It’s Fed Hype Week

A couple tough days for the market and the headlines are reinforcing the negativity. A single (and positive) payrolls report has instigated some market noise with the theme being a potential hawkish turn by the Fed after all that effort was put in to portray a dovish Fed. You can read the headline article by clicking it.

Some negativity out of Morgan Stanley and other dour sounding things populate the headlines below the big one. The one that gets to the heart of the matter…

Could the Fed surprise the stock market by skipping a July rate cut? It’s not out of the question

Okay, so let’s see what the professionals, da boyz who is paid ta git it right, has ta say…

Da boyz still says da cut is comin’, for sure. From CME Group

What’s more, they project increasing odds of a second rate cut as the year progresses. So I ask you, who is right, people who trade the Fed Futures market for a living or those whipsawed into fretting about the Fed immediately after a jobs report takes everyone by surprise?

What is actually happening out there is a global currency war masked as a trade war. In order to effectively conduct this trade war each combatant needs to avoid a relatively strong currency. It’s a game of currency Whack-a-Mole, and the question is will Powell play ball?

whackamole

Gold in ratio to the US dollar index and major currency pairs exposes the racket. Gold/Currency is taking a necessary consolidation in line with the new headlines expressing concerns about the Fed’s actual intentions. But these daily charts are intact, although they look like they should consolidate some more in the short-term.

gold vs. currencies

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