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Globe and Mail
4 days ago
- Business
- Globe and Mail
European Commodities: What Do Falling Interest Rates in the EU Mean for Commodities?
European Commodity Winners This Week Euro Buxl (GXM25), +1.89% It is not frequent that the German bond tops the ranks of weekly commodity winners. However, this week, all European fixed income bonds are topping the list with bonds from the United Kingdom, France, and Italy following suit. Market participants are increasingly betting on potential interest rate cuts by the European Central Bank (ECB). This speculation is driven by expectations of slowing economic growth and easing inflation pressures in the Eurozone. Long-duration bonds like the Buxl are particularly sensitive to interest rate changes. Buxl futures broke above key technical levels, including the 10, 20, and 50-day exponential moving averages. This technical breakout has attracted momentum. While not perfectly stable, statistical correlations between BUXL futures and key commodities like oil or copper often show negative short-term correlation, especially during rate-sensitive macroeconomic periods. LME current copper stocks at 149,875 tons marked a significant decline from the high of 320,650 tons in September 2024. Statistically the current stock level is low, and when LME stocks are low, the price of copper futures tends to rise as manufacturers of wiring, electric vehicles, and other copper-intensive products may need to pay higher premiums to secure physical copper. Most technical signals point upwards, and prices are above the 10, 20 and 50 EMAs. Watch out for the 50 (9,345) EMA as this has been the key to sustain the current trend. European Commodity Losers This Week Cocoa #7 (CAU25), -7.77% Cocoa contracts have shown a reversal candle pattern testing the 50 EMA on May 30. The downtrend then found a stop and now long traders are watching if the 10 and 20 EMAs will be broken. The current RSI around 50 is in neutral territory, so if this turnaround is sustained this week, then long traders will pay attention. However, the forward curve has a definite bearish bias with contracts in December 2025 trading at 5,985 and further down into 2026. Fundamentally, early indications suggest a potentially poor mid-crop from major West African producers. A flat 10% tariff on all U.S. cocoa imports has been implemented, supporting prices. Demand is still resilient but reduced, with the ICCO reporting for 2025 Q1: Europe: –3.7% (353,522 tons) Asia: –3.44% (213,898 tons) North America: –2.45% (110,278 tons) The above figures are better than expected providing support to prices. However, it is clear that the peak reached around 10,600 will be hard to reach again in 2025 in the current context. UK Natural Gas (NFN25), -6.91% Early May experienced disruptions in Norwegian gas supplies due to maintenance, but flows recovered later in the month. The United Kingdom's gas storage capacity remains a concern. The Rough storage facility, accounting for about half of the UK's storage, has faced operational challenges. European gas storage levels are approximately 47%, below the five-year average, which could influence UK gas prices in the short term. The July gas contract is trading well below the 10, 20, and 50 EMAs showing a clear downtrend situation that began on February 13. The contract seems range bound (80-87) in the short term, leaving traders guessing the next move. Further in the forward curve, the Feb 2026 contract is pointing downward to 68. Most technical indicators (oscillators, moving average, and MACD) are flagging 'Sell.' If the contract drops further to 75 or breaks upwards of the 10 EMA, then the current trend could be over. For now, bears are in control.
Bloomberg
6 days ago
- Business
- Bloomberg
At 10 AM, Stock Options Soar as Retail Traders Unleash New Bots
When people talk about algorithmic traders, it evokes images of rooms full of math PhDs creating complex models that place huge trades in milliseconds after economic or earnings data is released. But now, it's retail traders who are turning in droves to automated trading, building the kind of programs in their basements more associated with Wall Street banks than the Reddit thread r/wallstreetbets. Using these systems, though, has a downside: they can result in predictable, herd-like behavior, with data from Cboe Global Markets showing trades clustered at certain times of day. There's a risk that more sophisticated market participants could exploit the predictability of small-volume traders at specific moments when retail demand for options spikes.
Globe and Mail
6 days ago
- Business
- Globe and Mail
Where Will Bitcoin Be in 10 Years?
You will struggle to find assets that have performed better than Bitcoin (CRYPTO: BTC). In the past 10 years, the top cryptocurrency has seen its price skyrocket 46,000% (as of May 27). This would have turned a $1,000 investment into a jaw-dropping $461,000 today. Investors are surely wondering what the future holds. Where will Bitcoin be in 10 years? Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Bitcoin's scarcity Bitcoin has been around for about 16 years. It has stood the test of time despite numerous price declines of more than 50%. There have been crypto exchange failures and investors have lost their coins. But it's worth mentioning that the Bitcoin network itself has never been hacked. That durability is a positive factor that should give investors confidence. The longer Bitcoin stays relevant, the lower the chance that it falls by the wayside. And over time, a higher number of market participants, whether that's individuals, institutions, or politicians, are learning about what makes Bitcoin truly special, which is its fixed supply of 21 million coins. This is in stark contrast to the ever-increasing amount of fiat currency there is in the world. The growth of the money supply in the U.S., as well as federal debt, is showing no signs of slowing down. This makes the value proposition of owning a purely digital, decentralized, and scarce asset strikingly clear. Bitcoin's network effect The great Warren Buffett once called Bitcoin "rat poison squared." His view is understandable, as the cryptocurrency doesn't generate revenue and cash flows like a typical business does, which is what Buffett wants to see. But the Oracle of Omaha appreciates companies that possess economic moats. Applying that same framework to Bitcoin would make anyone bullish. Its current market cap dwarfs any other blockchain, now at $2.1 trillion. Being the oldest and most valuable cryptocurrency means that Bitcoin has an unrivaled network effect. More users make Bitcoin more valuable to all other stakeholders. Unless a cryptocurrency is magnitudes better than Bitcoin at being a decentralized and secure store of value, there is minimal risk that a newcomer will topple it. Bitcoin's clear network effect benefits it in another very important way, which is the development of various tools that support its adoption. This includes hardware wallets, mining equipment, and an expanding ecosystem of financial services. All of this shows that Bitcoin's network effect has supported its rise up to this point. This key competitive advantage increases the chances that this digital asset will not only survive but thrive over the next decade and beyond. Bitcoin's 10-year price target I think it's always a good idea for investors to take analyst stock price targets with a grain of salt. The same is true with cryptocurrencies. That's because the future is unpredictable, and humans are terrible at making accurate predictions. However, that doesn't mean assessing what Bitcoin could be worth by 2035 is a waste of time. I actually think it's a valuable exercise to figure out what things could look like, just so investors have an idea of what the upside could be. Just don't expect Bitcoin to generate the same return during the next 10 years that it did in the past decade. As of this writing, Bitcoin trades at about $106,000, not that far off of its record high. It might seem like a bad time to put money to work near a peak. But consider that gold, which is arguably Bitcoin's most direct competitor as a global store of value, has a market value of $22.1 trillion. As the world becomes increasingly digital, I don't believe it's a stretch for Bitcoin to one day exceed the precious metal. Of course, it's anyone's guess as to the ultimate time frame for that happening. If Bitcoin has more than 10-fold upside from today's level, then it seems like a smart investment to make with a 10-year outlook. Should you invest $1,000 in Bitcoin right now? Before you buy stock in Bitcoin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor 's total average return is978% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Forbes
29-05-2025
- Business
- Forbes
Looking For Another Interest Rate Cut? See You In December
The meetings from the early May meeting of the Federal Open Market Committee — the part of the Federal Reserve that sets interest rates — were just released. They show that anyone who had held hope for rate cuts in the near future will likely have to wait until the end of the year. National economics is an area where expectations can beget results. As the minutes said, 'market participants appeared to interpret recently announced trade policy changes as a negative supply shock that could restrain domestic activity relative to foreign activity in the near term.' The market participants are large investment decision-makers. It's important to remember that the FOMC meeting was weeks ago. Whipsaw changes in tariffs, announcements about geopolitical negotiations, stocks rising and falling and rising again, a trend in falling bond prices and growing yields, a roller coaster ride of consumer confidence, and other economic signals suggest that no one at all knows where things are going. The Fed, in the voice of Chair Jerome Powell, has noted that it is facing a challenge in balancing its dual mandates of maintaining stable prices and maximum sustainable employment. The difficulty is that, in orthodox monetary theory, the two classically have separate requirements. Price stability is generally an issue of inflation, which means the economy is overheated. In that situation, the Fed would increase interest rates to slow demand by consumers and businesses by making it harder for anyone to borrow money. On the other hand, when employment starts to fall, the Fed would lower interest rates to make it easier for businesses to borrow money and expand their activities. The Fed doesn't have the breadth of tools to achieve both results simultaneously. It has to choose — and no one at the central bank knows which of the two conditions might happen. Another consideration is the evidence the Fed looks for in making its decisions: data. Economic data runs a month or more, even a quarter or two, behind the present. Additionally, data often isn't decisive. Things may move back and forth without a definitive direction. Currently, the Fed doesn't know which way conditions will break and whether prices or labor will be the segment that needs the most help, or even when that could occur. For now, they are following the data and waiting for enough of a pattern to make a decision. As the Fed put it, 'In considering the outlook for monetary policy, participants agreed that with economic growth and the labor market still solid and current monetary policy moderately restrictive, the Committee was well positioned to wait for more clarity on the outlooks for inflation and economic activity.' Oxford Economics wrote in an email that the May meeting only 'reinforced the Fed's wait-and-see approach.' They have no better idea what the administration is going to do than anyone else. More importantly, they don't know for certain what effects all this will have on the economy. The next few weeks and months are likely to be difficult. The ping pong balls keep flying back and forth over the net. A reporter asked Trump about a new term of growing popularity: TACO, or Trump Always Chickens Out. People in other countries expect that Trump will eventually back down. Perhaps that is somewhat better than not knowing what will happen, but it still means a kabuki theater of pretense that rational actors can still do what they want and make plans. The reality is being caught in a tidal pool, waiting for the next wave to break.
Bloomberg
27-05-2025
- Business
- Bloomberg
Japan's Super-Long Bond Yields Slide on Unusual MOF Move
Japan's super-long bond yields slid sharply after the finance ministry sounded out market participants on appropriate issuance amounts following a recent slump in the nation's sovereign debt. In a move that was seen as unusual because of its timing and the wide group of people contacted, the Japanese ministry sent a questionnaire to participants that also asked for comments on the current market situation, said people familiar with the situation. Bloomberg's Brian Fowler reports. (Source: Bloomberg)
