Today's Highlights
Reversing the Trump Trade
Bitcoin's $120 Day
Lots of news today
Please note: All data, figures & graphs below are valid as of January 5th. All trading carries risk. Only risk capital you can afford to lose.
Market Overview
The stock indexes continued their slow climb upward with relatively little volatility. The FOMC released their meeting minutes from the December 14th meeting but revealed that, guess what, you're not going to believe it... Trump is a wild card
Janet Yellen and her cronies are using Donald Trump as an excuse to throw forward guidance out the window. So whatever the dot plot they released was showing is now apparently off the table. The main point is, that if Trump is able to reduce taxes like he said he would, they may need to raise rates faster in order to offset some of the effects.
Oddly, the prospect of rising rates quicker did not have a positive effect on the dollar and the US dollar index is now just below 102, its lowest point since the December 14th meeting.
So as far as the dollar, we're seeing some retracement but there's a long way to go until we have a full reversal, if that ever happens. For those who believe the USD will rise further, this could be a great entry point.
Another currency we can look at to gauge the movement is the USD/JPY. As of this morning, we're seeing the pair below 116, also, for the first time since the Fed raised rates.
Here’s where the Trump trade was indeed reversed: with the help of the People's Bank of China.
Here's the USD/CNH, which due to harsh capital controls is now experiencing a liquidity crunch. In short, the PBoC did such a great job limiting the flow of money outside of China that now there's a shortage of yuan outside of China. Go figure!
Gold and silver are also seeing some further strength off the back of the FED, with gold popping above $1170 an ounce, a most significant level indeed.
And last but certainly not least, the single biggest mover of the day was Bitcoin, with a move of more than $120 from low to high. The all-time high for bitcoin is now about $100 away and if gold doesn't start moving itself it could be overtaken today.
Gold ounce: $1175
Bitcoin: $1125
Ladies and Gentlemen, the digital revolution is at play.
News out today
Lots of stuff coming up. First in the UK we'll get the services PMI, watch the pound at 9:30 GMT.
Pre-US opening we'll get the ADP NFP numbers. At 3:00 PM GMT will be the ISM Non-manufacturing PMI.
To top it all off, Crude Oil inventories at 4:00 PM GMT. Some Trade Balance Figures could move the Aussie later this evening as well, but I wouldn't stay up for it unless you've got a position open already.
Disclaimer: This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results. All trading carries risk. Only risk capital you're prepared to lose.