Archives of “July 2020” month

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FOMC meeting minutes: Most Fed officials urged more explicit forward guidance

  
  Analysis

June FOMC meeting minutes

LINK to the Meeting Minutes from hte FOMC.

  • Officials agreed on need for more analysis of yield curve control
  • Fed was committed to using its full range of tools to support the US economy
  • In their discussion of forward guidance and large-scale asset purchases, participants agreed that the Committee has had extensive experience with these tools, that they were effective in the wake of the previous recession, that they have become key parts of the monetary policy toolkit, and that, as a result, they have important roles to play in supporting the attainment of the Committee’s maximum-employment and price-stability goals.
  • Participants agreed that the data for the 2nd quarter would likely show the largest decline in economic activity in post-World War II history
  • discussed whether yield curve caps or targets could support forward guidance and complement asset purchases
  • most officials urged more explicit forward guidance
  • most market participants did not anticipate policy changes at the June meeting. The target range for the federal funds rate was expected to remain at the ELB for at least the next couple of years, although many survey respondents attached some probability to the target range increasing in 2022.
  • Most of Fed officials urged more explicit forward guidance
  • officials expected strong second-half gain in consumption
  • a number of participants a judge of forward guidance on rates and bond buying should aim to support rapid economic recovery, foster durable return to 2% inflation
  • participants expected social distance in, saving in lower levels of employment and income to restrain the pace of expansion over the medium-term
  • participants agreed that for guidance and asset purchases have important role in meeting employment and inflation goals
  • consumer recovery not seen as rapid beyond 2020
  • most Fed officials urged more clarity on asset purchases
  • number of participants spoke in favor of tying forward guidance to inflation goals allowing a modest temporary overshoot of 2% target
  • participants stressed that health care, fiscal policy measures, and actions by households and businesses would shape recovery prospects
  • a couple favor guidance based on unemployment rate since it had been kept low in the past and could signal an extended period of support for the economy
  • full recovery in employment would take some time
  • a few participants favored forward guidance based on calendar promises, given the uncertainty about how fast the economy might recover
  • a 2nd wave of coronavirus outbreak was no less plausible than their baseline forecast scenario and if it occurred, economic disruption will be more severe and protracted

Geopolitical: US readies global sanctions on China over Xinjiang abuses

  
  Analysis

No word on what those sanctions might be

A headline is out saying that the US is readying global sanctions on China over Xinjiang abuses. There is no mention of what those sanctions might be.

UPDATE: US sanctions likely to target China’s Communist Party officials responsible for Xinjiang abuses. Bloomberg is citing a source.
The Xinjiang region is home to ethnic minorities. The Chinese government is said to walking more than 1 million Uighur and other mostly Muslim minorities and “reeducation camps”.  However reports say that Uighur women and other ethnic minorities are being threatened with internment in camps for refusing to abort pregnancies that exceed birth quotas.

The best traders are not afraid.

  
Analysis, Education

They aren’t afraid because they’ve developed the greatest mental flexibility to flow in and out of trades based on what the market is telling them about the possibilities from its perspective. They listen to the market.

The best traders developed attitudes preventing them from being reckless. Confidence and recklessness aren’t the same.  

The best traders truly accept the risk. They have eliminated the tendency to rationalize. 

The successful trader that you want to become is a future projection of yourself that you have to grow into. Growth implies expansion. Learning. Creating a new way of expressing yourself. This is true even if you’re already a successful trader in order to become more successful.  
Chapter 2: 

Taking Care of Your Mental Health

Mental health is your overall emotional, psychological and social well-being, how you feel about yourself and others, your ability to understand your feelings and go through everyday difficulties. 

Maj. European indices end the session lower but well off intraday low levels

  
Analysis, Global Indices

German DAX, -0.4%. France’s CAC, -0.26%

The major European stock indices are ending the session lower. However the closes are well off intraday low levels.  A look at the closing levels are showing:

  • German DAX, -0.41%
  • France’s CAC, -0.27%
  • UK’s FTSE 100, -0.16%
  • Spain’s Ibex, -0.19%
  • Italy’s FTSE MIB, -0.44%
  • Portugal’s PSI 20, -0.93%

German DAX, -0.4%. France's CAC, -0.26%_

In the European and 10 year note sector, yields are higher with Germany leading the way at a 6.0 basis point gain in the benchmark 10 year yield.
European yields are higher with German 10 year yield up 6.0 basis pointsIn other markets:
  • spot gold is trading down $-15.75 or -0.89% at $1765.14
  • WTI crude oil futures are trading up $0.53 or 1.38% at $39.81. The high price reached $40.58. The low price extended to $39.05
in the forex market, the US dollar has moved lower in the New York session but the CAD is the weakest of the majors. The GBP and JPY are the strongest. The GBPUSD is moving above its 100 day moving average at 1.2464 level and the 50% retracement of the move down from the December 2019 high at 1.2461. The GBPUSD is currently trading at 1.2469..

Crude oil inventories -7195K vs. -500K estimate

  
Analysis, Crude

Weekly Department of Energy inventory data for the week of June 26

  • Crude oil is trading at $39.70
  • crude oil inventories – 7195K vs. -500K est. The private data came in at -8156K.
  • gasoline inventories 1199K vs -1500K est. The private data showed a draw of -2459K
  • distillates inventories -593K vs 500K est.  The private data showed a build of 2638K
  • Cushing OK crude inventories -263K vs -991K last week
  • refinery utilization 0.9% vs. 0.5% estimate
  • crude oil implied demand 17997 vs 17334 last week
  • gasoline implied demand 9043.3 vs 8893.7 last week
  • distillates implied demand 4843.7 vs 4594 last week

The Coin Flip Test And Trade Probability -Anirudh Sethi

  
Analysis, Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

Since we are human merchants and we like what we do, executing the above-portrayed model would require a ton of tolerance and it would likewise be extremely exhausting. we better utilize a computerized forex-system to execute this coin-choice exchanging model. all we would need to do is truly utilize a guarded hazard the board of most extreme 1% per exchange, on the grounds that a half winning-likelihood would not imply that we would not need to confront 10 or 15 failure exchanges a column! recollect that these probabilities become valid in the long run!

since we like to inhale and encounter the business sectors, and we obviously need to exchange physically utilizing specialized examination or key news, we should now have a more critical investigation of the universe of cash the board, stop misfortune, take benefit, and obviously additionally the satisfactory exchange volume. since section 1 of this article arrangement, we realize how a dealer can ensure his record by straightforward RISK MANAGEMENT counts. this is totally vital and its significance can’t be rehashed regularly enough!

Presently, in the comic, sadly, flipism didn’t turn out to be well for Donald. A coin flip for every choice brought about a progression of incidents for poor Donald. Amusingly, however, so as to bargain out some proper recompense, Donald managed to pursue down the con artist Professor Batty by finding the misrepresentation behind the correct entryway dependent on a coin flip, so maybe the way of thinking holds some legitimacy. In spite of the fact that I don’t really advocate carrying on with a real existence dependent on coin flips, incidentally, coin flips and the hidden factual rules that administer coin flips are especially powerful when applied to certain issues normally looked in the information.

without utilizing any investigation technique each time you open exchange, you have a half possibility that the exchange goes toward you! the reality of the situation may prove that in 10 exchanges it goes 8 or multiple times toward you, or against you… be that as it may, in 1.000 exchanges you will have indirect 500 victors and 500 washouts. you can contrast that with tossing a coin. the more regularly you toss a coin the more you can be certain, that the scientific probability will appear and affirm the half possibility for each side of the coin or every bearing of an exchange. knowing this, all you need to do ist to pick an SL/TP-RATIO of 1:2. for instance 20 pips SL and 40 pips TP. in the event that you currently win each second exchange (half), you will naturally make benefits!

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Markit manufacturing PMI for June (F) 49.8 vs. 49.6 preliminary

  
Analysis, Economy

Markit Manufacturing PMI data for June 2020

MARKIT PMI data
  • market manufacturing PMI for June (F) 49.8 vs. 49.6 in the preliminary report. The reading is the high since February 2020
  • the reading below 50 represents the 4th consecutive month of contraction
  • new orders 50 vs. 49.5 in the preliminary report. Highest reading since February 2020
  • output rises to 47.5 vs. 34.4 in May. Highest reading since February 2020

The USDJPY tests 38.2% retracement and bounces

  
Analysis, Forex

Price doesn’t fall below upward sloping trendline and 100 hour moving average in the process

The USDJPY is trading lower on the day after a move above its 100 day moving average late yesterday and that the start of the new trading day faded.
Price doesn't fall below upward sloping trendline and 100 hour moving average in the process_
The 100 day moving average comes in at 107.878 today. The price moved above it in the last few hours of trading yesterday and extended to the highest level since June 9 at 108.158 before reversing lower. Buyers turned to sellers after breaking back below its 100 day moving average and trundled lower.
The fall took the price below an upward sloping trendline (currently at 107.56). And its 100 hour moving average at 107.426 currently (blue line in the chart above). However, the next target at the 38.2% retracement at 107.359, and recent swing highs from June 26 (at 107.346) and June 29 (at 107.367), stalled the fall. The low reached 107.355.
The price currently trades at 107.47 in this trying to hold support against its 100 hour moving average and the currently hourly bar.
If the price can hold that 100 hour moving average level, we could see a rotation back to the upside. If not getting below the 38.2% retracement is still a hurdle that needs to be surpassed. A correction to the 38.2% retracement is simply a plain-vanilla correction.
Overall some bearishness, but the bearishness has found a stall point at a corrective target. Getting below the 100 hour moving average and 38.2% retracement is still key for further downward momentum.
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