WHO: COVID-19 is a type of coronavirus that starts in bats

The WHO is giving a briefing on the animal origins of the virus

Virus
  • The coronavirus origin is linked to food, that is not unique
  • The Wuhan market played a role in spreading of the virus

The headline remark will surely infuriate US officials even more.

For what it’s worth, Der Spiegel is also reporting that Germany has doubts about the US’ claim that the virus came from a Chinese lab.
The report didn’t cite a source but says that the German Federal Intelligence Service was in touch with its partners from the US, UK, Canada, Australia, and New Zealand and none of them were able to confirm the claims made by US secretary of state Pompeo.

US to begin testing coronavirus vaccine in late April, results in July or August

For those looking for a shot of hopium, the WSJ have you covered.

  • Drugmaker Moderna has shipped the first batch of its rapidly developed coronavirus vaccine to U.S. government researchers
  • first human tests … by the end of April to start a clinical trial
  • Initial results could become available in July or August
Link here. (Journal may be gated)
“Late” April is what, two months away? Ugh.
Until then…
For those looking for a shot of hopium, the WSJ have you covered.

China’s cargo crisis – some carriers plan to declare force majeure, abandon containers

Via the folks at global logistics information site Loadstar:

  • Japanese carrier ONE has joined several of its liner peers in imposing a congestion surcharge on reefer containers destined for major Chinese ports
  • some carriers are preparing to declare force majeure and leave refrigerated containers at alternative ports
  • coronavirus outbreak … severely restricting landside operations at the ports of Shanghai, Ningbo and Xingang
  • ONE … said it may need to “adjust the original transport plan”, which could result “in the discharge of reefer containers at an alternative port without prior notice”
Plenty more at that link above
Via the folks at global logistics information site Loadstar:

Weekly market roundup: Bitcoin surges up and trade tension declines

What drove markets this week

BitcoinThe dollar has generally made some gains this week against various currencies. These movements came after fairly good data from the USA as well as the signing of a first stage trade deal between the USA and China.

Some of the biggest news in forex markets this week came from central banks. Both the South African Reserve Bank (SARB) and the Central Bank of the Republic of Turkey (CBRT) cut rates against expectations. The CBRT was first yesterday morning, cutting its one-week

repo rate from 12% to 11.25% compared with the consensus expectation of 11.5%.

Then the SARB also cut its repurchase rate to 6.25% yesterday afternoon, another decision that defied expectations. In a rare display of agreement among central bankers, the SARB’s

monetary policy committee voted unanimously to cut by 0.25%.

Shares reacted eagerly to news of the preliminary Sino-American trade deal, with US500 continuing its rapid gains since Monday’s open. Many European indices and shares also reached new all-time highs.

Bitcoin-dollar, daily

Bitcoin chartBTC-USD has surged up even more in the second half of the week. Current levels around $8,900 are the highest for about two months. The red trendline here is based on the weekly chart, starting from last summer’s highs around $13,000.

We can clearly see that price has broken out upward from this trendline, facing little resistance from the 100-period simple moving average.

The first major hurdle for the bulls here is likely to be the 200-day moving average. This is expected to be a strong area that could well resist testing at least temporarily. The 61.8% Fibonacci retracement area which price is currently testing could also function as a resistance.

Technical indicators here give a very strong overbought signal. Price closed the last three days completely outside the upper deviation of Bollinger Bands (50, 0, 2).

The slow stochastic (15, 5, 5) is also clearly within the upper trigger zone. These factors would suggest that a retracement to some degree is likely within the next few periods.

American light oil, four-hour

American light oil chart

USOIL’scorrection appears to have paused for now. The large losses from last week’s nine-month highs were driven mainly by the decline of military tension between the USA and Iran in Iraq. Now, though, the signing of the first stage deal between China and the USA has given crude a significant fundamental boost.

As China is the world’s biggest consumer of crude oil, the outlook for the Chinese economy often influences the price of the commodity.

The regular data for crude were somewhat incompatible this week. The API’s stock change announced a gain of 1.1 barrels per million, but the EIA’s stock change read negative 2.55 million on Wednesday night.

USOIL didn’t react very strongly to either release, so we might expect that trade and Chinese data could continue as key drivers next week as well.

From a technical standpoint, the conditions seem to be there for oil to continue its overall uptrend from Q4 2019. Momentum to the downside has dried up this week while buying volume remains fairly high.

The most important resistances in the short term are likely to be the three moving averages, with the 200-period SMA probably the most important of these.

Dollar-yen, four-hour

USDJPY chart

USD-JPY has been somewhat less volatile this week while continuing to make some gains overall in the aftermath of decent data from the USA. Annual inflation and core inflation on Tuesday both printed 2.3% in line with expectations, the former beating the previous figure by 0.2%.

American retail sales came in at 0.3% yesterday afternoon in line with the consensus, but November’s release was revised upward slightly.

The charts look positive for dollar-yen but buying saturation could limit any ongoing gains. Price remains above all three of the usual moving averages, with the faster 50 SMA completing a golden cross of the slower two on Wednesday afternoon GMT.

On the other hand, volume remains very low, and the slow stochastic is still slightly inside the overbought zone.

It seems that most traders are waiting for key releases next week to provide some momentum, up or down. The Bank of Japan’s meeting on Tuesday morning and Japanese inflation late on Thursday evening are expected to bring some more direction to USD-JPY.

USTR calls out trade news speculation in latest statement

Specifically points the finger to the Wall St Journal ForexLive “Washington, DC –  Bob Davis and Lingling Wei at the Wall Street Journal, based on anonymous sources, have reported at least three times this week that the United States negotiators offered to cut by as much as one half the tariff rates on approximately $360 billion of Chinese imports in exchange for certain purchases.While we do not comment on the content of negotiations, we have said publicly and on the record that this is totally false, untrue and baseless.It did not happen. In addition and to be completely clear, we have personally, and on the record, told Mr. Davis and another Wall Street Journal reporter repeatedly that this is utterly false. No such offer was ever made to China by the United States. There is not a single knowledgeable American negotiator who would support this falsehood. Further, there is no Chinese negotiator who could honestly be this source.We will not speculate on why the Chinese or an American uninvolved with these negotiations would manipulate the story. This is another example of reporting on an  important alleged event based on secret sources, some of which may have obvious bias. The Wall Street Journal should make very clear that those actually involved for the United States have so clearly indicated that they are untrue, fabricated falsehoods. It should also expose possible biases of the anonymous source.” was the article in question that they are specifically referencing. To be fair to the WSJ, there will also never be any proof to substantiate the claims made by the USTR above.

OPEC Barkindo: Could see sharp supply fall in 2020 from US shale output

OPEC Secretary-General Barkindo

OPEC Secretary-General Barkindo is on the news wires:
  • likely C# downward revisions of supply going into 2020 especially from United States shale output
  • fundamentally global economy range strong
  • there is no sign of global economic recession
  • Demand numbers for 2020 has potential for an upside swing
  • confident OPEC+ members will continue with their agreement in 2020
  • some US oil companies see shale output growth in 2020 only up by around 300,000-400,000 BPD. That it is not as high as OPEC optimistic estimates
  • Saudi authorities have reassured US that Aramco IPO won’t affect kingdom’s role within OPEC as the biggest producer
  • no one in OPEC+ wants to return to where we came from during oil prices downturn
  • The Aramco IPO won’t affect Saudi Arabia’s participation in supply adjustments to ensure oil market stability

The week ahead is a big one on the US economic calendar

What’s coming up in the week ahead

The final week of the month is always a busy one. Here’s what’s coming up in the week ahead.
Monday:
  • Chicago Fed national activity
  • Durable goods orders
  • Dallas Fed
Tuesday:
  • FHFA house price index
  • Case Shiller house price index
  • Richmond Fed
  • Conference Board consumer confidence
Wednesday:
  • Weekly oil inventories
  • Fed’s Barkin and Daly
Thursday:
  • Second look at Q2 US GDP
  • Advance goods trade balance
  • Wholesale inventories
  • Weekly jobless claims
  • Pending home sales
Friday:
  • PCE report
  • U Mich final consumer sentiment
  • Chicago PMI

Ifo economist says that German economy faces a turbulent time ahead

Comments by Ifo economist, Klaus Wohlrabe, following the data earlier

Germany
  • Sees a slightly positive growth rate in 2H 2019 for Germany
  • But notes that recession is spreading in all important sectors in German economy
  • Says risk of disorderly Brexit has increased
  • Doesn’t believe that the ECB will loosen policy today
The early signs for Q3 haven’t been encouraging for Germany with the manufacturing sector in freefall as the recession in that area deepens. As that continues, the risk of spillover to the services sector will intensify and that won’t bode well for the economic outlook.
As for his comment on the ECB, I’m also leaning more towards that as the governing council may likely see fit to only change its forward guidance as they will only release their latest staff projections in September. That said, they will be skating on very, very thin ice in the mean time in managing the euro and inflation expectations.

Trading Errors

 Ignoring the downside of a trade. Most traders, when entering a trade, look only at the money they think they will make by taking the trade. They rarely consider that the trade may go against them and that they could lose. The reality is that whenever someone buys a futures contract, someone else is selling that same futures contract. The buyer is convinced that the market will go up. The seller is convinced that the market has finished going up. If you look at your trades that way, you will become a more conservative and realistic trader.

Taking too much risk. With all the warnings about risk contained in the forms with which you open your account, and with all the required warnings in books, magazines, and many other forms of literature you receive as a trader, why is it so hard to believe that trading carries with it a tremendous amount of risk? It’s as though you know on an intellectual basis that trading futures is risky, but you don’t really take it to heart and live it until you find yourself caught up in the sheer terror of a major losing trade. Greed drives traders to accept too much risk. They get into too many trades. They put their stop too far away. They trade with too little capital. We’re not advising you to avoid trading futures. What we’re saying is that you should embark on a sound, disciplined trading plan based on knowledge of the futures markets in which you trade, coupled with good common sense.

World’s Oldest Trader

World’s oldest Value Investor. Duly noted (hat tip to Mr. Melvin) that Irving Kahn is a former Ben Graham assistant and likes to buy and hold for long time– and not really a “trader” per se.

From the WSJ:


Discipline has been a key for Mr. Kahn. He still works five days a week, slacking off only on the occasional Friday. He reads voraciously, including at least two newspapers every day and numerous magazines and books, especially about science. His abiding goal, he told me, is “to know much more about the stock I’m buying than the man who’s selling does.” What has enabled him to live so long? “No secret,” he said. “Just nature’s way.” He added, speaking of unwholesome lifestyles: “Millions of people die every year of something they could cure themselves: lack of wisdom and lack of ability to control their impulses.”

Here is a link to his current portfolio (he includes a land-based driller).