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DAX with the help from German-French Eurobond plans soon back at 12,000 points?

DAX with the help from German-French Eurobond plans soon back at 12,000 points?

Published

4 years ago

on

Source: Economic Events Calendar May 25 – 29, 2020 - Admiral Markets' Forex Calendar


DAX30 CFD

The German DAX30 started the last week of trading with massive gains. While we pointed out in our last weekly market outlook that:

[…]we are still careful in terms of DAX30 CFD long engagements, even though short-term and technically we stay positive as long as the German index trades above 10,200 points.[…]

we did not expect gains of more than 5% into the start of the week.

The main driver wes the comments from Fed chairman Powell on CBS' "60 Minutes" and Merkel's and Macron's proposal of a 500 billion EU recovery fund that would offer grants to European Union regions and sectors hit hardest by the coronavirus pandemic.

In fact, this move moves the EU more in the direction of a transfer union and can be interpreted as bullish for Equities.

If the bullish momentum continues over the next few days and the DAX30 breaks above the April highs around 11,350 points, a re-test of the SMA(200) around 12,000/050 points is a realistic option.

If the DAX30 on the other hand fails to break higher, a re-test of the region around 10,200 points is likely, initiated by disappointing news around developments respectively missing progress in terms of a Coronavirus vaccine as last Tuesday with Moderna's vaccine trial not working as well as expected:

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Daily chart (between February 5, 2019 to May 22, 2020). Accessed: May 22, 2020, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of the DAX30 CFD increased by 9.56%, in 2016, it increased by 6.87%, in 2017, it increased by 12.51%, in 2018, it fell by 18.26%, in 2019, it increased by 26.44% meaning that after five years, it was up by 34.2%.

Check out Admiral Markets' most competitive conditions on the DAX30 CFD and start trading on the DAX30 CFD with a low 0.8 point spread offering during the main Xetra trading hours!


US Dollar

And again: when looking at the USD Index Future, the picture hasn't significantly changed over the last few days, but with the Euro about to gain momentum against the Greenback, the USD Index Future could see a sharp drop back below 100.00 points in the days to come.

Our USD scepticism was elevated again, by Fed chairman Powell's appearance on CBS' "60 Minutes" on May 17.

In fact, we see a confirmation in his remarks in front of the US congress on May 13, in which one could easily interpret that the Fed will do everything and flood markets with trillions of US dollars if necessary to avoid a collapse of the US economy.

On CBS he said that "In the long run and even in the medium run, you wouldn't want to bet against the American economy" while acknowledging that the unemployment rate could hit as high as 25%.

If we have to translate this, we'd say it means that a worsening situation in regards to the US economy should be expected, but that the Fed will deliver the fuel which is needed to keep "the engine" running.

An anticipation of this "liquidity boost" could rather sooner than later result in a sustainable drop in 10-year US Treasury yields below 0.60%, bringing the USD under pressure, probably especially against the Euro after Merkel's and Macron's 500 billion Euro EU recovery fund (further details in the Euro paragraph).

Still, technically the USD Index Future can be considered neutral between 94.00 and 104.00 points:

Source: Barchart - U.S Dollar Index - Weekly Nearest OHLC Chart (between July 2017 to May 2020). Accessed: May 22, 2020, at 10:00 PM GMT

Don't forget to register for the weekly "Trading Spotlight" webinar with presenters including Jens Klatt, every Monday, Wednesday and Friday at 2pm London time! It's your opportunity to follow Jens and others as they explore the weekly market outlook in detail, so don't miss out!


Euro

In our last weekly market outlook we wrote

[…]While the Euro presented itself stable (and choppy) against the US dollar over the last week of trading and the performance could be interpreted as quite strong after the German Constitutional Court ruling on the 05th of May, we stay sceptical for the Euro.[…]

and that

[…]the Euro (is) vulnerable to upcoming uncertainty and leaves the current yearly lows around 1.0630 and making even a significant drop lower on the table, is probably a little under-priced into the currency in our opinion.[…]

Well, the Euro-tide has turned over the last week of trading and we are now Euro bullish.

On Monday, Germany and France respectively Merkel and Macron proposed a 500 billion EU recovery fund that would offer grants to European Union regions and sectors hit hardest by the coronavirus pandemic.

In fact, one could see this as a first step towards a transfer union and is, in addition with the massive monetary stimulus from the ECB, bullish for the Euro.

Indeed, the EUR/USD gained bullish momentum and is currently eyeing the region around 1.1000 with a break higher levelling the path up to 1.1200 and probably even higher in the months to come.

This is probably especially true, since the US dollar should stay under pressure and while European yields should stay "bid", a sustainable drop in 10-year US Treasury yields below 0.60% would narrow the yield differential between EU and US bonds further, favouring gains in the EUR/USD:

Source: Admiral Markets MT5 with MT5-SE Add-on EUR/USD Daily chart (between March 25, 2019, to May 22, 2020). Accessed: May 22, 2020, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of the EUR/USD fell by 10.2%, in 2016, it fell by 3.2%, in 2017, it increased by 13.92%, 2018, it fell by 4.4%, 2019, it fell by 2.2%, meaning that after five years, it was down by 7.3%.


JPY

While the overall picture in the USD/JPY didn't change over the last week of trading, did the stable performance in US yields help the currency pair to make fresh monthly highs.

Still, the sustainability of this move should be questioned and we keep our overall bearish outlook on the currency pair.

That may be especially true after Fed chairman Powell's appearance on CBS' "60 Minutes". After his remarks in front of the US congress on May 13, he said that "In the long run and even in the medium run, you wouldn't want to bet against the American economy" while acknowledging that the unemployment rate could hit as high as 25%.

If we have to translate this, we'd say it means that a worsening situation in regards to the US economy should be expected, but that the Fed will deliver the fuel which is needed to keep "the engine" running.

An anticipation of this "liquidity boost" could rather sooner than later result in a sustainable drop in 10-year US Treasury yields below 0.60%, bringing the USD under pressure and thus drive the USD/JPY lower, too.

That in mind, a test of the region around 105.00 and even a push lower seems a realistic option in the coming days and weeks in the USD/JPY and as long as the currency pair does not recapture 109.00/50:

Source: Admiral Markets MT5 with MT5-SE Add-on USD/JPY Daily chart (between April 1, 2019, to May 22, 2020). Accessed: May 22, 2020, at 10:00pm GMT

In 2015, the value of the USD/JPY increased by 0.5%, in 2016, it fell by 2.8%, in 2017, it fell by 3.6%, in 2018, it fell by 2.7%, in 2019, it fell by 0.85%, meaning that after five years, it was down by 9.2%.


Gold

Gold stays on its bullish path, pushing to new yearly highs last week. While technically the bearish divergence in the RSI(14) on a daily time-frame is still on the table, our take for the yellow metal stays clearly bullish, and we expect a stint to the all-time high of around 1,920 USD.

While Gold bulls should stay cautious in regards to overly aggressive long engagements with the technical bearish divergence pointing to some diminishing bullish momentum, from a fundamental perspective the path higher seems levelled.

After Powell's remarks in front of the US congress on May 13, we see a confirmation of our take from this testimony that the Fed will do everything and flood markets with trillions of US dollar if necessary to avoid a collapse of the US economy, in his appearance on CBS' "60 Minutes" where he said "In the long run and even in the medium run, you wouldn't want to bet against the American economy" while acknowledging that the unemployment rate could hit as high as 25%.

That in mind and if we get to see a sustainable drop in 10-year US Treasury yields below 0.60% in the days to come leaves us with a bullish expectation and a target around 1,920, If technically as long as we trade above 1,660 USD:

Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between February 21, 2019, to May 22, 2020). Accessed: May 22, 2020, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of Gold fell by 10.4%, in 2016, it increased by 8.1%, in 2017, it increased by 13.1%, in 2018, it fell by 1.6%, in 2019, it increased by 18.9%, meaning that after five years, it was up by 28%.


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Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
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Government

Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

Published

10 hours ago

on

March 9, 2024

By

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

“When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

“It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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Government

Walmart joins Costco in sharing key pricing news

The massive retailers have both shared information that some retailers keep very close to the vest.

Published

13 hours ago

on

March 9, 2024

By

As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters. 

The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.

The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.

Related: Popular mall retailer shuts down abruptly after bankruptcy filing

It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.

You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.

Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.

However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.

Walmart has seen inflation drop in many key areas.

Image source: Joe Raedle/Getty Images

Walmart sees lower prices

McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.

During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.

"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.

He was specific about where the chain has seen prices go down.

"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."

McMillon said that in other areas prices were still up but have been falling.

"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.

Costco sees almost no inflation impact

McMillon avoided the word inflation in his comments. Costco  (COST)  Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.

The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.

"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.

Galanti made clear that inflation (and even deflation) varied by category.

"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.

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Government

Walmart has really good news for shoppers (and Joe Biden)

The giant retailer joins Costco in making a statement that has political overtones, even if that’s not the intent.

Published

14 hours ago

on

March 9, 2024

By

As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters. 

The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.

The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.

Related: Popular mall retailer shuts down abruptly after bankruptcy filing

It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.

You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.

Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.

However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.

Walmart has seen inflation drop in many key areas.

Image source: Joe Raedle/Getty Images

Walmart sees lower prices

McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.

During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.

"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.

He was specific about where the chain has seen prices go down.

"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."

McMillon said that in other areas prices were still up but have been falling.

"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.

Costco sees almost no inflation impact

McMillon avoided the word inflation in his comments. Costco  (COST)  Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.

The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.

"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.

Galanti made clear that inflation (and even deflation) varied by category.

"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.

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