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Yahoo
06-05-2025
- Business
- Yahoo
Market Prepares for the FED: Traders Expect No Surprise
The last week of April was notable due to controversial data from the US: a weaker than expected GDP was compensated by the strong employment report from Friday's NFP publication: 177k new payrolls have beaten expectations and show resilience of the US economy, especially if we recall unchanged unemployment at a 4.2% level. This situation doesn't increase the odds of an interest rate decline in May: the scenario of a one step decline had dropped to 2.6% (from 8% earlier this week) after a strong NFP report. Stock indices have been recovering this week, as market sentiment slowly turns into the positive territory: according to the 'fear and greed index' from CNN, market balances between 'fear' and 'neutral' phase, but no longer in the 'extreme fear' territory. The overall improvement is associated with the drop of the ' buy defense' narrative: Gold is no longer in favor, along with EUR and JPY. That might also be associated with the end of a rising seasonal cycle for Gold: usually, it consolidates during the May-July period, according to seasonal studies. Crude oil, on the contrary, has a strong seasonal window to grow in May after dipping in April, so it's possible to observe the price of WTI oil getting back to the fair price of $60 (that's a price calculated by Gold had probably finished its active phase of accumulation and has a chance of locking in a consolidation, here's why: Volatility (ATR) on the daily chart had reached the long-term peak: usually, it points to a market ending the active phase of the rally. The net position of commercial traders from the COT report has been reaching new peaks on a week-to-week basis. Usually, that is associated with the declining price: the continuation of a price trend is unlikely in such circumstances, at least immediately. From 25-year seasonal studies, Gold has completed the seasonal window of growth, and has a chance of being locked in a consolidation. Crude oil had tested the lower band of the Bollinger Bands indicator on the daily chart. Being a momentum instrument, it has a chance of testing the area below the previous intermediate-term low (testing 52-55k area), after which the price may turn back to $60: the fair price according to the STEO forecast from As WTI oil is entering the seasonal window of growth, so we can assume the mean-reversion scenario to dominate in the near future, especially considering the improving market sentiment. This article was originally posted on FX Empire Franco-Nevada Poised to Rise with Gold Sportradar Group Scoring with Big Money Netflix Proves Durable Amid Uncertainty Big Money Selloff of Broadcom Could Be Long-Term Opportunity Market Prepares for the FED: Traders Expect No Surprise Big Money Buys SABESP
Yahoo
12-04-2025
- Business
- Yahoo
To The New World Order and Back
The recent dynamics of financial markets had displayed breathtaking swings from a possible market crash like in 2020 (and VIX running to 60) to a euphoric recovery of the S&P 500 index (with over 10% of growth for a single day). Let's try to figure out whether or not we observe any paradigm shift across major asset classes. The previous week's stock market turmoil was not common: usually, stocks fall as the money flows to the US dollar (investors cash out), but this time we've witnessed the simultaneous fall of the DXY and US500 (S&P500 index). That situation brought an extensive wave of fear in the market, with the volatility index of S&P 500 (Vix) driving to 60 – a rare occurrence observed only during the COVID-19 pandemic freefall in 2020 and volatility spike in 2024. Recession fears have been spreading across the marketplace, while traders started to discount 5 possible rate declines in 2025. Everything had shifted back after US president Donald Trump had turned most of the tariffs back (except for China). As a result, we've seen a massive euphoric pullback of S&P 500, which was trimmed during Friday's trading session. However, probabilities of a sharp interest rate drop have stabilized, according to the Fedwatchtool. That's a common behavior of the market during a bearish phase: bullish pullbacks tend to be furious and rapid, but they don't last long and often end up with further liquidations. The safest strategy in such conditions is to step aside the US assets and focus more on cross currency pairs, or Gold. The latter had already reached the new peak, so that might not be the best instrument to buy. In this review, we will focus on Crude oil and EURGBP (as a cross currency pair) Crude oil had initiated a classical short coverage rally: despite a big bullish day, around 2% (42699 contracts on Nymex) of total open interest for Crude oil futures was liquidated, which means that a massive pullback was not associated with the new business coming in, but rather an old business getting out. Despite the local optimism, market fear still dominates, with VIX getting back to 46, a quite notable level. With that, we can expect USOIL to continue sliding down in the near future and reach the area below $57, at least temporarily. The fair price according to expected supply and demand had shifted to $60 (previously $75), as published in the short-term energy outlook from Euro has gained a remarkable strength against the British pound during the latest round of tariff announcement from the US administration. However, from the historical studies we know that EURGBP rarely makes substantial trends, and more often it turns black having reached 2 standard deviations from the 20-day moving average (the upper band of the Bollinger Bands indicator). It is exactly where we observe the price now. So, it is possible to observe the bearish turn for this currency pair, which may be associated with a bullish reversal for GBPUSD or stabilizing EURUSD or both. This article was originally posted on FX Empire Royal Gold Shares Shining Rollins Remains Dominant Pest Player Republic Services Transforming and Growing Strong Revenue, Drug Performance Lift Catalyst Shares Türkiye: Political Uncertainty Clouds Inflation Outlook, Further Policy Normalisation European Rearmament Plans: National Policy Choices Will Shape Fiscal Impact Sign in to access your portfolio
