Will the USD Turn Bearish in Case of A June FED Rate Cut Signal?

Posted on March 19, 2024March 19, 2024 by Skerdian Meta

The US dollar has remained persistently strong and is currently near the top of historical ranges. However, the strength of the dollar and potential Federal Reserve rate cuts alone may not be sufficient to signal a top in the dollar’s cycle. We see a case that suggests that initial Fed rate cuts may not halt the USD cycle, as historical patterns indicate that the cycle typically turns well after the Fed begins easing and US interest rates fall below the median of G10 countries. Historically, the US interest rate cycle has been a significant driver of major USD cycle tops. Continue reading “Will the USD Turn Bearish in Case of A June FED Rate Cut Signal?” →

Polkadot Falls Almost 6% as Bears Grip Crypto Market

Posted on March 19, 2024March 19, 2024 by Timothy St. John

Crypto Token Polkadot (DOT) fell 5.8% on Tuesday amid a bearish cryptocurrency market that started with Bitcoin (BTC) and worked its way down.

Polkadot Polkadot has given up gains from March gains after the first rejection off the resistance — Polkadot has given up gains from March

The Polkadot price is now at $9.14 (DOT/USD) after achieving a high of $11.84 just last week. Over the last 30 days, Polkadot had been gaining, staying bullish with the rest of the crypto market. Then on Thursday of last week, the coin peaked and started to fall. It has continued to plummet since then.

The rest of the crypto market is mostly down, with Bitcoin falling more than 3% today and staying bearish for several days in a row now. The bullish trend we saw continue for weeks was mostly attributed to Bitcoin pulling up the majority of the cryptocurrency market. With that coin in decline, all the other tokens are feeling it too.

Can Polkadot Recover?

As Polkadot continues to drop, investors may be wondering if it is a good buy. It is very likely to keep on falling for the near future, as long as the rest of the crypto market stays down. Once Bitcoin makes a recovery, we expect to see Polkadot and other coins start to recover as well.

Polkadot creates a Web3 ecosystem that lets its users interact with other crypto currencies in a unique way. They are all connected like a line of dots- separate from one another, but still tied together digitally.

Because Polkadot is a major crypto player in the Web3 structure, it has the potential to gain a lot of momentum in the coming months and years. The downturn we are seeing right now is likely to be a very temporary setback, and Polkadot should be able to recover soon. When it does, it is likely to go well past the recent high of almost $12.

Remember that its all-time high is $55, which means it is entirely possible Polkadot will end up much closer to the mark than to its current level by the time the year is out. We think the crypto market still has plenty of steam left in it this year and now, when the market is low, could be a great time to invest.

Trump Doesn’t Have Enough Cash to Pay $454 Million Lawsuit

Posted on March 19, 2024 by Timothy St. John

Donald Trump cannot pay the $454 million ordered by a lawsuit verdict, according to him, because the payment must be made in cash.

stocks — Can Donald Trump pay his bills?

Trump says he does not have enough cash on hand, and he was unable to put up his real estate for collateral. He contacted several major insurance companies to secure an appeal bond so that the verdict amount could be covered, but they turned him down.

His next move is to hold a fire sale, getting rid of many of his properties so that he can pay the required amount. That will only be necessary, though, if he cannot get the bond waived when attempting to challenge the verdict. Trump made these statements on Monday after the verdict, and he must pay by March 25th, unless he can secure a postponement.

The verdict came down weeks ago, and Trump’s lawyers have been working furiously trying to secure a bond, but to no avail. The filing indicates that Trump is not as loaded with cash as many would suspect, especially since he will need to pay more than $540 million in penalties as a result of two civil trial losses for the year already.

Trump’s Busy Year

At the same time, Trump is trying to gain back the presidential office in an election year that already has seen the deck stacked against him. Numerous states have worked to get Trump’s name taken off their ballots, but Trump has made some headway there and enjoyed the help for the Supreme Court, which says his name cannot be stricken from the ballots.

In all of the criminal prosecutions Trump has dealt with recently, he denies any wrongdoing. He says his successful business is under attack.

An appeal could come at any time, if the appeals court decides to honor his request to challenge the lawsuit. One attorney alleged that Trump inflated asset values for years. If her account is believed, Trump may have an uphill battle proving that he could secure the necessary funds for the lawsuit payments by selling his properties.

Trump recently made statements about cryptocurrency, saying he had accepted payment in Bitcoin in the past and has no intention of regulating cryptocurrency markets any further than they have already been.

The Last US Data, US Housing Starts and Building Permits Impress

Posted on March 19, 2024March 19, 2024 by Skerdian Meta

The Housing Starts and Building Permits were the last round of economic data from the US ahead of tomorrow’s FED meeting, which showed a decent improvement. The FED won’t be swayed by this data, but it shows that the housing sector is recovering after softening for several months, and that the US economy is in decent shape. Continue reading “The Last US Data, US Housing Starts and Building Permits Impress” →

USD/CLP: Inland Revenue Minister Mario Marcel Shines Optimism on Chilean Economy

Posted on March 19, 2024March 19, 2024 by Gino Bruno D'Alessio

The minister for Inland Revenue, Marcel made a positive speech on the state of the Chilean economy during the Latam Focus seminar.

Marcel mentioned the projection for GDP growth of 2.5% seemed to be even more realistic given the recent economic data from January, and that February data could possibly reaffirm the 2.5% forecast.

He also stated that Chile had gotten past its social problems and the disequilibrium that came after the Covid pandemic. The head of Inland Revenue also said that copper mining activity had surpassed its previous peak from November 2021.

However, the USD/CLP didn’t react to those promising words for the Chilean economy, today’s momentum saw the peso weaken sharply, falling to 969.50 against the US dollar. The market was led more by dollar strength, as investors perceive a longer wait before the Fed starts cutting rates.

Copper prices also played a part today, as copper futures lost 1.47% from the open. While the bullish sentiment for copper seems intact, such a sharp drop would influence copper exporters expectations for the exchange rate.

Technical View

From the day chart below for USD/CLP we see the bullish trend is still in place. The market has bounced away from the upper side of the Ichimoku cloud, as many market technicians would have expected.

The break below a major trend (orange line) 6 trading sessions ago gave rise to more bearish price action. The nearest major support level (black line) was at 925.53, but the market found a much great support level from the green Ichimoku cloud.

To consider the bull trend as active, we would need to see the market rise above its recent high at 994.36. A lot depends on Wednesday’s FOMC press conference. However, from a purely technical standpoint the next stop for the peso is to test the resistance area (red line) at 994.36.

Today’s price action has seen the peso among the currencies losing the most ground as we await the FOMC. Expectations have been shifting over the past 3 trading sessions and the US dollar has been the main beneficiary.

We can expect tomorrow to get extremely volatile with market participants reading into Fed chair Powell’s words. It seems the market is gearing up for more hawkish statements from the governor of the Fed, and a higher US dollar.

FedEx and Nike Stocks up before Earnings Reports Hit

Posted on March 19, 2024 by Timothy St. John

Both FedEx and Nike have earnings reports that are scheduled to be released on Thursday. Before those reports come out, the companies’ stocks are up.

Earnings reports are coming soon for these Nike and FedEx.

Nike (NKE) is up 1.04, while FedEx (FDX) is up 1.12%, indicating that traders think both of these companies will post positive earnings reports in the coming days.

FedEx Earnings Outlook

For FedEx, the company’s third quarter fiscal earnings are set to be released. The expectation is that revenue will be down slightly but that shipping will increase over the next quarter. According to analysts, revenue should be down about 1% for the quarter for FedEx, but share prices should increase by 1%.

Retailers are looking forward to an earlier than normal shipping season, which will drastically benefit FedEx. They expect the height of that shipping season to happen in June, which could boost FedEx sales very high in the near future. It is no surprise that with these estimates FedEx has a positive stock price outlook. That may change on Thursday, however, if the report is not in line with expectations.

Nike Earnings Outlook

On Thursday, Nike’s third quarter earnings report will be released as well, detailing the company’s revenue and projecting sales estimates for the coming fiscal quarter.

Nike’s stock price started to fall last week and only Monday did it begin to climb out of the ditch. Expectations are moderately positive ahead of the earnings report.

During the last earnings report, Nike’s earnings were down 3%, with wholesale revenue down 9%. The company announced it would be laying off workers and reorganizing the business structure in order to save an estimated $2 billion. If Nike was successful in pulling that off, then that could pay out very well for this upcoming earnings report.

Watch the report on Thursday to see if the company really did save money and boost its profit margins, which is where the focus will likely be in light of its efforts to restructure.

Official numbers: The Colombian economy grew by 1.6% in January.

Posted on March 19, 2024 by Ignacio Teson

The activities that drove economic growth were agriculture, livestock farming, fishing, mining, and other primary activities.

Colombia’s GDP growth can be seen in the image.

The National Administrative Department of Statistics (DANE) revealed that the country’s economy experienced a growth of 1.6% in January 2024 compared to the same month in 2023, as reported on Monday, March 18th. This is because in the first month of this year, the Economic Monitoring Indicator (ISE) was 114.39, while in the first month of last year, the index corresponded to 112.59.

The economic growth during this period was mainly attributed to the 10.26% annual rebound in primary activities, which include agriculture, livestock farming, hunting, forestry, fishing, mining, and quarrying.

This result marks the third consecutive month of positive figures for the Colombian economy. In November 2023, it was 1.94%; in December, 0.12%; and in January, 1.6%.

On the other hand, industrial activities recorded a decrease of 4.99%. Secondary activities comprise the production of textiles, food and beverages, rubber, petroleum derivatives, and the construction sector. The decline in these sectors was particularly notable in manufacturing and construction, which have experienced contractions over the last eleven months.

Meanwhile, service activities increased by 1.03%. These include everything related to the exchange of services such as banking services, communications, healthcare services, restaurants, security services, education, hospitality and tourism, transportation, and entertainment.

This result is encouraging compared to the figures from August, September, and October when there was a decline. Last year’s growth was below experts’ expectations, which ranged between 0.9% and 1.4%.

Positive day for the Brazilian markets, contrary to the overall tone of the day.

Posted on March 19, 2024 by Ignacio Teson

The Ibovespa, main index of Brazil, rose 0.17% to 127,129 points, while the dollar advanced 0.20%, trading at R$ 5.035.

The dollar opened higher this Tuesday (19), with all eyes still focused on the Federal Reserve meeting, the US central bank, which is expected to announce its interest rate decision on Wednesday (20).

In the Brazilian stock market, the Ibovespa also rose, still driven by a sharp increase in Vale’s shares.

The Ibovespa rose 0.17% to 127,129 points, while the dollar advanced 0.20%, trading at R$ 5.035.

[[USD/BRL-graph]]

The behavior of the dollar was in line with what was seen abroad, where the index measuring the performance of the US currency against a basket of six currencies rose 0.30%, to 103.890.

In the local scenario, the expectation is that the Central Bank of Brazil is likely to implement a 0.50 percentage point cut in the Selic (benchmark interest rate), maintaining the pace adopted in the last meetings.

As for the Brazilian stock market yesterday, it ended the day with a slight increase of 0.16%, reaching 126,954 points, driven by strong gains from Vale and Embraer, which were among the most traded stocks of the session.

The Federal Reserve begins its two-day monetary policy meeting on Tuesday, where it is expected to keep interest rates steady, according to market forecasts. Investors will be watching for clues from Fed officials about their next steps, at a time when many traders have delayed bets on when the central bank will make its first rate cut due to US inflation resilience.

Along with the monetary policy statement, the Fed will release its so-called “dot plot” on Wednesday, which gathers officials’ projections for variables such as inflation, growth, and, most importantly for the markets at the moment, interest rates.

If you have high interest rates in the United States –which would be a place where you have less risk with high interest rates– you have a strong tendency for flow to concentrate there.

That’s why we’ve seen this rise in the dollar in the last two, three months; because the predictions of a drop in interest rates in the US ended up being postponed.

Selling EUR to USD As the Buck Keeps Pushing Ahead of the FOMC

Posted on March 19, 2024March 19, 2024 by Skerdian Meta

The rate of EUR to USD continues to fall after EUR/USD failed to reach 1.10 last week. The FOMC meeting is having a positive impact on the US dollar, although everything points to a June rate cut by the FED, however, the ECB rate cut for June is a done deal, which is weighing on the Euro. Continue reading “Selling EUR to USD As the Buck Keeps Pushing Ahead of the FOMC” →

Argentina: Stocks surge up to 10%; bonds hit post-restructuring peak.

Posted on March 19, 2024 by Ignacio Teson

Following the fiscal surplus data for February, and despite the Senate’s initial rejection of the deregulation decree, the market is experiencing strong improvements this Tuesday.

The Buenos Aires stock exchange extends its positive streak this Tuesday, March 19th, as well as Argentine companies listed on Wall Street, while the AL30 bond surpassed $50 and the country risk reached a new 30-month low.

Traders and analysts agree that the local financial market seeks to align with favorable macroeconomic indicators, despite the political disputes faced by the new government of Javier Milei.

The S&P Merval index advances 2.2% to 1,148,865.86 units, after jumping 5.4% in the previous session, driven by energy companies.

In the leading panel, the stocks with the highest gains are Mirgor (+10.4%), Grupo Supervielle (+6.5%), and Transener (+4%). Meanwhile, the only ones declining are Transportadora de Gas del Norte (-1.6%) and IRSA (-0.8%).

This Tuesday, the trade balance for February is released, and it is expected to be the third consecutive month with a positive balance. The government has just reported an unusual fiscal surplus in the first two months of the year.

Last week, the Senate rejected a mega-decree (DNU) that deregulates the economy promulgated in December by Milei, a severe setback for government objectives, although it remains in force until its next consideration in the Chamber of Deputies.

In favor of macroeconomic improvement, although with serious social risks due to the high poverty and indigence suffered by Argentinians, there is less exchange rate pressure due to a firm foreign exchange sale from the agricultural sector, which has recently allowed the BCRA to exceed the purchase of $10 billion for its depleted net reserves.