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Oil between $50 and $75 suits everyone

Over the past four days, US crude oil fell nearly 10 percent of the cyclical peak $73 a barrel, reaching yesterday low at $65. This poses the question - has the downward correction of the raw material been exhausted and can it start rising again?
The sharp decline in oil became a reality as a result of the data that Saudi Arabia and Russia are considering increasing production. Both parties signaled some increase in their production.
It is the trade between Russia and OPEC in the past year to curb production, triggering a strong rise in raw material prices.
Experts, however, comment that the potential resistance of some OPEC members against Saudi Arabia and Russia's decision to boost production could lead to a certain return in the price of oil.
After the peak of 115 dollars in 2011, oil was traded in a range between 115 and 75 dollars for 30 months. Such developments would mean oil price rate in the range of between $70 and $50 over the next few years. And that would perfectly suit Russia and Saudi Arabia, according to market observers.
Any oil levels above this range are already leading to some problems for consumers related to inflation, as well as an upsurge in US oil production, which is becoming profitable.
So, it seems very likely that the price of oil will be kept in a relatively narrow range over the coming years.
There are, of course, some analysts who believe that the price of oil will continue to rise and may go beyond that limit. Some of them are experts from Goldman Sachs, according to which there is an essential background for growth in the price of oil.

Italian banks have led the downturn in Europe

Italian banks have led the fall of European financial companies downwards as a result of growing fears of new elections in the country that could boost the position of major populist parties in the country.
The decline was driven by the shares of Banca Monte dei Paschi di Siena SpA, the volatile government-backed bank whose shares lost 7.8% of its value.
Seven of the eight worst-performing stocks in the Bloomberg Europe Banks Index were at European banks. The shares of the largest Italian bank - UniCredit SpA, lost nearly 5% of its value.
Meanwhile, the decline in Italian banking stocks has triggered the deletion of the growth of FTSE MIB Italian index since the beginning of the year.
New political choices, coupled with growing consensus opinions among populists, seriously frighten investors, according Gabriela Pinosa, head of Go-spa Consulting, a Milan-based consulting company quoted by Bloombaerg.
The victory of Euro-skeptics may lead to a gradual withdrawal of Italy from the eurozone and a potential debt write-off. And this can be extremely negative for the euro.
Interest rates on 10-year Italian bonds rose yesterday to over 2.6%, which was their highest level in nearly four years.
The fall in Italian bond prices has occurred after populist leader Mateo Salvini said it does not make much sense for Italy to remain within the EU unless the Union rewrote its rules.
The political situation seems extremely unfavorable for Italian bonds and debt holders because of the future unpredictability of vague Italian leaders.

Oil loses more than $4 on Friday, continues to go down

The price of oil continued with its exceptionally strong depreciation on Friday and the first day of the new week. Brent futures with delivery next month lost $1.1, or 1.4% on Friday's closing level.
US crude oil fell by 1.57 dollars, or 2.3% on Friday's closing level.
Brent and US oil fell respectively by 6.4 and 9 percent of its peak in early May. In China, oil fell 4.5 percent to 459 yuan a barrel (71.83 dollars a barrel).
The rise in oil prices in recent weeks has sparked serious debates among market participants and OPEC members about the impact of oil prices on the world economy, according Chittag Ay, chief economist at Morgan Stanley.
On Friday, Saudi Arabia and Russia, which are considered to be drivers of the oil market, said some oil production growth of 1 million barrels per day was under discussion.
Production cuts were the factor that led to substantial oil prices on international markets.
With the price rise, however, the US producer of US oil is also growing, benefiting from the high oil price.
Oil prices have collapsed after reports that Saudi Arabia and Russia have agreed to increase their production in the second half of the year, ANZ said.
US energy companies have added 15 new field deposits for the week to May 25.

May seems to be the best 5-th month for US markets for 9 years

You've probably heard the Wall Street rule - "Sell in May and relax." Well, it turns out that this rule does not apply, at least this year.
Indeed, US indices are moving to their best performance for nine years, after rising 2.8% since the beginning of the month. The blue chip index Dow Jones Industrial is also heading for its best performance since May 2009, according to FactSet.
In May 2009, the index added 5.3% to its value. Since the beginning of the fifth month of this year, the indicator has brought 4.1% return to investors.
The Nasdaq Composite Index is the best-performing US index this month, with a return of 5.2% since the beginning of the month. Better was its performance in May 2005, when it rose by 7.63%.
Investors' eyes will now be on trade data, US GDP growth, and employment and unemployment figures in the US for the past month, which will most likely predict the direction of the market next month.

USD/CAD: technical view for 05/25/18

The pair is trading near the upper limit of the range 1.2750-1.2900 against the background of correction of prices for crude oil. If oil quotes continue to decline, then the pair may continue local upward movement.
Technical picture:
The price is located above the lower line of the boundaries of the Bollinger bands, below EMA 5 and EMA 13. RSI is above the level of 50% and moves horizontally. Stochastics are neutral. MACD is above the zero mark and is growing. Indicators do not confirm each other.
Trading recommendations:
If the pair overcomes the 1.2900 mark, we should expect its local growth to 1.2970.

OPEC prepares markets for changing quotas

At the auction on Thursday Brent crude oil fell by more than 1% after once again did not dare to challenge the level of 80. In general, quotes remain high and continue to feed by the subject of sanctions, but the market is beginning to form fears of another kind that can put the end of the recent rally.
Before the semi-annual OPEC + summit in Vienna, a little less than a month remains, and exporters need to prepare the markets in advance for possible scenarios, so as not to shock investors and avoid sharp fluctuations in prices. It seems that this preparation is just beginning. By the way, according to rumors, all key producers of the Middle East support the weakening of quotas.
As this development, we can see a way out of long positions on Brent in a wave of profit-taking at still attractive levels for sale. Moreover, the downside risks will increase, if, for example, there are fears that Iran will be able to compensate losses from US sanctions at the expense of deliveries to the EU.
From a technical point of view, the probability of a downward breakout is now higher than the chance of a return above 80. Accordingly, the level 78 may be at risk, the loss of which will signal a further elimination of the longs. The catalyst for this movement may be the current report of Baker Hughes, if it indicates the resumption of the growth in the number of drilling in the US.

Pound is in no hurry to recover

European currencies are making new attempts to recover within the bearish trend, but the momentum remains limited. Euro slightly moved away from the fresh lows of the year under the 1.17 mark, but on approach to the 100-hour moving average consolidated slightly above the opening level.
The pound received a good push to accelerate the bullish pulse, but could not use it fully. Retail sales in Britain were much better than forecasts in April. The indicator in monthly terms jumped 1.6% after a decrease of 1.1% against expectations of a recovery of 0.7%. Sales excluding fuel also recovered, showing an increase of 1.3% after a 0.5% decrease in volumes in March.
GBP/USD tried to grow in response to the release, but just like the euro, it ran into a 100-hour moving average in the 1.3420 area and fell back under the psychological mark. The pair must close above 1.34 to confirm the weakening of short-term pressure.
The reaction of quotations speaks not only of the restraint of buyers in the market, where the dollar continues to trade within the uptrend, but also that the restoration of retail sales did not affect the expectations of players regarding the future policy of the Bank of England. In addition, the April data players regard as obsolete - the response to fresh releases promises to be more lively.
In the short term, the pound is unlikely to develop the momentum of growth and is likely to continue to attract sales on growth attempts. The nearest important resistance is in the area of ​​1.3460.

The minutes of the FOMC meeting knocked down the pair USD/JPY, the yield in the US falls

The consequences of yesterday's publication of the minutes of the meeting of the Federal Committee for open market operations differed slightly from the official statement of the FOMC at a meeting in early May. Then the Fed spoke of "symmetry" to describe the goal of inflation. This was probably regarded as an unwillingness to intimidate the market, because it could calculate that the Fed will react too energetically to further inflation growth, because the inflation target of 2.0% is already looming on the horizon.
This time (in any case, judging by the reaction of profitability in the US and the increase in expectations about the Fed's rate hikes), the tone of the protocol was more "dovish", since the Fed apparently agrees to "suffer" a high inflation rate of 2% "long" time, before raising rates further.
The conclusion is that the US central bank seems to be strongly inclined to not cut the recovery period and make sure that inflation remains within the target range.
The very sharp reaction of the US yield in the form of its decline was just as muffled, but this does not apply to the pair USD/JPY, which experienced a new and strong sell-off wave at night, which caused the pair to fall to new local lows and to a level below 110.00. Judging by the dynamics, the level of 110.00 for the pair USD/JPY is too much, and the currency pair could fully rise to high levels if the yield in the USA was also high now.

Gold may strengthening

Quotes of gold traded quite actively in the course of trading on Tuesday, but at the end of the day almost did not change compared to the opening price of the session at around 1292 dollars per troy ounce.
For the gold market, it is very important that the price seems to be fixed below the support level of $1,300 per ounce. A record increase in the yield of US bonds over the past seven years and the strengthening of the dollar index to a five-month high continue to exert strong pressure on gold quotes. In addition, there are a strong US stock market, as well as expectations for further tightening of monetary policy in the US. Some investors expect three more interest rate hikes this year. The first of these should take place at the next Fed meeting in June, and according to some forecasts, the probability of this event is almost 100%.
Another factor testifying to the strengthening of gold remains a possible truce between China and the United States regarding possible trade wars. However, the geopolitical component still remains a factor of gold support, thanks to the possible introduction of US sanctions against Iran and Venezuela, after Nicolas Maduro was elected for a president for another term.

John Paulson and Ray Dalio believe in gold

Billionaire investor and hedge fund manager John Paulson, as well as Ray Dalio, founder of the world's largest hedge fund, remain faithful to gold. Even in the light of the yesterday's decline in the noble metal and the expectations for an accelerated rise in interest rates by the Fed.
As of March 31, the New York based Paulson Fund - Paulson & Co. has had 4.32 million shares in the largest stock-exchange SPDR Gold Shares. This, compared with 4.36 million shares of the fund in December.
Meanwhile, the Bridgewater Associates Fund also retains its stake in SPDR and iShares Gold Trust, the second largest gold-based index fund.
Gold appreciated by 1.7% in the first three months of this year, after the dollar fell for the fifth consecutive quarter. This helps the metals withstand the downward pressure on the Fed's interest rate hike.
In March, Paulson's gold fund, as well as its other funds, began to return capital to investors after their assets were down $9 billion from $38 billion in 2011.
Otherwise yesterday, gold marked a significant decline, returning below the psychological limit of $1,300 per ounce. Early this morning, the spot price of gold is at levels of about $1,294 per ounce.

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US indices started correction down

Trading on US stock exchanges began with a decline in major indices on Tuesday, which recently lost 0.6-0.8%. Investors fixed their profit after several days of growth, as well as against the background of the excess of the yield of 10-year treasury bonds by 3%. Statistics at the same time showed a slowdown in growth in retail sales in April from 0.8% to 0.3%, as expected. The increase in the indicator for March was revised from 0.6%. Production reserves in March did not change (it was expected + 0.1%).
The S & P500 index rebounded down from the resistance of 2750 points, which was raised the day before. If the indicator does not manage to return to 2720 points at the end of the day, the probability of accelerating the fall in the Bollinger average area of ​​the daily chart (2680 points) will increase.
European index EuroStoxx 50 by the end of the day fell by less than 0.1%.

Misalignment of raw materials, despite the weaker dollar

Despite the weaker dollar, commodities denominated in the US currency ended last week in a mixed fashion as investors narrowed their positions in gold and oil on the last day of the week.
Copper finished slightly on Friday in positive territory due to the weakness of the US dollar. A sharp drop in the price of aluminum has limited the growth of copper.
July's copper futures ended at 3.1115, or woth an increase of 0.05%. The price was supported in the past week by declining copper stocks, which, according to technical analysts, could take the price to 3.1215.
Gold closed slightly down on Friday, but still managed to record its first weekly increase of four weeks. The metal market was backed last week by the dollar depreciation and lower interest rates on US government bonds.
Among the investors, there is speculation that the Fed will not be as aggressive in its policy of raising interest rates.
Gold futures with delivery in June lost $1.6, or 0.12% to $1 320.7 per ounce.
The announcement of a meeting between the United States and North Korea, which will take place in Singapore, also leads to a reduction in geopolitical tensions and, accordingly, weighs on the price of gold.
Meanwhile, the price of oil has fallen from its highest levels for the past three and a half years, but continues to trade relatively close to them. US crude oil fell 0.63 cents, or 0.9%, while brent fell by 0.35 cents, or 0.45%.

A drastic decline of altcoins on Friday

Heavy week for the bitcoin and the other cryptocurrencies. The heaviest, however, was the last day of last week for the altcoins.
Bitcoin Gold, for example, lost 15% of its value, pointing to the psychological limit of $50. Many analysts believe that the depreciation of the cryptocurrency may continue to the next psychological level of 40 dollars per coin.
The latter level has proved to be a key level of support, and started the last rally.
The dash also overcome the psychological support level of $400 on Friday, and the cryptocurrency seems to have fallen further down to 350 dollars. Experts believe that the $420 level is a serious resistance and could limit the price of the digital coin.
The monero also experienced severe times on Friday, moving below the $200 psychological limit.
Otherwise, the ripple declined substantially, falling over the past week by over 20% and closing the week at 0.69 cents. Litecoin also fell seriously - to a level of 139 dollars per coin on the last day of the week.
The second largest cryptocurrency - the ethereum, ended at a level of 690 dollars per coin.
Otherwise, the bitcoin led the fall of the cryptocurrencies after dropping below the $9,000 psychological limit, where it traded for most of last week. On Friday, the bitcoin ended at $8,500 for a coin.

Oil with a strong downturn before Trump-Iran

Oil prices plunged 4% yesterday after media reported that Trump would most likely withdraw from the Iranian deal with the nuclear program.
The question now is how quickly Trump sanctions will be imposed on Iran and whether this will meet market expectations.
According to a report by The New York Times, President Trump has told French President Emanuel Macron that he will restore sanctions to Iran and will impose additional economic sanctions.
Macron has denied this information, quoted by Reuters.
Oil prices will continue to be extremely volatile and to be influenced by news related to Washington-Iran relations.
The Brent lost 2.3 percent of its value to $74.42 a barrel, while US crude futures fell 2.8 percent to $68.73 a barrel.

Hedge funds have beaten the market for the first time in 10 years

Hedge funds reported a 0.4 percent gain from the beginning of the year to April, beating the broad US index S&P 500, which lost 0.4 percent over the same period.
Increased volatility, along with the rise in energy prices, as well as well-traded bond bets, have been the basis for better industry performance, comment market observers.
This is the first time in nearly a decade, when hedge funds beat the broad US index. For the first four months, the S&P 500 index recorded a decline of 0.38%.
The sectors with the best performance since the beginning of the year were from the health and technology. They have brought a 4.54% yield, while fixed income betting strategies have yielded a net return on hedge funds of 3.12% from the beginning of the year to April.
In April, the most performing sectors were the energy sector and the base materials sector, with a growth of 4.46%.
The rise in oil and other commodity raw materials contributed to the good performance of the energy sector, which registered a growth of 1.5, as well as of the basic materials sector by 2.3%.
Cryptocurrencies also contributed to the strong performance of hedge funds. The tracking blockchain technology index declined by 19.3% since the beginning of the year, but only in April added 47.1% to its value.

Gold interrupted its three-day growth

Gold fell yesterday, interrupting its three-day growth after the dollar index returned to its highest levels since 2018. Poor employment data in the US has done little to change the direction of the dollar to strong growth.
We can not fail to note that the reason for the strong dollar is largely rooted in the weakness of other currencies. After extremely bad data on the growth of the British economy, the results of low inflation in the euro area have also become reality.
Or at the moment, investors are on the subject where the data is weaker. And the US economy looks far stronger than others, even in the light of a rise in interest rates and expected new Fed actions.
The spot price of gold fell 0.1 percent to $1,313 per ounce after the metal reached its highest level since April 30 at $1,318.85 per ounce. Gold futures with delivery in June declined by 0.1% to $1,314 per ounce.

Dimon: Get ready for 4% interest rate on 10-year bonds and volatility

Bad news for investors on US stock markets. And they come, not by anybody, but by Jamie Dimon, the head of JPMorgan Chase&Co.
According to Dimon, the growth of the US economy and inflation may be fast enough to make the Fed raise rates more than expected.
It would not be a surprise if we witnessed an increase in interest rates on 10-year US bonds to levels of 4%, said Dimon.
According to him, the accelerated rise in federal interest rates could push interest rates on 10-year US government bonds up. We can easily see 4% interest rates even, and I think people need to start preparing for that, said Dimon, during a special interview at Bloomberg Television.
While interest rates rise as a result of the good health of the US economy, it will be a return to normal. However, interest rate hikes, coupled with a reduction in global bond repurchase programs, may cause more volatility, given that exit from monetary stimulus is unplanned territory.
So far, we have not had asset redemption programs or exit these programs, the expert added.
JPMorgan Chief Executive Officer also hopes the tensions between the US and China will not hurt the financial expansion plan for China.

Inflation in the Eurozone is slowing, the chances of ending the incentives - too

Inflation in the eurozone surprisingly slowed over the past month, according to last week's data, which reduced the chances of a timely exit from the program of incentives and rising interest rates.
Consumer prices rose 1.2% in April, according to Eurostat, which was below their 1.3% growth in the past month. At the same time, the result is sustained under the 2% target of the ECB.
The Core Consumer Price Index slowed down to 0.7%, or its lowest level in a year.
The results were considered very negative by market participants who continued to sell the euro against the dollar. The single currency is permanently traded below 1.2000 and it is extremely difficult for it to return over this treshold again.

Next stop for the bitcoin - $10,000?

The bitcoin rose 4.8% last week, neutralizing its decline of 4.1%. The crypto currency, however, continues to face difficulties in registering two consecutive days of rise.
In spite of the fall of the bitcoin in the recent week, however, the currency gained 6.3% last week. And more importantly, it managed to get back at trading levels of over $9,000.
Now, according to analysts, the crypto currency can continue to grow to a level of $10,000.
The highest daily rate was $9,500 and the lowest equivalent value was $8,750.
The good news for investors is that the crypto currency retraced from 23.6% fibonacci correction, which was at $8,996 to recover to $9,342.9.
Bitcoin bulls expect the good times for the crypto currency to continue, heading for the $10,000 psychological limit.

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One simple reason explains the narrow range of US indices

US stocks have been "stuck" in a narrow range in recent weeks, and the key reason behind this is very simple - there is no leader to follow.
This happens relatively rarely in the stock - lacking unambiguous leaders to keep the whole market up. Compared to the past year when these were technological shares, this year's situation is completely different.
Markets experience relatively similar periods of lack of leadership, said Michael Wilson, market strategist at Morgan Stanley.
Since the beginning of the year, the S&P 500 has declined by 0.21%, while the blue chip Dow Jones Industrial Average lost 1.6%. At the same time, the Nasdaq technology is up 2.5%.
The sectors are mainly traded downward, with only three of the 11 major sectors on the positive territory for the year.
The best-performing sector is the consumer cycle, adding 5.5% to its value this year. This, however, is predetermined by the strong performance of several names. For example, Amazon.com, which accounts for around 20% of the sector, has increased its market capitalization by nearly 34% this year.
Shares of Netflix Inc. - the fifth largest component in the sector, rose by more than 63% since the beginning of the year. Other names, like Home Depot HD and Walt Disney, have been in negative territory since the beginning of the year.
For the market as a whole, the lack of a sector to lead growth is also a "worrying signal" by itself.
Analysts comment that such periods occur in times of transition from a growing market to a market that has found its peak or is about to find it. The situation is further compounded by interest rates on 10-year US bonds, which rose by more than 3%, and by expectations of main interest rates hike.
There are some signs that the energy sector may become a market leader. It has grown by 9.5% since the beginning of the month, which is the best performance among the 11 major sectors of the broad US index.

Wells Fargo: Gold and silver in a bearish super-cycle

Bad news for investors in metals - like gold and silver. According to the Wells Fargo Investment Bank, gold and silver are in a super bearish cycle, which may last another five years.
And while analysts from the bank would not recommend an investment in either metal, in better position they think is the silver because it has a relatively higher upside potential, on a fundamental point of view.
The analysts from the bank are expecting a five-year cycle of bears, or something similar to the price of metals. This means a limited growth in metal prices and a lot of lateral movement in their price.
From the financial institution, they forecast a range in the price of gold between 1 050 and 1 400 dollars, while for gold - between 13 and 22 dollars.
For comparison, the price of gold ended on Friday at a rate of $1,323 per ounce, while the price of silver at $16.40.
Gold peaked in 2011, reaching a level of $1,900 per ounce, while the price of silver rose to the highest levels of $50 per ounce.
Gold is traded at levels of about 76 times, comparing to silver, at an historically average level of 37 times. Or the metal looks quite overrated compared to silver.

The UK economy with the weakest growth in five years

The first quarter was extremely negative for the British economy. Throughout it, it has seen its slightest rise in five years, data showed on Monday.
This led to strong fall for the pound against all major currencies.
The UK economy has risen by 0.1%, or at least since the fourth quarter of 2012. The result was well below the average expectations of growth.
The slowdown in construction costs was to a large extent the basis of poor performance. The unconditionally low temperatures and snow in the country since last month have largely contributed to this.
Our initial forecasts for the British economy show that Britain's economy has been rising at its weakest pace in over five years, with a weaker presence in the industry, said Rob Kent-Smith, official government official. And while the snow was partly responsible for this, especially in the construction sector, it was partially offset by increased electricity and online sales, the expert added.
The pound fell sharply against the dollar, losing 0.8 percent of its value to $1.3805 on Monday, or its lowest value since March 9. Investors raised their bets that the British Central Bank would not be able to raise interest rates soon.