the market throughout the 2020 fallout... iT was nothing short of miraculous.
We are all lucky.
Count your blessings.
Take care.
P.S. Let's not get too excited. We have work to do!
🔥 Bitcoin To $100k This Year? Rising From The Ashes Of BanksIn this analysis I want to talk about the possibility of Bitcoin going to 100k this year. This is a speculative analysis, but still based on real-world macro. Take it with a grain of salt.
Bitcoin going to 100k in the middle of a banking and inflation crisis, with a FED that's increasing the interest rates? I would've said it's impossible. Not only that, but it's in stark contrast with the usual 4-year halving cycles.
However, something has changed over the last months. In March, during the Silicon Valley Bank's crisis, we saw a massive bullish move. This had to do with the fact that people lost confidence in (regional) banks, and decided to get self-custody over their own money and buy Bitcoin (and gold). Since then, BTC has been trading bullish alongside Gold, hedging against the risk of further banking failures.
More banks have gone under over the last few days. Signature Bank and First Republic bank went down and had to be sold and/or saved. 3/4 of the biggest banks that ever went under, went under in 2023.
While the stock markets sold off over the last few days, BTC gained strength. Most notable was the reaction after the interest rate hike yesterday. The SP500 fell from a cliff, whilst Bitcoin saw a huge move upwards.
Check out the analysis below where I go more into detail on why this seemingly inverse relationship exists:
Albeit a small probability, I think that the idea of BTC going to 100k this year is not even that far-fetched. In my eyes, the banking sector is far from safe, especially now that the FED has increased the interest rates yet again and is very unlikely to reduce the rates in the coming months. More banks failing means more risk to your money, means more people buying BTC and gaining self-custody over their own money.
And yes, more banks are failing as we speak. PacWest Bancorp has seen a 75% drop since the first of May.
Smaller, regional banks falling are bullish, but won't get BTC to 100k. There is a possibility of the largest banks failing, think JPMorgan or Bank of America. And if they do, we can experience a massive influx of buying that we've never seen before, purely based on fear.
In normal circumstances, the FED will aggressively cut the interest rates and start printing money to safe the banks. They can't really do that anymore because it will cause inflation. However, they most likely will because saving one of the largest US banks is going to be more important than inflation, at least in the short-term.
In case you enjoyed this analysis, please give it a like. Feel free to share your thoughts below 🙏.
🔥 Bitcoin Bearish Channel: Break Out On Banks Failing?In my latest BTC analysis I talked about the bearish channel in which Bitcoin was trading. My expectation was a move downwards, since the market looked more bearish than bullish.
After a quick drop, BTC recovered again on regional banking failures.
With yesterday's FOMC meeting rising the interest rates by another 0.25%, the risks of more (regional) banks becoming insolvent has only increased. This is good news for Bitcoin because people will take out their money from banks and store it in BTC (or gold, for that matter).
We can break out of the channel today, making it a bull-flag pattern. Looking at 30k and 31k in the short-term in case the bullish pressure persists. Be patient for the break out. Also note the blue dotted support line, which can be retested in the near future.
Shadow Banking The shadow banking system is something you're probably not familiar with.
Until today!
the shadow banking system is made up of mainly investment banks i.e. your market whales or market makers, money market funds i.e. like schwab and vanguard, and hedge funds. these financial entities dont give out loans to you or I, but rather trade amongst themselves. which is what is known as the shadow banking system.
one of the main functions of the Shadow Banking system is to provide liquidity aka money (which is mostly made up anyways) to the financial system. for example if a whale wants to move a massive amount of money into a position, or what happened to Zimbabwe a while back and give an entire nation a loan at a ridiculous amount of interest they're able to do so, or take a massive position in a promising opportunity and need capital fast!
How does this work? How do you ensure that a hedge fund will pay back on their loan?
collateral!
Usually in the form of government issued bonds and bills. one can trade an equilivent amount of t-bills plus interest for X-amount of dollars to carry out said transaction.
example:
Hedge fund A wants to take a position shorting the RMBS market. (strictly coincidental) Hedge Fund A is so confident in their analysis they are willing to take a whales position. they need the capital. well like all good risk management practices they have off set their high beta shares with low risk positions. the lowest risk investment you can have is a US Bond or Treasury Bill.
So, Investment bank A says okay I can lend you 10 Billion Dollars at a 4% interest rate per day for 3 days, if you default I keep your Bonds. The swap happens.
Now, Hedge Fund A has not only to make their money back on the bond trade, but they have to make at least 4.01% to make the trade profitable and they have 3 days to do it.
Another way this can be done is Hedge Fund B says I too am going to short the RMBS market but i am going to offer it to all the investment banks and other hedge funds. So they offer it as an investment opportunity. the offering fund takes a small fee and the winnings or losings are dealt accordingly.
while this might sound a a little familiar... well it is! names and places have been changed to protect the innocent.
The major critique the financial system has with this Shadow Banking is that its not really regulated. becasue going back to our example with Hedge Fund A
If Hedge Fund A Doesnt pay then Investment Bank A can shoot their interest rate from 4% to 40% in one day making the loan almost impossible to pay back causing the Hedge Fund to collapse and all the unsuspecting investors in the Hedge Fund are out of pocket.
Or my personal favorite. Lets Say Hedge Fund (HFA) A is going to short the RMBS market with a 10 Billion dollar Position for 3 days and Investment Bank A (IBA) wants to short the CMBS market with a $20 billion position for 5 days. well the trade between HFA and IBA happens 10 billion will float to HFA at a 4% interest rate per day for 3 days.
Now, IBA wants to short CMBSs they will approach Life Insurance Group A (LIA) and will offer $20 billion dollars in bonds 10 from their reserve and the 10 billion from HFA. at a 5% per day interest rate for 5 days.
Now, you might see the problem. but i will continue.
Day 3 is up. HFA made their little profit. IBA doesnt have their bonds (because theyre with LIA). So, IBA will probably give HFA 10 billion of their own bonds which for this post is what happens.
HFA is squared away with IBA.
Now, in the 5 days that IBA is holding LIAs money the fed decided to raise interest rates 200 base points. the bond market yields sky rocket causing their prices to plummet.
but fortunately IBA made 10% on their risk they pay LIA their 5% interest and take a 5% loss on their bonds and come out BE or Break even.
As you can see in this overly simplified example how if any one part of these parties failed it could be detrimental for a lot of people. Because peoples pensions are held by hedge funds, countries and other governments have their investments with the Investment Bank peoples money and loans are held with the Life Insurance groups.
I believe this shadow banking system is also the Stock Markets (yes the entire stock markets) Stop Loss!
BBRI: The Advancing Phase and Recovery of Banking Sectors? Hello Fellow Global Stock Investor/Trader, Here's a Technical outlook on BBRI!
Support the channel by giving us a thumbs up and sharing your opinions in the comment below!
Technical Analysis
BBRI is a breakout of the Pennant Pattern after retracing on the Fibonacci golden ratio area. The MACD Indicator made a golden cross below the zero level area, which indicated a potential bullish movement ahead.
All other explanations are presented on the chart.
The roadmap will be invalid after reaching the target/support area.
"Disclaimer: The outlook is only for educational purposes, not a recommendation to put a long or short position on the BBRI"
Lows 30s by October?This could go sideways for 2-3 months. If that happens, then most likely it will hot low 30s by October this year.
HDFC BANKHello and welcome to this analysis
From COVID lows in this weekly time frame its appears to be in its terminal 5th wave.
After making an expanding diagonal (horn) in a sideways corrective its now set for an attempt for a new high which could see a medium term top formation in it.
As per Elliott Wave after 5 up waves a stock goes into a corrective, since this is weekly (3 years of rally) the next correction can be deep in terms of both price and time.
We might see a lot of positive news being announced over the next few weeks as it advances into new territory, which is the norm when a stock appears to be concluding its entire wave structure.
An ultra bullish count would suggest stock sustaining above 1800 else this path is likely to be correct.
Short term trading bullish
Medium term exit on rally
Capitec long position looking goodWe entered a long on JSE:CPI based off of the crossing of the EMA's and the turning up of the stochastic and the MACD. The trade is looking good so far with it being about a 3rd of the way to the target at 1925. It may find a bit of resistance at the current level, but I think we can potentially see a nice profit at the target if this momentum continues.
Quality is back in focus, amidst the banking turmoilHistory never repeats itself, but it often does rhyme. The recent collapse of Silicon Valley Bank (SVB) and Signature Bank in the US and the forced takeover of Credit Suisse by rival UBS have triggered concerns of contagion across the global financial system. The current stress in the banking sector is reminiscent of the 2008 financial crisis. However, unlike the 2008 financial crisis, uncertainty is not centred on the quality of assets on bank balance sheets but instead on the potential for deposit flight.
Tough ride for Banks ahead
US regional banks have witnessed significant deposit outflows which, combined with unrealised losses on their security holdings, have seen banks consuming their liquid assets as a very fast pace. In turn, sentiment towards European banks has deteriorated. This is evident in the widening of debt risk premia, making it more expensive for banks to fund their operations. It’s important to note that banks were already tightening lending standards prior to recent events. So, lending conditions are likely to tighten further as deposits shrink at small and regional US banks and regulators respond to the new risk environment. The turn of events in the banking sector have led to higher uncertainty which is likely to be reflected in higher volatility in credit markets. So far, the impact on other sectors has been fairly contained, but a further deterioration of bank credit quality could drag other industries lower as well. We are still in the early innings, so the range of repercussions remains wide.
Traditional defensive sectors offer more protection in prior weakening credit cycles
On analysing the impact of a further rise (by 200Bps) in credit spreads on US and European debt (highlighted by the dark blue bars) we found that not all equity sectors will be impacted equally on the downside. In fact, traditional defensive sectors like utilities, consumer staples and healthcare could offer some protection in comparison to cyclical sectors such as banks, energy and real estate.
Since March 8, 2023, the steepest price corrections have been centred around the banking and commodity related sectors such as energy and materials, while technology, healthcare, consumer staples and utilities have managed to escape the rout illustrated by the grey bars. The historical sector performance (in the light blue bars) during Eurozone debt crisis (the second half of 2011), confirm a similar pattern whereby the traditional defensive sectors tend to shield investors when spreads widen.
Europe earnings hold forth despite the banking turmoil
Interestingly despite the recent banking turmoil, the global earnings revision ratio continued to show resilience in March. Europe stood out as the only region with more upgrades than downgrades. Earnings remain the key driver of equity market performance. Europe has clearly gotten off to a strong start and it will be interesting to see if European earnings expectations can hold up as credit conditions deteriorate.
Within Europe we analysed the sectors that were most exposed to the banking stress. By observing the beta of the sectors in the EuroStoxx 600 Index relative to regional banking spreads, we found that real estate, financials, industrials, materials, and energy were most exposed on the downside to the high banking stress. On the contrary, consumer staples, information technology, utilities and healthcare showed more resilience.
When the going gets tough, quality gets going
Investors should focus on companies with strong balance sheets which we often tend to find within the quality factor. Quality stocks, characterised by a higher earnings yield compared to its dividend yield alongside higher return on equity (ROE) and return on assets (ROA), would offer a higher margin of safety in periods of higher volatility.
Conclusion
While central banks in US, Europe and UK continued their hawkish stance at their most recent policy-setting meetings, the evolving banking crisis could alter the path for monetary policy ahead. Chair Powell conceded that tightening financial conditions could have the same impact as another quarter point rate hike or more from the Fed.
Given the rising concerns on the risk of banking industry contagion, shrinking corporate profits and central bank policy ahead we continue to believe that positioning your equity exposure towards the quality factor would be prudent.
BlackRock says the market is WRONG ....The World’s Biggest Asset Manager With $9 Trillion AUM, BlackRock are saying that the markets Are WRONG By Pricing In Interest Rate Cuts. There is a divergence between what the Fed is saying that they are going to do and what the markets are pricing in terms of interest rate bets. The Fed is saying “We aren’t going to cut rates”, but the market is focusing on the banking crises and thinks that will force their hand.
BlackRock says the market is WRONG and they don’t see any rate cuts this year.
I think the US 10Y Yield bounced off some key support last week down to 3.25 and currently the market is side lined. There are some very clear levels to watch on the US 10Y yield. But while above 3.25 the longer term up move for the US 10Y Yield is intact and only a close below this level would trigger a correction lower toward 3.00 and 2.80.
#banking #banks #economy #invest #investing #finance #trading #economics #markets
Gold: Investors not convinced it's end of the banking turmoilGold prices took a hit on Monday’s open after investors and traders started to move away from the safe-haven asset and into more riskier assets. This comes after the news about First Citizens BancShares Inc would take on the deposits and loans of failed Silicon Valley Bank which gives an overall sentiment of confidence to the markets that this “bad chapter” in the banking environment is coming to an end. However, gold remains the " safe-haven" asset at a higher than usual risk period for the banking sector, as risks of contagion are far more persistent than the market would like to believe.
‘Even though the “reassuring” events that are taking place in recent days regarding the banking sector boost investor confidence and seems to be increasing their risk appetite, the issue is not fully resolved yet and the risk of more bank failures is not eliminated in any case.’ said Antreas Themistokleous, an analyst at Exness ‘ Gold and Bitcoin will always be the “go-to” place for investors to limit their risk of excessive capital loss in periods of uncertainty and although volume is decreased the price of the yellow metal is still hovering around the $2000 mark’
From the technical standpoint the price seems to be making a correction in recent sessions however the majority of the technical indicators are not bearish just yet. The 50 day moving average is still trading above the 100 day moving average indicating the bullish momentum might still be in play while the 23.6% of the daily Fibonacci retracement level is currently acting as a support on the price. The Bollinger bands are showing signs of retraction indicating that the volatility might be running thinner. In the event of a continuation of the short term correction to the downside we might see some support building up around $1,930 which is the 38.2% of the Fibonacci retracement level and also an inside support area since late January 2023.
On the other hand if we witness a continuation of the overall bullish movement the area of $2,000 might be considered a strong resistance level which is the psychological resistance of the round number and also the last area of price reaction from the previous week.
SP-500 - Banking crisisYou might have wondered about the past ~400 days in the financial market, especially in the US and Europe. Numerous commentaries and opinions have been shared across business-related media regarding interest rates, inflation, oil prices, war, etc. Trust me; you are not alone! Even the most distinguished economic Nobel prize winners have yet to learn why the economic indicators are still stable with so many factors in place. You might have heard of the recent banking failure in the US and Switzerland and that the banking system is so strong that nothing similar to 2008 would happen. But you have yet to hear that this time is expected to be worse!!
Milad opinion:
In the next 40 days, till the first week of May, we will see multiple failures in the financial system and corporates with weak management, and we will see the tight unemployment rate finally cracking up. But this will be just the beginning of many failures to come.
To explain this more clearly, in the past 15 years, we have seen a secular bull market that has pomped the asset prices to a level never seen before, leading to an everything bubble. As a result, we have seen the tech sector and related assets grow to an unsustainable level, and housing prices soar. But this fast growth has come to an end, and in the next 40 days, we will see a downfall of significant indexes to at least 30% to begin with, resulting in a tough landing.
The bases are as follows:
The banking crisis of 1907 and 2008 indicate a massive downfall of 30% or more, starting shortly after banks' failures.
As the Fed Chairman touched on in today's Q&A, the credit market is falling, starting from Credit Swiss, and will be tightened further. This could threaten the housing market, which is already unstable.
The 1974, 2002, and 2008 crashes indicate that the final drop should occur here. The downfall for SP500 shows 30% to 41% drop in the next 40 days.
A historical unemployment rate study indicates a sudden jump in the following two readings.
The bond market inversion (10s-2s) and (10s-3months) indicate that the recession is very close.
Analyst Sentiment Measure of earnings among US companies indicates an extreme reading is coming, which means a significant drop in earning expectations.
Leading Economic Indicator (LEI) alarms for immediate recession.
ISM New orders Leading also indicates an immediate recession.
What's next?
You can see in recent weeks, the SEC has been questioning different comaniyas, cryptocurrency companies, and people.
The regulation of the cryptocurrency market has begun, next is the takeover or liquidation of private banks in favor of the central bank. Then CBDC - FEDnow Starts in June-July.
P.S if this prediction comes true, there will be a storm in cryptocurrency, and a drop below 16 is possible, I just keep it in mind.
And it will look something like this
Write your comments, send them to your friends, I really want to know your thoughts.
Thank you MIlad
Best regards EXCAVO
XAUUSD LongAttention traders!
We are feeling bullish on XAUUSD and wanted to share why.
With the current economic uncertainties and inflation concerns, we believe it's a wise choice to look at gold to hedge against bank runs, higher currency fluctuations, etc.
Our analysts have also identified strong technicals, as seen above, with XAUUSD currently in a strong uptrend and showing potential for further continuation. We are closely monitoring a key price level to enter a long position, and we plan to hold it for the mid to long-term.
As with any trading, there is always risk involved, but with proper risk management and a solid strategy, we believe the potential rewards outweigh the risks. Join us in investing in XAUUSD and let's make the most of this opportunity.
Let's discuss your opinions!
USD Hangs in the Balance: Bank Chaos vs. Inflation The US Federal Reserve is about to begin its two-day policy meeting and will announce its latest interest rate decision 48 hours later. During the meeting, officials will weigh the possibility of raising interest rates due to inflation, which is still considered high, or whether the current turmoil in financial markets should be given more weight. Unfortunately, the pre-meeting blackout period prohibits officials from commenting on the situation.
UBS shares, which had dropped over 14%, managed to recover by closing 1.2% higher after the bank provided a 3 billion Swiss franc ($3.2 billion) emergency rescue package for its troubled domestic rival, Credit Suisse. The large size of Credit Suisse's balance sheet, which stands at around 530 billion Swiss francs as of the end of 2022, is a concern for the global banking system, as it is twice the size of Lehman Brothers' when it collapsed in 2008.
The Federal Reserve, in response to the Credit Suisse crisis and the failures of a few US regional banks, has begun offering daily currency swaps to central banks in Canada, Britain, Japan, Switzerland, and the euro zone in order to ease funding stress in global markets.
With all this going on, traders are uncertain whether the Federal Reserve will raise its benchmark policy rate on Wednesday (US time). The dollar index fell below 103.5 on Monday for the third session in a row as investors anticipate that the Federal Reserve might not increase rates as much as previously expected due to the banking crises.
Fed funds futures reflect a 70% probability of a quarter-percentage point rate hike, with a 30% chance of no change. A significant drop in near-term inflation expectations is also contributing to the expectation of the Fed pausing its rate hikes, as expectation for the near-term inflation reached nearly a two-year low last month.
In other news, oil prices declined to their lowest point in 15 months on Monday due to concerns that the risks in the global banking sector may lead to a recession. Gold prices, which had surged 6.4% in the previous week, fell to $1,980 an ounce on Monday but remained close to the one-year high of $2,009 hit earlier in the session.
CaixaBank (CABK.mc) bearish scenario:The technical figure Channel Up can be found in the daily chart in the Spanish company CaixaBank, S.A. (CABK.mc). CaixaBank, S.A. is a Spanish multinational financial services company. It is Spain's third-largest lender by market value, after Banco Santander and BBVA. CaixaBank has 5,397 branches to serve its 15.8 million customers and has the most extensive branch network in the Spanish market. It is listed in the Bolsa de Madrid and is part of the IBEX 35.
The company consists of the universal banking and insurance activities of the La Caixa group, along with the group's stakes in the oil and gas firm Repsol, the telecommunications company Telefónica and its holdings in several other financial institutions.
Channel Up broke through the support line on 18/03/2023. If the price holds below this level, you can have a possible bearish price movement with a forecast for the next 47 days towards 3.2770 EUR. According to experts, your stop-loss order should be placed at 4.1970 EUR if you decide to enter this position.
Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
ROAD TO 30K LETS GOThis week, Bitcoin has led the recovery in cryptocurrency markets.
The Fed's indirect monetary policy expansion has increased demand for riskier assets, which has benefited Bitcoin.
The following resistance levels for BTC above the current price levels are $26,750, $27,500, and $28,730.
This week, Bitcoin has been on a steep upswing, leading the cryptocurrency market rebound as the potential of the US banking crisis becoming a worldwide concern is priced in.
As the Federal Reserve decided to tighten monetary policy in November 2021, cryptocurrency markets began a long-term decline from their heights. The events of this week have contributed to a rally.
For the first time since 2008, the US Federal Reserve purchased the failed Silicon Valley Bank and Signature Bank bonds before opening a discount window for struggling banks.
As a result of the bond purchases, the Fed's balance sheet increased by nearly $300 billion, according to figures released yesterday. The demand for hazardous assets surged due to this indirect monetary expansion.
On the other side, following the bank collapses, demand for cryptos, particularly Bitcoin, increased. Withdrawals to external wallets have also increased dramatically.
Gold gets a safe-haven bid as banks shake confidenceFinancial markets were sent into a tailspin on the news of Silicon Valley Bank (SVB) imploding. Despite the decisive moves by the Federal Deposit Insurance Corporation (FDIC)1 and the Federal Reserve (Fed)2, market confidence has been shaken and we have witnessed a flight to safety. Demand for government bonds have risen sharply, driving the yields on 10-year US Treasuries down from 4.0% on 9/3/2023 to 3.4% (16/03/2023). In tandem, gold prices have risen 6.6% in the past week (9/3/2023 to 16/03/2023). The speed of gold’s moves indicates that the flight to safety has not been obstructed by any broad-based liquidity issues. Very often in the initial phases of financial market stress, investors sell gold to raise cash to meet margins calls on futures positions in other assets or for other liquidity needs. The current crisis appears different in that there are no visible signs of panic gold selling and that could be indicative that the stress in certain parts of the banking sector are idiosyncratic. Nevertheless, investors have been reminded that unexpected events occur with greater frequency than they hoped and have sought to rebuild defensive positions that will help to hedge against further turbulence.
Credit Suisse concerns add to investors desire for defensive hedges
The Credit Suisse debacle unfolding quickly on the heels of SVB highlights that when confidence is shaken in one part of the banking sector it can easily spread. All banks, deposit takers, brokers and lending institutions with weak metrics are under the microscope. A liquidity life-line offered by the Swiss National Bank on 16/03/2023 has allayed markets fears for now, but we believe that investors are likely to continue to seek defensive assets in this time of uncertainty.
Either tightening or losing monetary policy could be interpreted as a policy mistake. Gold is there as a hedge.
The European Central Bank (ECB) raised interest rates by 50 basis points on 16/03/2023, marking a bold move given the fragile state of market confidence. However, blended with dovish commentary, markets are expecting less rate rises in the future and believe the 50 bps hike was delivered only because the ECB felt like it had pre-committed and any smaller hike would signal conditions are worse than what the market has priced in. The Euro appreciated against the dollar and the Dollar basket depreciated, providing further support for gold in Dollar terms.
While the jury is out on whether the Federal Reserve will pivot its monetary policy early (note the Federal Open Committee meeting is on 21st and 22nd March), investors are seeking to protect themselves with hard assets. If the Fed doesn’t soften its hawkish stance, it risks transforming a bank liquidity issue into a recession as risk appetite and confidence has been shaken. If the Fed does act either by terminating quantitative tightening or prematurely ending the hike cycle, the central bank’s monetary largess will linger for longer. Either way, gold is likely to benefit. Gold tends to do well in recessions and is seen as the antithesis to central bank created fiat currencies.
Gold gains are well supported
We therefore expect gold to hold onto the past week’s gains in the is time of turbulence. The key short-term risk for gold at this stage is not market confidence recovering quickly, but a broader market meltdown that could drive gold selling to raise liquidity for meeting other obligations (such as margin calls). In that scenario, gold is likely to recover in time as other investors will buy the metal to shore up their defensive hedges.
Sources
1 The FDIC provided more than its usual $250,000 insurance on deposits.
2 The Fed created a new liquidity tool - Bank Term Funding Program (BTFP) - offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral.
Rate hikes in jeopardy?Over the past few days, we have seen the second and third largest bank failures in US history. A question remains whether we have seen the last of these failures and what other ripple effects could occur.
In the currency markets, the dollar index dropped below 104, reaching a three-week low for the third consecutive session. Signature and Silicon Valley Bank's failure has sparked speculation that the US Federal Reserve might adopt a less aggressive policy tightening approach at its next meeting, with Goldman Sachs even suggesting a pause. Money markets now indicate a more than 70% probability of a 25-basis-points hike next week, a sharp reversal from the previous week. However, a better-than-anticipated US jobs report published on Friday supports the argument for further rate increases. Investors are anticipating important US inflation data on Tuesday, which will provide insight into the central bank's rate-hike trajectory.
Some of the best performers in the face of the US dollar decline has been risk-sensitive currencies such as the Australian (+1.40%) and New Zealand dollars (+1.45%). The British pound is also on the leader board, appreciating +1.3%. Perhaps suggesting a vote of no-confidence in traditional banking, Bitcoin has experienced an 18% surge over the last 24 hours, surpassing $24,200, its most significant daily gain in almost a month. Elsewhere, Gold is up +2.4% to $1,911, its highest level in over a month.
CIMB near ATH. 18/Feb/23.CIMB came closed to its all time high price @ 6.180....Rate hiking “temporarily” halted?..Or?...
Bank of America (BAC) bullish scenario:The technical figure Triangle can be found in the daily chart in the US company The Bank of America Corporation (BAC). The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company. Bank of America is one of the Big Four banking institutions of the United States. It serves approximately 10.73% of all American bank deposits, in direct competition with JPMorgan Chase, Citigroup, and Wells Fargo. Its primary financial services revolve around commercial banking, wealth management, and investment banking. The Triangle broke through the resistance line on 26/01/2023. If the price holds above this level, you can have a possible bullish price movement with a forecast for the next 12 days towards 36.20 USD. Your stop-loss order, according to experts, should be placed at 36.30 USD if you decide to enter this position.
The bank's net interest income jumped 29% year over year to $14.7 billion in the fourth quarter. Looking ahead, the company estimates that a 1-percentage-point increase in rates would boost its net interest income by an additional $3.8 billion over the next year.
Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals and cannot be held liable nor guarantee any profits or losses.
