Archives of “August 2020” month

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Bank of Japan refuses trader requests to work from home

  
  Analysis
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Bloomberg had this piece up earlier (link for more), citing ‘people familiar:

  • The BOJ doesn’t allow home computers to connect to its network for conducting asset purchases and other market transactions
  • Three firms (at least) have asked the BOJ whether traders can participate in its operations from outside the office
  • BOJ-Net infrastructure is used for yen transactions daily, connected via dedicated cables to computers at dozens of financial firms so they can trade assets with the central bank or buy bonds from the government
  • BOJ is concerned about cybersecurity risk.
The hot new toy for summer probably won’t be keenly sought after amongst BOJ counterparties:
Bloomberg had this piece up earlier (link for more), citing 'people familiar:

Citi on gold , raise their targets

  
Analysis, Gold / Silver

Comments from Citi on gold. lifting their short-term targets to ~$2,100/oz. 6-12m targets breaching $2,300/oz seems plausible.

In briefr:
  • A lot of retail accounts seen liquidating at sub 2000, especially those that bought gold around the 2050 – 2100 level.
  • However, deterioration of US-China relations had led money flow into safe havens. Gold price rebounded to above $1900 level.
  • We lift gold short-term targets to ~$2,100/oz. 6-12m targets breaching $2,300/oz seems plausible. The record pace of ETF investor inflows, a weakening US$ and negative real yields are the primary drivers for the push higher.
  • GoldUSD has been closer to home a break to a new highs would suggest an extended move initially towards $2,400 (the top of the upward trend line).
Comments from Citi on gold. lifting their short-term targets to ~$2,100/oz. 6-12m targets breaching $2,300/oz seems plausible. 

NASDAQ closes at a record level

  
Analysis, US Market

S&P index falls short once again

The NASDAQ index closed at a record level at 11129.72. I was above the previous record at 11108.07.

The S&P index closed short of its record high at 3386.15.
The Dow industrial average has been down for 2 last 3 trading days
The final numbers are showing:
  • S&P index up 9.14 points or 0.27% at 3381.99. It’s high price reached 3387.59. It’s low price extended to 3379.22
  • NASDAQ index closed at 11129.72. That is up 110.42 points or 1.0%. It’s high price extended to 11144.52. It’s low price fell to 1108.30
  • The Dow industrial average salt more selling today. It close down -86.11 points or -0.31% at 27844.95
Financials were under pressure today. After the close on Friday it was officially disclosed that legendary investor Warren Buffett had rid himself of a lot of his is financial stock exposure in the 2nd quarter.
 Bank stocks
Buffett also showed an investment in Barrick Gold which helped to push up the price of spot gold. Spot gold was up near $40 on the day or 2.06%, while Barrick Gold rose by and oversized 11.63%. It must be good to be Buffett.

Apple/Epic battle notched up as Apple terminates all developer accounts

  
  Analysis
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Apple removed Fortnite from app store

Last week Apple removed Epic’s Fortnite from there app store claiming that Epic violated their guidelines by announcing a way for players to buy in-game currency outside their proprietary payment systems Fortnite sued Apple (and Google) claiming both companies’ app stores are monopolies.

Today Epic is tweeting:
Apple removed Fortnite from app store
The stakes are being raised it seems…

Decide the type of person you want to be. Prove it to yourself with small wins.

  
Analysis, Education
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Why the US dollar continues to fall

  
  Analysis
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USD/JPY declines below 106.00

USD/JPY is at a six-day low as the pressure on the US dollar mounts. There is some broad-based weakness taking hold. It’s increasingly becoming the default mode in the market to sell US dollars, so long as there isn’t genuine risk aversion.
There’s nothing particularly negative for the US dollar today but there are headwinds:
  1. US election risk
  2. Lack of US stimulus will hurt relative growth
  3. Equity market valuation is richer in the US, better value elsewhere
  4. Long-term monetization/inflation worries
Here’s chart on M2 from Nordea comparing the US and Europe:
USD/JPY declines below 106.00
In the smaller picture, risk sentiment is good today and that’s good enough to undercut the US dollar.
As for USD/JPY, it’s not time to worry yet but the drop in late July is starting to look like a warning shot.
USDJPY
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