Source: ACTIONFOREX.COM
"The market is always right". That's by no means saying that the market is efficient, that's a topic for the academics. But, the market always move with certain underlying forces. We may or may not always understand why stocks, yields, currencies commodities move that way. It doesn't matter. And indeed, the voice of the market is usually the loudest when it does something that doesn't make sense. It's up to us to hear it or ignore it. And, reading news is not about reading the news but the reactions to the news. It's our choice to see the reactions, or just to criticize the reactions.
So coming back to "reality", we've got a very dramatic week, especially towards the end. And news were indeed rather negative to Dollar. US launched military strike in Syria and relationship with Russia tensed up after that. Russia even condemned that US is just "one step away" from war. The highly anticipated summit between US President Donald Trump and Chinese President Xi Jinping ended with "very frank, very candid" discussions. But then? Nothing more. Non-farm payroll grew a mere 98k in March even though unemployment rate dropped to 10 year low.
How did the markets respond? DJIA closed down -0.03% on Friday at -20656.10, and down -7.12 pts only for the week. S&P 500 closed down -0.08% on Friday to 2355.54, down the week by -7.18 pts for the week. 10 year yield dived to as low as 2.271 on Friday but closed the day up 0.030 at 2.373, down -0.023 for the week. Dollar index gained 0.46 on Friday to close at 101.13, up from prior week's 100.56. The resiliences in stocks, rebound in yields and the surge in Dollar were impressive. And these developments argue that, maybe those news were not bad news at all.
One of the explanations could be found in the jump in oil price on geopolitical risks. Energy stocks' rally somewhat offset losses in financial stocks. And technically, WTI crude oil maintained a higher high, higher low pattern and is back above 55 day EMA. It should now be heading back to 55.24 resistance and above to extend the larger up trend. And with that, upside pressure on headline inflation could be revived that would eventually pass through to underlying inflation. ...Read full report
"The market is always right". That's by no means saying that the market is efficient, that's a topic for the academics. But, the market always move with certain underlying forces. We may or may not always understand why stocks, yields, currencies commodities move that way. It doesn't matter. And indeed, the voice of the market is usually the loudest when it does something that doesn't make sense. It's up to us to hear it or ignore it. And, reading news is not about reading the news but the reactions to the news. It's our choice to see the reactions, or just to criticize the reactions.
So coming back to "reality", we've got a very dramatic week, especially towards the end. And news were indeed rather negative to Dollar. US launched military strike in Syria and relationship with Russia tensed up after that. Russia even condemned that US is just "one step away" from war. The highly anticipated summit between US President Donald Trump and Chinese President Xi Jinping ended with "very frank, very candid" discussions. But then? Nothing more. Non-farm payroll grew a mere 98k in March even though unemployment rate dropped to 10 year low.
How did the markets respond? DJIA closed down -0.03% on Friday at -20656.10, and down -7.12 pts only for the week. S&P 500 closed down -0.08% on Friday to 2355.54, down the week by -7.18 pts for the week. 10 year yield dived to as low as 2.271 on Friday but closed the day up 0.030 at 2.373, down -0.023 for the week. Dollar index gained 0.46 on Friday to close at 101.13, up from prior week's 100.56. The resiliences in stocks, rebound in yields and the surge in Dollar were impressive. And these developments argue that, maybe those news were not bad news at all.
One of the explanations could be found in the jump in oil price on geopolitical risks. Energy stocks' rally somewhat offset losses in financial stocks. And technically, WTI crude oil maintained a higher high, higher low pattern and is back above 55 day EMA. It should now be heading back to 55.24 resistance and above to extend the larger up trend. And with that, upside pressure on headline inflation could be revived that would eventually pass through to underlying inflation. ...Read full report
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