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Week in a Glance: Bank of England, OPECPlus, NFP and Reddit FailThe main event for financial markets last week was the end of the epic confrontation between David (small investors from Reddit) and Goliath (professionals from Wall Street). It’s from the hype viewpoint. David, despite the whole army of sympathizers, lost—yes, this is the real world, not the Bible. It’s evident when using GameStop stock dynamics as a valuation metric. At the very end of January, they reached $400, but already last week they dropped up to $60. So, they lost 85% in a week. This is everything you need to know about the outcome of Reddit’s war with Wall Street. And we warned about this. The outcome was extremely obvious. Another important event of the last week was the US labor market statistics publication. The NFP indicator’s traditionally attracted the most attention coming out exactly in line with the forecasts. The markets hoped for the best but the data in positive territory cannot be called a failure. It’s especially significant if we remember that the December data were in a rather deep minus. Anyway, the dollar got its sales share. As long as the Dollar Index is above 91 and the inverted head and shoulders pattern is in play, such declines are a great reason to buy. Firstly, it’s for purchases against the British pound, which has greatly revived after the Bank of England meeting results were announced. But there was nothing especially to be happy about. The monetary policy parameters unchanged, but the GDP rate growth in 2021 was significantly cut: from 7.25% to 5%. The only reason for the conditional joy was the announcement that they weren’t ready to switch to negative rates. Another important event of the past week was the OPEC Plus Joint Ministerial Monitoring Committee meeting. They didn’t increase production on it, noting the high compliance level (which didn’t correspond to independent data showing it’s at 85%). At the same time, OPEC again cut its forecasts for the 2021 demand growth rate, lowering them from 5.9M to 5.6M barrels. But all this didn’t prevent the oil growth. Markets have relaxed too much after the victory over retail investors, as well as against the background of an improvement in the epidemiological situation. It naturally sets up a positive mood in oil demand growth recovery. In addition to the UK GDP data, the coming week will be rather calm. So, the markets will focus on US stimulus issues as well as pandemic news.
Short
by Trade24Fx
1
The Bank of England Paused and the Markets Preparing for NFPThe main event of yesterday was the Bank of England meeting but it didn’t bring any special surprises. The rate was left unchanged, and the monetary policy parameters, too. But the pound finally strengthened rather sharply. It’s because the Central Bank head said that the Bank of England negative rates in the near future is not an option. Also, there were relatively good data on retail sales in the Eurozone (they came out with better results than forecasted). In our opinion, strengthening of the pound is unjustified, today we recommend buying the EURGBP pair, that is, buying the euro against the British pound. However, the pound can be sold against the US dollar, as well. Yesterday’s data on initial and continuing jobless claims benefits were better than it was predicted. Coupled with ADP employment data, it gives some hope for today’s NFP figures. After the disastrous data for December, the January figures are expected to be at least in the positive zone. The dollar may well react positively to this. Accordingly, the GBPUSD pair will be under pressure—possibly it’ll be a double pressure. The UK economy isn’t in the best shape, as the pandemic is only now beginning to fade, but the lockdown is still on with all the consequences for the economy.
Long
by Trade24Fx
Decent ADP, Draghi, Heavy Artillery and Bank of EnglandThe markets breathed out in relief yesterday. The fear associated with uncontrolled attacks on retail investors is gradually disappearing. This is due to news that “the attacks organizer lost $17 million in the last two days.” Also, it’s because of the price dynamics for shares-targets attacked, as well as information that heavy artillery is involved in the case. It clearly shows the bubble is deflating. Jannette Yellen, the US Treasury Secretary, meets SEC and Fed heads today to discuss the current situation. Excellent reports from Amazon and Alphabet also contributed to the relief. Only Jeff Bezus’ upcoming departure from the post spoiled the news. Another reason for optimism was the news that Mario Draghi, the ECB former chief, is likely to become Prime Minister of Italy. Considering Draghi’s reputation and his actions as head of the ECB, this news definitely means the political crisis in Italy is over, and it ensures a good hope for the best. The most interesting thing is that this isn’t the last good news as of Wednesday. The US employment stats from the ADP came out better than forecasted (174K instead of 49K forecast). In general, it set up a positive mood. Markets feared that the weak December statistics would continue in January. Today the announcement of the Bank of England meeting results is interesting. The specter of negative rates is hovering over the UK. So, the Bank of England is expected to provide some clarity on this issue. In general, markets don’t expect any changes in the monetary policy parameters today. In addition, the numbers on retail sales in the Eurozone are to be considered, as well as the US unemployment data on a daily basis.
Short
by Trade24Fx
Markets Calm, Eurozone GDP, Stimulus & ADP DataYesterday the financial markets’ new legendary superpower died. GameStop shares plunged by 50%, and AMC shares value decreased by 40%, etc. Even silver lost about 10% yesterday. Its growth was also associated with the retail investors’ attack in the beginning of the week (but it’s not certain). Actually, everything’s expected. The miracle didn’t happen—neither did the revolution. But it’s probably too early to disperse. There are still many low liquidity half-dead companies’ shares, so new volatility spikes are more than likely. Consequently, financial markets relaxed again. The Fear Index fell sharply, stock markets grew in price, as well as oil did. In general, it’s the usual set, typical for the growth of risky sentiments. The only exception was the Dollar Index having finally formed a signal within the “inverted head & shoulders” pattern. It’s expected to grow in the foreseeable future. If the dollar underwent strengthening in the foreign exchange market, the euro felt pretty uncomfortable. The Eurozone economy ended the fourth quarter with negative GDP growth. It practically guarantees a double dip recession, since the first quarter of 2021 is also likely to be another disaster. Another reason for optimism was the stimulus package related news from the US. The Democrats seem to be working in two directions. On the one hand, they are trying to come to an agreement with the Republicans. On the other hand, they are doing everything so that the package’s fate can be defined by a simple majority both in the Senate and in Congress. It’d be extremely interesting to follow the current data on US employment by ADP. Past NPF data were a disappointment. Today’s data may shed some light on what’s expected to happen on Friday.
TVC:DXYLong
by Trade24Fx
Silver Being Attacked and Data Failure from GermanyThe retail investors’ attacks have completely captured the financial market participants’ minds. A blow is expected and feared decisively from everywhere. Like it was yesterday, when another one followed. It’s all about silver prices’ sharp increase reaching 13% during that day. It was the most significant one-day gain since March 2009. Sure thing, 13% is a far off from 50% or 100% that Gamestop shares have demonstrated. Neither silver is comparable in scale to the half-dead company’s shares. By the way, yesterday the Gamestop shares started to fade, losing approximately 30%. These shortcomings are likely to befall silver in the nearest days—but on a much smaller scale. But possibly there’s been no attack at all. There was some social media and on forums hype threatening to launch an attack. This hype acted as a kind of self-fulfilling prophecy. In other words, the silver market participants have observed sufficient power of Reddit traders and decided to buy without waiting for the silver price to grow. As a result, the buying interest sharply sprang, as well as the prices did. If it’s true, silver sales cannot be avoided as soon as everyone realizes the deceit. So, selling the asset looks like a pretty promising idea. In the US, a number of Republicans have come up with an initiative to reduce the size of the Biden plan. Apparently, the negotiating process has started. Let’s see the way it ends.The retail sales data from Germany released yesterday was a disappointment. But it was pretty expected, given that the data is as of December (the lockdown peak). Last week, the German economy narrowly escaped the first step towards recession, but the German economy contracted by 5% for 2020. The euro was under pressure in the foreign exchange market. It was mainly due to the dollar strengthening, rather than due to sales across the entire spectrum.
TVC:DXYLong
by Trade24Fx
5
Week in a Glance: Wall Street nightmares, the Fed and US GDP The main event of the past week was, of course, organized attacks by retail investors on the shares of a number of companies. We wrote about this in our previous reviews, in fact, absolutely everyone has already written about it, so we will not once again describe the essence of what is happening. Let's talk better about the consequences. Based on the current situation, we can talk about a local revolution in financial markets that can significantly reshape them. At a minimum, everyone on Wall Street will now monitor the largest forums and chat rooms to earn an extra penny or defend against future attacks. But on the whole, it is clear that the status quo will be violated. Moreover, both by market methods (for example, a sharp rise in prices for option contracts and a decrease in the potential of gamma squeezes) and non-market (regulators have not yet said their word, but it is obvious what they will say). In the meantime, retailers are seizing the moment and continue to attack new companies, wreaking havoc and anarchy on Wall Street. Among other events of the week, it is worth noting the meeting of the FOMC, which finished without surprises: the rate was left unchanged, as well as other parameters of the monetary policy. At the same time, Powell confirmed that this state of things will remain unchanged for the foreseeable future. The data on US GDP, published on Thursday, came out slightly worse than analysts' forecasts (4%), but on the whole they cannot be called a failure (after all, the country was in a lockdown for half a quarter). Although it is worth noting that the annual GDP fell by 3.5%, which was the worst year for the United States at least since the end of World War II. The coming week will definitely not be a week of respite after a busy previous one: statistics on the US labor market (including data on NFP), the Bank of England meeting, Eurozone GDP, as well as the further development of the confrontation between Reddit and Wall Street will not let anyone sleep well.
DJ:DJIShort
by Trade24Fx
Hamsters are still attacking, markets are in turmoil The main event of this week is the organized attacks of retail investors. Millions of financial lemmings attack poorly defended positions on a number of assets and got some impressive victories. The Wall Street giants, on the one hand, are at a loss, and some are even losing billions, and on the other hand, on a number of assets, daily intraday movements are (+/- 50%!), which makes it possible to earn hundreds of times more than before. We wrote about this uprising in more detail in yesterday's review, and in today's review, we note that events continue to develop, which makes financial markets very nervous. What if hamsters rush to storm not forgotten by God Blackberry or Nokia, but some of the companies on the go? This can lead to complete chaos. And that's scary, especially when you consider how overbought the market is. The markets were somewhat reassured by yesterday's US GDP data. Growth for the fourth quarter amounted to 4%, which, although slightly worse than forecasted, is overall quite a lot, especially when you consider that half of the quarter US economy was in lockdown. British Prime Minister Boris Johnson warned that the lockdown could last until at least 8 March. Against the background of this statement, as well as all the difficulties that British exporters and importers are now facing because of Brexit, it is extremely strange to see the pound at 1.37. So today we will actively sell it. The deal looks almost perfect: profit targets are measured in hundreds of points, but the risks are limited to tens of them. In general, under the current conditions, the best strategy, in our opinion, will be to avoid risky assets and return to buying the good old dollar, which, by the way, looks rather oversold.
TVC:DXYLong
by Trade24Fx
Reddit vs Wall Street, FOMC and key earnings Yesterday was quite eventful, if not for news, then for price fluctuations in financial markets. The day began with the usual growth in demand for risky assets, but with the start of the American session, fear appeared on the market, which provoked a decline in the stock market, as well as some strengthening of the dollar. At the same time, in general, there were no particular reasons for such a rapid change in sentiments, which is quite symptomatic. As for the possible reasons for worries, we can only mention the meeting of the FOMC. But this reason is very weak, because the US Central Bank did not change the parameters of monetary policy, which was expected. This means it should not have provoked an emotional outburst. The largest technology companies in the United States reported yesterday: Apple, Facebook, Tesla, as well as a number of other major players in the US stock market. Everyone expected a repeat of Microsoft's success. In fact, it turned out that way. After all, 2020 was a very successful year for the tech sector. Which, however, in no way justifies its current prices. So our position remains unchanged in 2021, we expect at least a powerful correction, and as a maximum - a full collapse of the bubble. Speaking of bubbles. A very interesting battle has unfolded between Wall Street whales and small investors and traders. The latter decided to punish the hedge fund Melvin Capital, which sold all sorts of doomed companies like GameStop, BlackBerry and others. So, millions of retail traders rushed to buy the shares of these companies, as well as a number of others that the hedge fund Melvin Capital was selling. As a result, stocks skyrocketed hundreds of percent, and the hedge fund lost billions of dollars. But it was supported by Ken Griffin (founder and owner of Citadel) and Steve Cohen (founder and owner of SAC Capital), who invested $ 2.8 billion in Melvin. So far, the epic confrontation continues. Considering that the current stock quotes, which are dispersed by Reddit users, have reached absolutely insane values, we would bet on investment whales, that is, the sale of GameStop shares can literally make anyone who dares to sell them rich. The fall of these stocks is actually inevitable. The only question is whether it will take place today or tomorrow.
NYSE:GMEShort
by Trade24Fx
IMF forecasts, Fed and stock market monsters In terms of news, yesterday can hardly be called oversaturated. The UK labor market was not as bad as it could be. The IMF has updated its forecasts for the world economy in the foreseeable future. On average, 5.5% growth is expected in 2021, which is 0.3% higher than the previous estimates announced in October. Perhaps this information explains the surge of optimism in the financial markets that was observed yesterday. Markets may receive another dose of positive today this time from the Fed. Almost for sure the positive will not consist in further easing of monetary policy, which would be ideal for buyers in the US stock market. Rather, we are talking about a certain status quo in its current form. Markets are waiting for confirmation that the current ultra-low rates and quantitative easing program are for a long time. And if suddenly this does not seem enough to the markets, then today the real monsters of the US stock market will publish their financial results. We are talking about Apple, Facebook and Tesla. Microsoft already made it clear yesterday that the tech sector felt like a fish in water in 2020. It is likely that today, after the market closes, similar conclusions can be drawn after the report of other titans. In general, the bubble has every chance of continuing to inflate. And on this occasion, we recall one of the fairly well-known statements: “The market doesn’t end with some terrible burst of bad news. It ends when things are pretty darn good, but not quite as good as yesterday”.
DJ:DJIShort
by Trade24Fx
Stimulus Issues, the Economic Forum, and the case of Israel Yesterday has started with the markets full of confidence that stimulus are adopted. But the day has ended with a less positive tone. A number of Republicans have said that Biden's proposal is too generous and that one should be more modest: there is a black hole in the US budget, as well as the rapidly growing national debt. However, it is too early to make any conclusions and the market sentiments will obviously change more than once. The pandemic continues to be a permanent threat, which does not allow investors to relax completely, even if they would like to. The total number of cases in the world has exceeded 100 million and the voices that all these coronaviruses are nonsense and fictions are not heard at all. This is understandable. Even if Israel, having vaccinated 40% (!) of the population, is forced to declare a third lockdown, since the pandemic is once again spinning out of control. What can be said about other countries. It will be quite interesting today to get acquainted with the updated forecasts from the IMF about the future of the world economy. By the way, about the world economy. Yesterday there was a virtual world economic forum - a kind of Davos on-line. However, it did not bring any sensational discoveries, so by and large it has changed nothing.
DJ:DJIShort
by Trade24Fx
Week in a Glance: Biden and stimulus, Central banks and lockdown The past week turned out to be quite eventful with various fundamental events. The main thing, of course, was the inauguration of Biden and the expectations of the markets for the implementation of his plan to help the US economy in the amount of $1.9 trillion. On Tuesday, before the inauguration, the future head of the US Treasury, Jannette Yellen, spoke in Congress and called to “act big”. Actually, this speech was like a trigger for a change in sentiments in the financial markets, which again switched to the greed mode. As a result, the US stock market renewed its historical highs. Although the behavior of the cryptocurrency market shows that it is likely that the hour of reckoning is just around the corner. This refers to the departure of Bitcoin, albeit temporary, below 30K, that is, it has lost a quarter of its value. Cryptocurrencies are an extreme form of human greed and an early indicator of sentiments shifts. So, it looks like something is starting to change. The next in line is the US stock market. Actually, something is changing in the air of the stock markets despite all those highs. The earnings season is going pretty strange. Companies publish generally good, and in some places excellent, financials. But their shares after that tend to fall (with few exceptions like Netflix). Looks like, fewer and fewer people want to buy at prohibitively high prices. Especially when you consider that the global economy is steadily declining in the first quarter due to lockdowns. Germany and a number of other European countries have decided to extend the lockdown until mid-February. The past week can be called the week of the Central Banks. The Bank of Japan, the ECB, and the Bank of Turkey left the parameters of their monetary policy unchanged (as the markets expected). As a result we did not see any powerful movements in this regard.
DJ:DJIShort
by Trade24Fx
Stable Central Banks, Turkish Lira and US Data Yesterday can be called the day of the Central Banks: Bank of Japan, ECB and even the Bank of Turkey. Since all the above-listed central banks left their monetary policy parameters unchanged (as the markets expected), we did not see any serious price movements yesterday. In general, oddly enough, the main intrigue was around the Bank of Turkey. The fact is that Erdogan is very dissatisfied with the current high rates of the Central Bank (17%) and has repeatedly stated the need to reduce them. But the Bank of Turkey demonstrated de facto independence and left 17% in the game. This means that the Turkish lira continues to remain extremely attractive from the position of carry trade. So sell USDTRY looks like a potentially very attractive trade. A bunch of data were published yesterday related to the US labor and housing markets. Initial jobless claims were slightly better than forecasts and the previous value. But in general, 900K is a lot. More than three times higher than pre-pandemic levels: a quick economic recovery and V-shape as they are. Meanwhile, Biden's optimism in the financial markets has subsided somewhat. The fuse lasted just a couple of days. The oil market is also consolidating on the top. The data on oil stocks from the API showed unexpected growth, which puzzled buyers. However, who cares now about the real situation in the oil market, when $1.9 trillion are looming on the horizon.
Short
by Trade24Fx
Biden, Central Banks and earnings seasonThe earnings season in the US continues to gain momentum. And with rare exceptions such as Netflix (stocks literally skyrocketed by 15% yesterday), we see a similar picture: good financials come out, but the stock not only does not grow, but even declines. One of the explanations for this is the fact that stocks are very overvalued and it is physically much easier for them to fall than to rise. It is quite possible that this is one of the signs of the upcoming correction in the US stock market. But for the correction, it is necessary at least to switch the attention of the markets from the stimulus package in the United States to the state of the economy or a pandemic, or at least to be puzzled by the fact that stimulus are only being planned and there is no fact in general. The fact is that for some elements of Biden's plan, votes are needed not from 50 senators, but from 60. That is, Biden needs to convince at least 10 Republican senators. It is unlikely that it will be easy and fast, if at all that would be. But until Biden stops talking about stimulus in each of his public appearances, shifting attention will be difficult. So yesterday, entering the office as President, Biden mentioned the need to support the US economy and its citizens. And although Biden is now taking all the attention of the financial markets, this does not mean that nothing else is happening. The current week is extremely busy with meetings of the Central Banks. Yesterday, for example, the Bank of Canada announced its decision on the parameters of monetary policy. The rate was not changed as expected, but it was noted that due to the pandemic, Canada's GDP in the first quarter will decrease by 2.9%. After that, the Canadian dollar has strengthened significantly, which, in our opinion, is a good opportunity for its sales. Today the ECB will announce its decision on the parameters of monetary policy. And the Bank of Japan has already decided to leave rates unchanged.
Long
by Trade24Fx
Yellen's message, IEA outlook, and of course Biden Yesterday was filled with optimism and joyful expectations. Expectations of money, a lot of money. In this light, the speech of the future head of the US Treasury, Jannet Yellen, in Congress caused increased interest. In fact, the former head of the Fed was supposed to present Biden's plan for a new stimulus package, which the he announced last week. What she actually did, saying that it was time to spend big and don't think about debt. Let's save the economy and the citizens of the United States today, and we will deal with the consequences tomorrow, that was her message. By the way, today Biden's inauguration and America will move in the new era. The stock market as a whole was growing confidently, but rather strange things were happening in single stocks as usual for the current earnings season. Goldman Sachs published excellent financial results, but the shares were under pressure, losing about 1.5% during the trading session. Bank of America was rather unconvincing on almost all fronts of reporting, from profit to revenues, but at the same time, stocks demonstrated growth throughout almost the entire American session. Oil also grew yesterday. But that was a part of the overall movement, not the asset's own strength. The fact is that the IEA published its monthly outlook with forecasts for the oil market for 2021 and their vision is rather pessimistic: the value of demand has decreased by 0.3 million bpd. In general, the rise in oil continues to be part of the general movement of greed and as soon as the markets remember about fear, oil will invariably fall out.
TVC:USOILShort
by Trade24Fx
2
China GDP Britain problems and Biden's expectations Yesterday was a holiday in the United States, so it was calm in the financial markets, and nothing extraordinary happened in the fundamental background. The main news of the day can be considered the publication of China's GDP for 2020. An increase of 2.3% against the background of the GDP drop in the overwhelming majority of other countries is a clear positive. But, on the other hand, for China, this is the worst result in the last 45 years, which somehow does not look very happy. The data on industrial production and retail sales also caused a strange feeling: the growth of the first indicator by 7.3% is a clear positive, but the 4.6% of the second after previous 5% was rather disappointing. But in general, China still inspired hope for a bright future. What cannot be said about the pandemic, which has not yet been brought under control in the world. As a result Germany decided to extend the lockdown until mid-February, which reminded the markets that the solution to the problems of the world economy will not be quick and immediate. The UK, meanwhile, continues to "enjoy" life outside the EU. Judging by a number of groans from business in the country, not everyone is happy with what has happened: new taxes, additional certification, rising costs for the delivery of products to Europe, a ton of additional paperwork - these are not all the consequences that have befallen companies. According to the Bank of England, only 6% of companies were ready for this, the rest plunged into chaos. Brexit could cost British exporters £ 25bn ($ 34bn) this year as a result of weak demand and increased bureaucracy, according to a report by insurance company Euler Hermes Group SAS, leading to a 1.1% contraction in gross domestic product. In this light, our recommendation to sell the pound continues to be more than relevant. The only thing we would like to note is that in the current conditions it is safer to do this against the euro, that is, to buy the EURGBP pair. Janet Yellen, Biden's nominee to run the Treasury Department, will tell the Senate Finance Committee on Tuesday that the government must "act big" with the coronavirus relief plan. And on Wednesday, Biden will become the new President of the United States. That can provoke another wave of hopes for the best from the financial markets.
Long
by Trade24Fx
Weekly in a Glance: US stimulus, impeachment, earnings seasonThe main events of the past week include the second impeachment of Trump, as well as the stimulus package from Biden. Trump wanted to make a history; Trump made history. Not as the man who made America great again. But as the first, against whom the impeachment procedure was initiated twice. House of Representatives voted in favor of this on Wednesday. Now it's up to the Senate. On Thursday, Biden announced his vision for a new stimulus package for the US economy. The planned size is $ 1.9 trillion. On the same day, the head of the Fed, Jerome Powell, confirmed that in the foreseeable future there will be no tightening of monetary policy in the United States and, in general, the year will be a year of rapid economic recovery. From macroeconomic statistics, it is worth noting a 5% decline in German GDP in 2020, as well as an unexpected and rather strong decline in retail sales in the United States (by 0.7%). US earnings season kicked off last week. Banks traditionally open it. CitiGroup, JP Morgan, Wells Fargo, as well as Delta Airlines and BlackRock have already reported. And it should be noted that some pretty interesting things were happening. On Thursday, Delta Airlines once again recalled that 2020 was a year of complete failure for the airline industry (the company lost 65% of revenues, continues to generate hundreds of millions of losses, and financially everything is bad). BlackRock, on the contrary, felt like a fish in water and by the end of 2020 added more than 1.2 trillion (!) of AUM to their total assets under management, that is, the company is the largest investment company in the world. And now the question is: which of the companies has grown in price and which has decreased? BlackRock lost about 4.5% (!), while Delta Airlines gained a few percent. Tellingly, this behavior of the markets continued on Friday, as a result of which CitiGroup and Wells Fargo lost about 7% (!) each. In general, Friday recalled that all attempts to analyze individual assets at any time can be multiplied by 0 with the general movement. A sharp jump in the level of fear on Friday provoked a general rally, classic for such an event, in which investors moved from risky assets. Accordingly, the stock markets and the cryptocurrency market declined, commodity markets fall, but the dollar, on the contrary, felt quite comfortable and demonstrate significant growth.
TVC:USOILShort
by Trade24Fx
Biden's plan, -5% from Germany, jobless claims, OPEC reportYesterday Biden announced his vision for a new stimulus package for the US economy. The sum is $ 1.9 trillion. Financial markets took this news rather coolly and as atypically as possible: stock markets did not grow, commodity markets did not show optimism, and cryptocurrency markets began to unfold after some growth. This suggests that the markets are running out of steam. On the one hand, everything is logical when you look at the number of daily cases and deaths in the United States, as well as the resulting restrictive measures. Yesterday's data on jobless claims reminded the markets about the causal relationship between the pandemic and the economy. The figure of 965K with average expectations of 795K is if not shocking, then sobering for sure. In addition, the US Congressional Budget Office reported that the budget deficit for the first three months of the new fiscal year increased by 60% compared to the same period last year and amounted to about $ 573 billion. And this amount did not take into account the last stimulus package of $ 900 billion. Given that at the end of 2021, the Budget Office expects a budget deficit of 1.8 trillion. It is not very clear (purely arithmetically) where Biden is going to take money from to implement his stimulus plan. Germany has reported on the growth rate of GDP in 2020. No growth of course, but drop in fact. GDP fell by 5%. Markets we did not receive anything fundamentally new, simply because the median forecasts of experts were a decline of 5.1%. You can even find a positive for Germany in these data, since there are chances that German economy did not go negative in the 4th quarter. OPEC has published its monthly oil market outlook. Nothing sensational was detected. But since the markets have recently become accustomed to a permanent negative in the form of downward revisions of forecasts of demand growth rates, the lack of new information was perceived as positive. However, 95.9 million b / d of demand in 2021 is still more than a dubious reason for optimism simply because in the pre-pandemic reality it would have amounted to 100+ million b / d. That is why our position on oil remains unchanged - we sell.
TVC:USOILShort
by Trade24Fx
5
Trump’s Record, Tesla’s problem and US Oil Stocks On Wednesday, the US House of Representatives voted to impeach President Donald Trump, making him the first president in US history to be impeached twice. In any other situation, we could talk about the reaction from the financial markets to this event. But not in a pandemic world where markets have their own laws of behavior. So the US stock market did not think to decline, as well as the dollar. Yesterday oil did not even think to grow, although it had a reason for this: US oil inventories drop (formally indicates a deficit in the market), which is a bullish signal. Let us express on this occasion the theory that we voiced earlier: when oil was at $ 10- $ 20, US, China, India and other countries actively purchased cheap oil, filling up reserves. And now, when there is a choice to buy oil on the market at $53 or take at $15 from the stocks, they choose the second option. That is, there is no deficit as such, but there is a purely economic calculation and an attempt to save up to $100 million a week. And where does a serious shortage in the oil market come from now, if there are lockdowns all around? This means that the demand has dropped sharply and is not growing. At the same time, the OPEC + compliance level literally collapsed from 100% + to 75% in December. That is, we are talking about the fact that an additional supply appeared on the oil market under 2 million bbl / d. In total, our mid-term vision for oil has not changed: we are still selling the asset. Tesla buyers received "great" news yesterday: The National Highway Traffic Safety Administration (NHTSA) on Wednesday asked Tesla (NASDAQ:TSLA) Inc to recall 158,000 Model S and Model X vehicles over media control unit (MCU) failures that could pose safety risks by leading to touchscreen displays not working. This is a rather atypical situation, since usually companies themselves initiate a recall of cars if they find faults in them. Tesla pretends that they do not see any problem. They can be understood, well, the most secure and highest-quality car in the world will have technological problems that provoke a threat to security. Recall that Tesla is a huge bubble that must burst sooner or later. And news like this is essentially a needle that leaves holes in the bubble shell.
TVC:USOILShort
by Trade24Fx
2
Europe and a Double-Dip Recession, Trump and impeachment The situation with the pandemic in Europe continues to be as dire as possible. The logical consequence of this was the statement by Merkel that the German authorities are considering extending the lockdown for another 10 weeks. For the largest EU economy, and the EU as a whole, this means a guaranteed decline in GDP in the first quarter. Bloomberg Economics, in particular, believes that the eurozone economy will contract by about 4% in the first three months of 2021 (previously predicted to grow by 1.3%). And if a decline is also recorded at the end of the fourth quarter of 2020 (JPMorgan believes that in the fourth quarter of 2020, the European economy contracted by 9%.), Then Europe will officially go into a state of recession (for the second time in a year). Europe is not the only problem region. Japanese Prime Minister Suga said that the state of emergency announced in Tokyo could spread to other prefectures. As for the vaccination as a panacea for a pandemic, although the United States at the start of the week had a record for the number of vaccinations per day (1.25 million), this is far from the pace that will allow the States to achieve herd immunity in the foreseeable future. According to the most conservative estimates, it is necessary to make about 500 million shots, which at a rate of 1.25 million per day gives extremely disappointing estimates of the timing of this vaccination (about 400 days). Meanwhile, Democrats continue systematically destroying Trump. It would seem that there is only a week left and they can forget about Trump as a bad dream. But no. Today the House of Representatives is going to initiate the impeachment procedure (the second during the Trump term).
FOREXCOM:NAS100Short
by Trade24Fx
Why the dollar is rising and cryptocurrencies are falling The start of the week was remembered by the dollar's growth. The explanations for this were different, ranging from the sharply increased yield of US Treasury bonds (the yield of 10-year bonds, for example, has doubled in the last 3-4 months), ending with an increase in nervousness in financial markets due to the pandemic, weak data on NFP, new coronavirus strains, second impeachment to Trump, etc. Despite the fact that yesterday's rise in the dollar was the third day of growth in a row, it is still too early to turn over into buying it. So far, we can only state the destruction of previous trends, but not the formation of new ones. By the way, about Trump. Although little more than a week remains before his inglorious end as President of the United States, the Democrats clearly felt the blood and want to shame him completely and irrevocably. 2 impeachments in one term is not a fact that Trump would like to enter the history with. However, given that there is almost no time left, the likelihood of this is extremely small. Trump's problems turned out to be contagious enough, as evidenced by the sale of Twitter shares after the social network banned Trump's account. It seems that they wanted the best, but in the end, they turned out to be digital dictators and tyrants. Even more indirectly, due to the social activity of Trump and his supporters, Google and Apple suffered, which removed the Parler social network application from their stores. Over the past few days, the cryptocurrency market has lost about 20% of its capitalization, or about $ 200 billion, and has officially moved to the territory controlled by bears. The main question now is whether Bitcoin will collapse by another 70-80% in the nearest future or will it wait. It is likely that the Ripple scandal knocked the ground out from under the feet of the bulls. Most of the leading cryptocurrency exchanges decided to suspend the XRP token trading. Among the latter, the second in the coinmarketcap.com rating cryptocurrency exchange Coinbase. Understanding that the recent top 3 cryptocurrency market XRP token in such a scenario could drop in price to 0, acted like a cold shower. And this is rational: if one lawsuit can multiply the capitalization of any token by 0, then buying these tokens at 40K can be a very expensive. At the right time, these sales were superimposed on the message of Bank of America to their clients, in which they clearly demonstrated that the cryptocurrency bubble is the largest in the entire modern history of the markets and deservedly receives the title of “mother of all bubbles”.
BITFINEX:XRPUSDShort
by Trade24Fx
5
Week in a Glance: blue wave, OPEC + and cryptocurrency fever The past week has finally confirmed the formation of the "blue wave". Biden is officially recognized as the President of the United States. The House of Representatives has long been under Democratic control. The Senate is now also dominated by the Democrats, thanks to the vice president's decisive vote. One of the last attempts by Trump to retain power ended in the ugliest way (the storm of Capitol Hill by Trump's supporters). Despite the unprecedentedness of the event, the US stock market ignored this event completely. Negative NFP numbers were also ignored. The reason is the expectations of new stimulus from the Democrats. Let us recall that it was the trillion injections from the Government and the FED that led to the fact that against the background of the most severe economic crisis in the country and the world, the US stock market grew by tens of percent. Markets are obviously looking forward to a repeat this in 2021. So the trends of 2020 have intensified at the start of 2021. As a result, Musk became the richest man in the world, ahead of Jeff Bezos. Well, the situation was brought to the point of absurdity. The owner of a company that produces as many cars in a month as a Volkswagen or Toyota produce in a day or two (!) has become richer than a person whose company is the world leader in e-commerce. However, this is not the only sign of the reigning madness. The blockchain fever has again created the illusion that the world of finance is moving into qualitatively new level, which means that people urgently need to buy everything related to cryptocurrencies, otherwise they can be late and miss the deal of their whole life. We have already written more than once how it will end. The only question is time. The funny thing about this situation is that even the most ardent supporters of buying cryptocurrencies can hardly point what is the fundamental difference between Bitcoin at the start of 2020 with price 7K, and Bitcoin at the start of 2021, when it is quoted at 40K +. Another important event of the past week, which determined the mood on the oil market for the whole week, was the OPEC + meeting. It was supposed to approve the next increase in production by 0.5 million b / d. Considering that the opinion on this issue was divided (Russia was actively for increase, Saudi Arabia and a number of other countries were against this), they could not make a decision on Monday. On Tuesday, unexpectedly for everyone, they did not increase production, because Saudi Arabia offered to voluntarily reduce its production by 1 million b / d for two months.
BITSTAMP:BTCUSDShort
by Trade24Fx
2
NFP data, cryptocurrency madness and hopes for the best This week can definitely be called the Democratic. Biden is officially recognized as the President of the United States and less than two weeks are left before his inauguration. Senate is controlled by Democrats. Accordingly, the eyes of the markets are again obscured by money. Expectations of cash rain in the form of new stimulus packages are spurred on by the “fear of missing out” and decisively everything is being bought up, from assets in the stock markets to cryptocurrency and commodity ones. Bitcoin reached 40K, but analysts predict a minimum of 100K. However, we already passed the promises of 100K or even 500K in 2017. Recall that in 2018, instead of the promised of half a million dollars or at least 18K-19K, as it was in December 2017, bitcoin was given a little more than 4K. The funny thing is that the 80% fall in bitcoin prices was far from the first in its history, but the memory of the cryptocurrency fans is a little longer than that of the goldfish, so you should not be surprised at the current growth or how it will inevitably end. The whole question is only in time. However, it is in the nature of people to believe in the best. And now, at the peak of the pandemic and lockdowns, which are intensifying and prolonging lockdowns around the world, belief in a quick economic recovery has re-activated. Although, it would seem, spring-summer 2020 showed the economic price of lockdowns. But everyone has already forgotten the drop in US GDP by 30% + in the second quarter of 2020. In general, we can write a lot about the forgetfulness of the markets. But lets get back to today. Labor market statistics have always been the subject of intense interest from financial markets. Now all attention, of course, will be on the NFP numbers. The indicator has been steadily declining over the past six months, and there is absolutely no reason to expect a break in this trend. That is, the data will almost certainly come out weak with a high probability of going into the negative zone. For the markets, this can be a reminder that things are not as great as they think. Accordingly, today we can witness selloff in the US stock market, but the dollar may well strengthen, riding a panic wave using its safe-haven status.
BITSTAMP:BTCUSDShort
by Trade24Fx
1
Blue wave, chaos in Washington, and frightening ADP data The Blue Wave (Democrats take control over of the White House, Congress and Senate), widely anticipated in November but initially failed, appears to become real yesterday. The results of the Senate elections from Georgia showed that control of this last bastion of the Republicans is shifting to the Democrats, as with a 50-50 vote, the decisive vote passes to the US Vice President. What does this mean for financial markets? There is no consensus. The most popular version is an increase in stimulus for the US economy. It seems to be a powerful positive signal for the stock market (especially if we recall 2020), but on the other hand, the issue of inflation may become extremely relevant with the subsequent reaction of the Fed in the form of tightening monetary policy. The rise in the US rate can become the needle that inevitably pierces bubbles in the US stock market. Another threat of the "blue wave" for the US stock market may become the corporate tax increase promised by Biden. This means that buyback programs already cut in 2020 will be under the pressure, or even the opposite processes might start - lacking cash, companies will sell their previously bought back shares. Yesterday was marked by chaos in Washington. The generally routine procedure for approving the results of the electoral votes at a joint meeting of the Senate and the House of Representatives was interrupted by a crowd of Trump supporters, which took the Capitol Hill by storm and broke into the building of Congress. The meeting was interrupted, the congressmen were evacuated, the Washington authorities announced a lockdown. In general, Trump decided to leave as loudly as possible. As a result there have been discussions among some Cabinet members and Trump allies about invoking the 25th Amendment, which would allow a majority of the Cabinet to declare Trump unable to perform his duties and remove him. This week has been extremely successful for the oil market. Following the surprise from Saudi Arabia (a promise to reduce production by 1 million barrels per day for two months) and the OPEC + decision not to increase production in February, the official data on US oil stocks showed a sharp decline (by 8 million barrels). which was the fourth consecutive decline in US oil stocks. But new pandemic records in the world, as well as in the United States and Great Britain, which automatically means at least a delay in the pace of economic recovery, and in the worst-case scenario a move into a second recession, we still have no any will to buy oil from current prices. Moreover, yesterday's figures on employment in the US from ADP not only came out much worse than forecasted, but also went into the negative zone (-123K against the forecast of + 88K). Markets are waiting for the official statistics on the US labor market (will be published tomorrow) and looks like they have to prepare for the worst (negative values in the NFP data).
DJ:DJIShort
by Trade24Fx