Gold Takes Breather After Strong Gains

Gold prices is trading sideways in the Thursday session, after surging higher on Wednesday. Currently, the spot price for an ounce of gold is $1351.30, up 0.05% on the day. On the release front, PPI gained 0.4%, matching the forecast. Core PPI also gained 0.4%, beating the estimate of 0.2%. Both indicators rebounded after declines in the previous month. Unemployment Claims climbed to 230 thousand, just above the estimate of 229 thousand. Manufacturing data was mixed. The Empire State Manufacturing Index continues to slow down, and dropped to 13.1, missing the estimate of 17.7 points.The Philly Fed Manufacturing Index rose to 25.8, easily beating the estimate of 21.5 points. On Friday, the US releases key housing and consumer confidence numbers.

The US dollar has sagged against the major currencies, and gold has jumped on the bandwagon. On Thursday, gold jumped 1.6% on disappointing retail sales reports. Concerns of high inflation was a catalyst for the market sell-off last week, and fears of a resumption in the downward spiral are weighing on the dollar. If investors react negatively and ditch the markets yet again, safe-haven assets like gold will likely be the big winners. Gold prices were down in the first half of February, but gold has recovered these losses, after posting strong gains of 2.7% this week. US fundamentals remain solid, as the US economy is showing strong expansion, the labor market remains at capacity, and inflation levels are moving higher. This has led some analysts to attribute the recent sag in the US dollar to technical factors rather than fundamental reasons.

The new head of the Federal Reserve, Jerome Powell, received a rude welcome from the stock markets, as he started his new position last week. Powell sought to send a reassuring message on Tuesday, saying that the Fed is on alert to any risks to financial stability. However, it is clear that the Fed’s hand is limited when it comes to stock markets moves, and the volatility which we saw last week could resume at any time.Currently, the Fed is planning three hikes this year, but that could change to four or even five hikes, if inflation continues to head upwards and the robust US economy maintains its strong expansion.

 

XAU/USD Fundamentals

Thursday (February 15)

  • 8:30 US PPI. Estimate 0.4%. Actual 0.4%
  • 8:30 US Core PPI. Estimate 0.2%. Actual 0.4%
  • 8:30 US Empire State Manufacturing Index. Estimate 17.7. Actual 13.1
  • 8:30 US Philly Fed Manufacturing Index. Estimate 21.5. Actual 25.8
  • 8:30 US Unemployment Claims. Estimate 229K. Actual 230K
  • 9:15 US Capacity Utilization Rate. Estimate 78.0%. Actual 77.5%
  • 9:15 US Industrial Production. Estimate +0.2%. Actual -0.1%
  • 10:00 US NAHB Housing Market Index. Estimate 72. Actual 72
  • 10:30 US Natural Gas Storage. Estimate -193B. Actual -194B
  • 16:00 US TIC Long-Term Purchases. Estimate 50.3B

Friday (February 16)

  • 8:30 US Building Permits. Estimate 1.29M
  • 8:30 US Housing Starts. Estimate 1.23M
  • 8:30 US Import Prices. Estimate 0.6%
  • 10:00 US Preliminary UoM Consumer Sentiment. Estimate 95.4

*All release times are EST

*Key events are in bold

 

XAU/USD for Thursday, February 15, 2018

XAU/USD February 15 at 12:15 EST

Open: 1350.66 High: 1357.19 Low: 1348.61 Close: 1351.30

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1285 1307 1337 1375 1416 1433
  • XAU/USD posted slight gains in the Asian session but retracted in European trade. The pair is showing limited movement in North American trade
  • 1337 is supporting support
  • 1375 is the next resistance line
  • Current range: 1337 to 1375

Further levels in both directions:

  • Below: 1337, 1307, 1285 and 1260
  • Above: 1375, 1416 and 1433

OANDA’s Open Positions Ratio

XAU/USD ratio is showing movement towards long position. Currently, long positions have a majority (55%), indicative of trader bias towards XAU/USD breaking out and moving higher.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Peter Thiel Ditches “Intolerant” Silicon Valley For LA, May Quit Facebook Board

Peter Thiel has had it with Silicon Valley.

The popular libertarian billionaire investor is relocating his home and personal investment firms to Los Angeles from San Francisco and scaling back his involvement in the tech industry, the WSJ reported, marking a rupture between Silicon Valley and its most prominent conservative.

According to WSJ sources, Thiel has recently said tech culture has become increasingly intolerant of conservative political views since Mr. Trump’s election, an attitude he has said is intellectually and politically fraught.

As a result, after spending most of the past four decades in the Bay Area, the 50-year-old plans to permanently move into the 7,000-square foot home overlooking the Sunset Strip that he bought six years ago, a person familiar with the matter said. He also will move Thiel Capital and Thiel Foundation, two firms that oversee his investments, into new L.A. headquarters this year, the person said.

Underscoring the growing ideological polarization of the Valley, what prompted Thiel to take the drastic action was his disappointment with “what he sees as the intolerant, left-leaning politics of the San Francisco Bay Area” coupled with increasing pessimism about the prospects for tech businesses amid greater risk of regulation.

Separately, the WSJ said that Thiel also discussed the possibility of resigning from the board of Facebook: “His relationship with the social-networking company—where he has been a director since 2005, the year after its founding—came under strain after a dispute with a fellow director over Mr. Thiel’s support for Donald Trump’s presidential campaign, and a related confrontation over boardroom leaks with Chief Executive Mark Zuckerberg last summer.

Still, for now “Thiel feels he can still help the company and is likely to remain on the board at least for now.”

He may have his hands full: according to Mashable, Facebook has seen a decline in traffic in recent weeks along with millions of users leaving its platform, and is “taking rather drastic measures to win them back. Specifically, spamming the hell out of them in a most unfortunate place. “

Thiel’s involvement with Facebook has arguably been Thiel’s biggest triumph: in 2004 he invested $500,000 for a 10% stake in 2004. Today, Facebook is valued at over $500 billion and used by more than two billion people a month. Thiel has made more than $1 billion from the investment

Facebook aside, the reason why Thiel decided to cut the cord with Silicon Valley is hardly a secret:

Thiel has long stood out in Silicon Valley for his vocal libertarianism, but he drew heavy criticism from many tech-industry peers—including fellow Facebook board member Reed Hastings, CEO of Netflix Inc.—when he backed Mr. Trump’s presidential campaign and later served as an adviser on his White House transition team.

Furthermore, in 2016 Thiel’s support for Trump drew criticism within Facebook, from rank-and-file workers commenting on employee message boards to Hastings. In a 2016 email to Thiel, Hastings called his support of Mr. Trump “catastrophically bad judgment” and questioned his fitness to remain on the board, according to a copy of the message reviewed by The Wall Street Journal. The contents of the email were reported last year by the New York Times.

It is almost as if Thiel is angry that Silicon Valley is “tolerant” as long as it does not have to tolerate Trump supporters. “Silicon Valley is a one-party state,” Thiel said last month at a debate about tech and politics at Stanford University. “That’s when you get in trouble politically in our society, when you’re all in one side.”

Thiel’s concerns have been “echoed by other conservatives in tech who say they feel alienated by the industry’s broad embrace of liberal values.”

A majority of the tech workers who responded to a recent survey by Lincoln Network, an advocacy group for conservatives and libertarians in the tech sector, described the cultural norms of their workplace as liberal. More than one-third of workers who identified as conservative said the clash between their views and those of those of colleagues kept them from doing their best work.

Meanwhile, Facebook CEO, and the person many have speculated is preparing for his own presidential campaign, Mark Zuckerberg publicly deflected the criticism of Thiel, saying in March 2017 that demands for his removal were “crazy” and that “ideological diversity” had become a necessary component of diversity in the workplace and boardroom.

“Diversity” yes, as long as that “diversity” is in line with what everyone else in Silicon Valley agrees on. And that’s the problem.

* * *

So what’s next for the famous billionaire investor? According to the WSJ:

“Thiel’s new projects in L.A. will include the creation of a new media endeavor, one of the people said. Mr. Thiel sees an opportunity to build a right-leaning media outlet to foster discussion and community around conservative topics, the person said.

Thiel Capital and Thiel Foundation plan to move their dedicated staff of about 50 employees to L.A., where they will continue to oversee Mr. Thiel’s personal holdings, one of the people familiar with his thinking said. Other investment firms associated with Mr. Thiel, including Founders Fund and Mithril Capital, will remain in San Francisco, the person said.

Meanwhile, Thiel continues to sever his ties to the Valley one by one: he recently exited the boards of Zenefits and Asana, cut ties with startup incubator Y Combinator and sold off the majority of his stakes in Twilio. He still serves on the boards of several companies, including Palo Alto, Calif.-based data-mining firm Palantir Technologies Inc.

Thiel paid $11.5 million for his Los Angeles home in 2012, according to real-estate data website Property Shark. He also has a home in New Zealand, where he was granted citizenship in 2011.

Why New Zealand? Because as we have discussed in the past, and as The Guardian does today, the small Pacific nation is the “bug out” location where all of America’s billionaires plan on moving to, if a “worst case” scenario were to strike America.

The post Peter Thiel Ditches “Intolerant” Silicon Valley For LA, May Quit Facebook Board appeared first on crude-oil.news.

Things are starting to look bullish

Things are starting to look bullish

Bitcoin / Dollar BITFINEX:BTCUSD


Things are looking undeniably bullish right now, but I thought I’d chime in to point out some possible resistance areas that could halt upward movement for the time being.

First, there’s the middle of the weekly BBand, which is currently right at around $10,000. The market fell below it during the drop to $6,000 for the first time since wayyyy back in the $400s. Rising back above it would be a strong bullish sign, but we’re not there yet.

The market hit the top of the ascending channel that’s been formed by the recovery from $6,000 to $10,000. If it doesn’t break out to the upside in the near future, a drop to visit channel support around $8,800 seems likely.

RSI is fluctuating between 60 and 80 on the 1h through the 6h. In short, the market is overbought on medium timeframes, and frenzied buying is preventing RSI from settling down. While the market can remain in overbought conditions for some time, it’s generally expected that buyers will become exhausted sooner rather than later.

Moreover, A liquidity pool is just an area where price is likely to move to because there will be a lot of stops in that region. As you can see, there are a fair few near-even swing highs just below both of those zones, which is where retail traders who are currently short will have stops.

Thailand’s PTTGC lets contract for Map Ta Phut ethylene expansion

PTTGC, through contractor Samsung Engineering, has let a contract to CB&I to provide technology licensing and material supply for PTTGC’s recently approved project to expand olefins production capacity at its existing operations at Map Ta Phut Industrial Estate in Thailand’s Rayong Province, about 150 km southeast of Bangkok.

The post Thailand’s PTTGC lets contract for Map Ta Phut ethylene expansion appeared first on aroundworld24.com.

Lance Roberts: There Will Be No Economic Boom

Authored by Lance Roberts via RealInvestmentAdvice.com,

Last week, Congress passed a 2-year “continuing resolution, or C.R.,”  to keep the Government funded through the 2018 elections. While “fiscal conservatism” was just placed on the sacrificial alter to satisfy the “Re-election” Gods,” the bigger issue is the impact to the economy and, ultimately, the financial markets.

The passage of the $400 billion C.R. has an impact that few people understand. When a C.R. is passed it keeps Government spending at the same previous baseline PLUS an 8% increase. The recent C.R. just added $200 billion per year to that baseline. This means over the next decade, the C.R. will add $2 Trillion in spending to the Federal budget. Then add to that any other spending approved such as the proposed $200 billion for an infrastructure spending bill, money for DACA/Immigration reform, or a whole host of other social welfare programs that will require additional funding.

But that is only half the problem. The recent passage of tax reform will trim roughly $2 Trillion from revenues over the next decade as well.

This is easy math.

Cut $2 trillion in revenue, add $2 trillion in spending, and you create a $4 trillion dollar gap in the budget. Of course, that is $4 Trillion in addition to the current run rate in spending which continues the current acceleration of the “debt problem.”

But it gets worse.

As Oxford Economics reported via Zerohedge:

The tax cuts passed late last year, combined with the spending bill Congress passed last week, will push deficits sharply higher. Furthermore, Trump’s own budget anticipates that US debt will hit $30 trillion by 2028: an increase of $10 trillion.”

Oxford is right. In order to “pay for” all of the proposed spending, at a time when the government will receive less revenue in the form of tax collections, the difference will be funded through debt issuance.

Simon Black recently penned an interesting note on this:

“Less than two weeks ago, the United States Department of Treasury very quietly released its own internal projections for the federal government’s budget deficits over the next several years. And the numbers are pretty gruesome.

In order to plug the gaps from its soaring deficits, the Treasury Department expects to borrow nearly $1 trillion this fiscal year. Then nearly $1.1 trillion next fiscal year. And up to $1.3 trillion the year after that.

This means that the national debt will exceed $25 trillion by September 30, 2020.”

You can project the run rate quite easily, and it isn’t pretty.

Of course, “fiscal responsibility” left Washington a long time ago, so, what’s another $10 Trillion at this point? 

While this issue is not lost on a vast majority of Americans that “choose” to pay attention, it has been quickly dismissed by much of the mainstream media, and Congressman running for re-election, by suggesting tax reform will significantly boost economic growth over the next decade. The general statement has been:

“By passing much-needed tax reform, we will finally unleash the economic growth engine which will more than pay for these tax cuts in the future.”

Don’t dismiss the importance of $25-30 Trillion in U.S. debt. It is larger than the debts of every other nation in the world – combined.

Congress Killed The Economic Boom

While it truly is a great “talking point,” the reality is it just isn’t true.

As I have shown previously, there is absolutely NO historical evidence that cutting taxes, without offsetting cuts to spending, leads to stronger economic growth.

Even Congressman Kevin Brady, Chairman of the House Ways and Means Committee, confirmed the same.

Deficits, and deficit spending, are HIGHLY destructive to economic growth as it directly impacts gross receipts and saved capital equally. Like cancer – running deficits, along with continued deficit spending, continues to destroy saved capital and damages capital formation

Debt is, by its very nature, a cancer on economic growth. As debt levels rise it consumes more capital by diverting it from productive investments into debt service. As debt levels spread through the system it consumes greater amounts of capital until it eventually kills the host. The chart below shows the rise of federal debt and its impact on economic growth.

The reality is that the majority of the aggregate growth in the economy since 1980 has been financed by deficit spending, credit creation and a reduction in savings. This reduced productive investment in the economy and the output of the economy slowed. As the economy slowed, and wages fell, the consumer was forced to take on more leverage to maintain their standard of living which in turn decreased savings. As a result of the increased leverage more of their income was needed to service the debt – and with that, the “debt cancer” engulfed the system.

The Austrian business cycle theory attempts to explain business cycles through a set of ideas. The theory views business cycles:

As the inevitable consequence of excessive growth in bank credit, exacerbated by inherently damaging and ineffective central bank policies, which cause interest rates to remain too low for too long, resulting in excessive credit creation, speculative economic bubbles and lowered savings.”

The problem that is yet not recognized by the current Administration and mainstream economists is that the excessive deficits and exponential credit creation can no longer be sustained. The process of a “credit contraction” will eventually occur over a long period of time as consumers and governments are ultimately forced to deal with the deficits.

The good news is the process of “clearing” the market will eventually allow resources to be reallocated back towards more efficient uses and the economy will begin to grow again at more sustainable and organic rates.

Today, however, expectations of a return to economic growth rates of the past are most likely just a fairy tale. The past 9-years of stock market returns have been fueled by trillions of dollars of support and direct injections into the financial system – that support is not sustainable in the long run. While the injections have kept the economy from falling into a depression in the short term – the unwinding of that support will suppress economic growth for many years to come.

There is no way to achieve the necessary goals “pain-free.”  The time to implement austerity measures is when the economy is running a budget surplus and is close to full employment. That time was two Administrations ago when the economy would have slowed but could have absorbed and adjusted to the restrictive measures. However, when things are good, no one wants to “fix what isn’t broken”. The problem today is that with a high dependency on government support, high levels of underemployment and rising budget deficits, the implementation of austerity measures will only deter future economic growth, which is dependent on the very things that need to be “fixed”.

The processes that fueled the economic growth over the last 30 years are now beginning to run in reverse, and when combined with the demographic shifts in the U.S., the impact could be far more immediate and prolonged than the media, economists, and analysts are currently expecting. Sacrifices will have to be made, the economy will drag on at subpar rates of growth, individuals will be working far longer into their retirement years and the next generation of Americans will lead a far different life than what the currently retiring generation enjoyed.

It is simply a function of the math.

The post Lance Roberts: There Will Be No Economic Boom appeared first on crude-oil.news.

Gazprom Neft lets contract for Omsk refinery delayed coker

Gazprom Neft has let a contract to Maire Tecnimont subsidiaries for work related to a project designed to expand delayed coking capacity at its 21.4 million-tonne/year Omsk refinery in Western Siberia as part of the operator’s ongoing modernization program to reduce environmental impacts and improve processing capacities, conversion rates, energy efficiency, and production qualities at the site. 

The post Gazprom Neft lets contract for Omsk refinery delayed coker appeared first on aroundworld24.com.

Nomura: Here’s Why “You’re Gonna Have Another Chance To Buy Lower” Soon

By Charlie McElligott, MD at Nomura Cross-Asset Strategy

Hints Of Transition To “Late Cycle”/”Pre-Recession” As Key Levels Hold

SUMMARY:

  • Rates flows showing no urgency to cover from shorts / no urgency to ‘dip toes’ from real money/little-to-no gamma- or convexity-hedging = still room for USTs to go lower
  • Yet 3.2% in 30Y UST yields holds early—a reversal LOWER in rates would skewer much cross-asset thematic positioning
  • Equities rallied on “still easier” financial conditions with flattish “real rates” and MUCH weaker USD
  • However, an early test of 2720 “congestion” / resistance in ES1 has failed
  • SPX and Volatility analogs tell similar story: re-test of equities lows is likely coming, followed by a rally looking-out on 3m / 6m basis
  • “Late-cycle” indications from the CPI ‘particulars’—alongside rising yields—are the “playbook” for weaker US Dollar from here
  • Typical “late-cycle” / “pre-recession” behavior would tell investors to avoid expensive stocks as “Value” outperformspotentially meaningful confirmation of where the economy stands

COMMENTARY:

First—a few levels of note worth reiterating: 2720 in SPX and 3.20 in UST 30Y yield, both of which have ‘held’ so far this morning.

Regarding yesterday’s selloff in USTs, comments from our Rates team were extremely telling from the positioning perspective, in that there was very little “stress.”  My outstanding colleague Darren Shames noted that the shorts were in no rush to cover, communicating high conviction that yields still have more room to move higher.  Real Money simply wasn’t there, feeling like there is still more move to shake out / better entry-points, potentially eying that ~3.20% level in the 30Y that has held since 2014.  Darren too mentions that convexity hedgers were present to a certain extent, but by no means forcing the flows—even at the worst levels of the day.  When viewing that alongside his observation that dealer gamma hedging flows too were negligible, it indicates that the “sellers are lower” supply still has yet to be seen (although notable that ~7k futs traded overnight as yesterday’s 120-08 low in TYH8 was breached—looks like a “stop loss”). 


Source: Bloomberg

As previously stated, it’s the move in “real rates” that risk traders need to keep an eye on.  My yesterday afternoon piece focused on this, because despite the move in nominal yields, the “gap” move in inflation expectations (thus the widening in breakevens) actually kept “real rates” stable on the day.  This in turn provided relief from the recent equities-theme of the negative impact of “tighter financial conditions.”


Source: Bloomberg

However, I REALLY think that it was the USD breakdown which provided the most relief for US equities.  The Bloomberg Dollar Spot index sits on the cusp of breaking-down to a new 3.5 year lows with a frightening amount of room to fall (no support til 1065—the 76.4% retracement of the 5 year BBDXY rally—which is another -4.5% move).  

What drove this next leg lower in the “short USD trade,” especially after the better inflation print?  Well…outside of the Retail Sales clunker, it’s a larger view of what the particulars of the inflation report said about the status of where the US economic cycle is (hint: late-stages). 

Essentially, the pace of the inflation running at a 2.9% annualized rate over the past three months (strongest since ’11) is a “tell,” while too seeing previously-lagging sectors like “medicare costs” finally pivot-higher speaks to this turn in “late-stage-cyclicality.”  So as we move a “new world” of higher-rates in conjunction with “end of cycle,” this is a potent cocktail for a major beatdown in the prospects for the US Dollar from here.


Source: Bloomberg

So as it pertains to stocks then, a few points:

Big picture and as previously referenced, SPX is now in that “congestion zone,” and earlier this morning touched—and failed—at that 2720 resistance I noted.  Today’s flows / opening print might indeed chase it back up, but I’ll be watching to see how much institutional “follow-through” there is here, as I continue to see potential for a fade

Anthony Antonucci has run a number of evolving “market shock” analogs (TWO -3.5 SD ‘down’ moves followed by a +2 SD move ‘up’) and, on average, the market re-tests lows within a month.  From there however, we form a “tradeable-bottom” and travel higher on a 3 month basis. The sample-set isn’t terrible either—7 examples—1946, 1966, 1970, 1973, 1987, 2011 and 2015.  Anthony also notes that …the highest correlation to this current period on SPX returns is Aug11 2015 and yes we rallied for next day or 2 (2739) and chop and a few weeks later we test the lows and rip again.” 

Source: Nomura

Volatility also tells a similar “sequencing” story in that “volatility spike and reset” analog looks similar to the “chop then higher” story.  Looking at the VXO (the OEX VIX which has a longer history), we looked at scenarios when the index trades above 30 then sells off more than 50% as the market rallies and vol comes in.

Similar gig:


Source: Nomura

The message here from these analogs? 

That I think you’re gonna have another chance to buy stuff lower, before another rally off the back of a “tradeable bottom”…and more importantly, that higher volatility / “chop” is “here to stay.”

* * *

Thematically as it relates to the “late-cycle” commentary above, it was notable to see “high beta” / “cyclical beta” to perform the way they did (e.g. a basket of ‘beta energy’ closed +4.2% on day; ‘high beta’ basket was +2.8%; leveraged balance-sheet +2.4% / high default risk +2.3%).  Generally-speaking, you’d expect to see “Value” again start working in a “late-cycle” / “pre-recession” backdrop (acknowledging of course that this “pre-recession backdrop” classification will be viewed as controversial–but by the NBER economic cycle “definition,” it’s the phase which follows “pure expansion”).    The trick or “issue” however is that this stuff has been a lot of the underweight or short in the market. 

A study by O’Shaughnessy Asset Management on factor performance over the business cycle notes the underperformance of ‘expensive’ stocks versus ‘cheap’ ones in the late-cycle phase, aka “Value” factor market-neutral performance:

“Striking in the Pre-Recession periods is the strong high-low spread for Value of 17.8 percent, which suggests that investors shun expensive stocks when economic growth is in question. In fact, across the various regimes in our study, the low Value (expensive) decile excess return of -12.4 percent is the lowest. The trend of expensive stocks underperforming starts well in advance of an official recession and extends through the early recovery Post-Recession regime.Not only do these stocks deliver poor excess and absolute return, they tend to exhibit extreme volatility. While high Value (cheap) stocks had a standard deviation of just 14.8 percent annualized, low Value (expensive) stocks had a standard deviation of 30.3 percent.”

 

Thus, I’m watching “Value” performance as closely as ever—either as another “false dawn” or as an indication that investors are beginning to transition into “late-cycle” / “pre-recession” positioning.

The post Nomura: Here’s Why “You’re Gonna Have Another Chance To Buy Lower” Soon appeared first on crude-oil.news.

GBP/USD – Pound Higher as Sentiment Remains Negative on Greenback

The British pound continues to head higher this week. In North American trade, GBP/USD is trading at 1.4067, up 0.48% on the day. On the release front, there are no British events on the schedule. In the US, PPI gained 0.4%, matching the forecast. Core PPI also gained 0.4%, beating the estimate of 0.2%. Both indicators rebounded after declines in the previous month. Unemployment Claims climbed to 230 thousand, just above the estimate of 229 thousand. On Friday, the US releases key housing and consumer confidence numbers. The UK will release Retail Sales.

The pound has posted winning sessions every day this week, and has continued the upward trend on Thursday. GBP/USD has gained 1.7% this week, and punched above the 1.41 line earlier on Thursday. The pound posted strong gains on Wednesday, as US consumer spending reports were weaker than expected. Still, US fundamentals remain solid, as the US economy is showing strong expansion, the labor market remains at capacity, and inflation levels are moving higher. This has led some analysts to attribute the recent sag in the US dollar to technical factors rather than fundamental reasons.

With US inflation indicators pointing higher in January, the Fed will be reevaluating its projection for rate hikes in 2018. Currently, the Fed is planning three hikes this year, but that could change to four, or even five hikes, if inflation continues to head upwards and the robust US economy maintains its strong expansion.  The new head of the Federal Reserve, Jerome Powell, received a rude welcome from the stock markets, as he started his new position last week. Powell sought to send a reassuring message on Tuesday, saying that the Fed is on alert to any risks to financial stability. However, it is clear that the Fed’s hand is limited when it comes to stock markets moves, and the volatility which we saw last week could resume at any time.

GBP/USD Fundamentals

Thursday (February 15)

  • 8:30 US PPI. Estimate 0.4%. Actual 0.4%
  • 8:30 US Core PPI. Estimate 0.2%. Actual 0.4%
  • 8:30 US Empire State Manufacturing Index. Estimate 17.7. Actual 13.1
  • 8:30 US Philly Fed Manufacturing Index. Estimate 21.5. Actual 25.8
  • 8:30 US Unemployment Claims. Estimate 229K. Actual 230K
  • 9:15 US Capacity Utilization Rate. Estimate 78.0%. Actual 77.5%
  • 9:15 US Industrial Production. Estimate +0.2%. Actual -0.1%
  • 10:00 US NAHB Housing Market Index. Estimate 72. Actual 72
  • 10:30 US Natural Gas Storage. Estimate -193B. Actual -194B
  • 16:00 US TIC Long-Term Purchases. Estimate 50.3B

Friday (February 16)

  • 4:30 British Retail Sales. Estimate 0.5%
  • 8:30 US Building Permits. Estimate 1.29M
  • 8:30 US Housing Starts. Estimate 1.23M
  • 8:30 US Import Prices. Estimate 0.6%
  • 10:00 US Preliminary UoM Consumer Sentiment. Estimate 95.4

*All release times are GMT

*Key events are in bold

GBP/USD for Thursday, February 15, 2018

GBP/USD February 15 at 11:30 EDT

Open: 1.3999 High: 1.4100 Low: 1.3995 Close: 1.4067

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3809 1.3901 1.4010 1.4128 1.4271 1.4345

GBP/USD continues to break through resistance levels. On Thursday, GBP/USD inched higher in the Asian session. In European trade, the pair posted considerable gains. GBP/USD edged higher in North American trade but has given up these gains

  • 1.4010 is providing support
  • 1.4128 is the next line of resistance

Current range: 1.4010 to 1.4128

Further levels in both directions:

  • Below: 1.4010, 1.3901, 1.3809 and 1.3744
  • Above: 1.4128,, 1.4271 and 1.4345

OANDA’s Open Positions Ratio

GBP/USD ratio is showing gains in long positions. Currently, short and long positions are evenly split, indicative of a lack of trader bias as to what direction GBP/USD will take next.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.