David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Trade Angst Sinks Metals and Miners as Gold Sags Most in a Month

    This article by Susanne Barton for Bloomberg may be of interest to subscribers. Here is a section:

    The stronger dollar and speculation that a trade war will hamper demand fueled a drop in raw materials, with the Bloomberg Commodity Index declining for a second straight day. Federal Reserve Chairman Jerome Powell said this week that trade is a “risk” to the outlook, and that concerns about changes in trade policy are rising even if the impacts aren’t yet seen in economic numbers.

    The tariffs mean China “won’t be importing as much of the base metals,” said Peter Thomas, a senior vice president at Chicago-based metals broker Zaner Group. “As these tariffs take affect, we’ll see less consumption from each side until it gets settled. It started with base metals and it’s pulling on gold.” China is the biggest consumer of industrial metals.

    Gold futures for August delivery fell 1.6 percent to $1,292.20 an ounce at 10:14 a.m. on the Comex in New York, on course for the biggest decline since May 15.

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    Fund That Profited From Turkey Rout Sees Aussie Dollar Slump

    This article by Matthew Burgess and Ruth Carson for Bloomberg may be of interest to subscribers. Here is a section:

    A Sydney-based fund manager that profited from the selloff in Turkey’s bonds and currency last month now expects a slump closer to home, as a stronger greenback weighs on the Australian dollar.

    The Aussie may fall more than 10 percent to the “mid-60s” U.S. cents in 12 months, said Vimal Gor, head of income and fixed interest at Pendal Group, at a conference Thursday. A hawkish Federal Reserve will continue raising rates “until something breaks,” while its Australian counterpart stands pat, he said.

    “The U.S. is the only country that’s genuinely hiking rates, so the interest-rate differential story is giving a huge tailwind to the dollar,” Tim Hext, a Sydney-based portfolio manager in Gor’s team, said separately by telephone.

    Pendal’s view follows the Reserve Bank of Australia’s decision to keep interest rates at a record low 1.5 percent last week after a key unemployment metric edged higher. RBA governor Philip Lowe once again highlighted concern over the outlook for household consumption amid sluggish wages growth and high debt.

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    Email of the day on moving average calculations

    Good afternoon, I am a long-time subscriber to your wonderful website and just have a question regarding the chart library. 

    I was looking at the moving averages on daily, weekly and monthly charts in your library, and noticed that when comparing to other chart terminals like Bloomberg or sites such as StockCharts, the MA values for weekly and monthly charts don't appear to match despite the same values being inputted. As an example, I attach the weekly charts for S&P500 with the MA values of 34, 89 and 200. Interestingly, the daily charts do have MAs matching.

    I was wondering what would be the cause of this discrepancy, perhaps a different formula or method for calculating the MA? I like the way that your chart library appears to calculate the MAs, so if this is indeed the case, is there a way to use the same method for calculating the MA on, say, a Bloomberg terminal? 

    Thank you in advance and I look forward to hearing from you.

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    Draghi Ends ECB Bond-Buying Era Saying Economy Can Beat Risks

    This article by Piotr Skolimowski for Bloomberg may be of interest to subscribers. Here is a section:

    Mario Draghi said the euro-area economy is strong enough to overcome increased risk, justifying the European Central Bank’s decision to halt bond purchases and end an extraordinary chapter in the decade-long struggle with financial crises and recession.

    Policy makers agreed to phase out the stimulus tool with 15 billion euros ($17.7 billion) of purchases in each of the final three months of the year, the ECB president said after his Governing Council met on Thursday in Latvia. The central bank also pledged to keep interest rates unchanged at current record lows at least through the summer of 2019.

    In doing so, officials bet that the euro-area economy is robust enough to ride out an apparent slowdown amid risks including U.S. trade tariffs and nervousness that Italy’s populist government will spark another financial crisis. Almost half of economists in a Bloomberg survey had predicted the announcement would be put off until July.

    “We’ve taken these decisions knowing that the economy is in a better situation, with an increase in uncertainty,” Draghi said at a briefing in Riga, where the Frankfurt-based ECB held its annual out-of-town meeting. “We may well have this soft patch being somewhat longer than in the staff projections in some countries.”

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