Connect with us

Demo Trading

Monday’s Bullseye: 24 August 2020 | ThinkMarkets | ZA

Here is our week ahead preview for the week commencing 24th August  2020.  There are reasons to be cautiously optimistic Virus cases and deaths in the U.S. have started to drop again, potentially suggesting the peak has passed. There is always the possibility that authorities could soon approve an effective vaccine for Covid-19. So, the…

Here is our week ahead preview for the week commencing 24th August  2020. 

The sell-off in the dollar finally came to a halt this week, causing gold to remain under pressure for the second week running, although it did bounce noticeably off its lows late in the day on Friday when this report was written. Both the pound and the euro were hit the hardest as concerns over Brexit added to worries about the re-emergence of coronavirus cases in Europe. Friday’s publication of weak Eurozone PMI data suggested the return of coronavirus in parts of Europe was already impacting the economic recovery. The news sent the euro tumbling, while European stocks also fell, before bouncing back a little along with US indices. The Italian-German 10-year yield spread, a key gauge of risk in the region, rose nearly 3% on the week as investors moved into the relative safety of German bonds from riskier Italian debt. But is one month’s worth of data enough to completely reverse the trend for the euro, and more generally risk assets?

There are reasons to be cautiously optimistic

Virus cases and deaths in the U.S. have started to drop again, potentially suggesting the peak has passed. There is always the possibility that authorities could soon approve an effective vaccine for Covid-19. So, the rally for risk assets may not be done just yet. However, as we near the upcoming US presidential election, investors may reduce their exposure to US equites on the grounds that there is a real chance of business-friendly Donald Trump losing to Joe Biden. It is impossible to say when that motion may start, but it is best to be prepared for such a possibility nonetheless.

All eyes and ears on Jackson Hole

Traders will need keep a very close eye on the upcoming Jackson Hole symposium which starts on Thursday and will likely be the week’s main macro event. The symposium is attended by central bankers, finance ministers and other key figures from around the world. Historically, some key policy hints have emerged from speeches by leaders of major central banks at these meetings and investors will be looking for similar clues this time. With the world economy suffering from the pandemic, don’t expect to hear any hawkish messages. Instead, if any of the major central bank heads such as Christine Lagarde of the ECB or Jay Powell of the Fed promise to provide more stimulus then this should provide some support for the stock markets and potentially gold.

Economic calendar

The economic calendar is quite light at the start of the week but will get busier with the release of US macro pointers in mid-week. The latter parts of the week will be dominated by central bank speeches as the Jackson Hole Symposium starts. Here are the week’s macro highlights:


  • NZ retail sales


  • German final GDP
  • US Consumer Confidence, New Home Sales and Richmond Manufacturing Index


  • Core Durable Goods Orders m/m
  • Crude Oil Inventories


  • US Prelim GDP (second estimate), Unemployment Claims and Pending Home Sales
  • Speeches by Fed Chair Jay Powell and BOC’s Governor Tiff Macklem
  • Jackson Hole Symposium Day 1


  • French Prelim GDP and Consumer Spending
  • Canadian GDP
  • US Core PCE Price Index, Personal Spending and Chicago PMI
  • Speech by BoE Governor Andrew Bailey
  • Jackson Hole Symposium Day 2
So, in the week ahead, the main events are (1) the Jackson Hole symposium and the central bank speeches that will accompany it and (2) the resurging virus cases in Europe. Both have the potential to move the markets sharply.

S&P 500Source: ThinkTrader

South African Markets in focus
by Kearabilwe Nonyana

South African stocks are set for a soft week as global risk factors take their toll on our market. It remains to be seen how corporates in sectors which are affected by the mass unemployment and decreased disposable income will perform. The first signs of weakness in the economy are starting to be seen with Tickers like Sasol and Standard bank group showing declines in profits over the week. The JSE all share index is set to close of lower for the week for the first time in the past month. Market participants are starting to be weary of weakness in demand and a declining financial position of consumers in the economy. For the first time in 5 months all sectors in the economy are starting to operate as President Cyril Ramaphosa announced a relaxation in lockdown regulations.
South African markets the week ahead

Over the past couple of weeks, I have been particularly interested in seeing the Month on Month inflation for different global economies in the EU and the US and if the accommodative monetary policy will lead to demand in the economy. This will be a sign of how long the accommodative monetary policy will persist. The SARB in its modelling does not see inflation on the horizon. Excess money supply has shown to not cause an inflation hangover over the past 10 years but because economies have been closed off the ease of importing cheaper products offshore and having to bring back the manufacturing supply chain local may lead to an economy which has cost push inflation.

Global macro economics will remain a driver of our market as risk is starting to be evaluated by market participants; the excess yield our economy offers to offshore money may no longer be attractive when you weigh up the risk of a twin deficit( Current account and budget deficit) and decreasing disposable income due to high unemployment. The risk of renewed tensions between the US and China will also be watched closely

I expect the local market to trade sideways in line with global markets as the market looks for new catalysts.

Corporate Action
Corporate action


Continue Reading

Broker news

Donald Trump blasts ‘fools’ who oppose good Russian ties

US President-elect Donald Trump has posted a progression of tweets censuring the individuals who contradict great relations with Russia as “‘dumb’ individuals, or nitwits”.

Mr Trump promised to work with Russia “to comprehend a portion of the numerous… squeezing issues and issues of the WORLD!”

His remarks came after an insight report said Russia’s leader had attempted to help a Trump race triumph.

Mr Trump said Democrats were to be faulted for “gross carelessness” in permitting their servers to be hacked.

In a progression of tweets on Saturday, Mr Trump said that having a decent association with Russia was “no terrible thing” and that “lone “idiotic” individuals, or simpletons, would believe that it is awful!”

He included that Russia would regard the US increasingly when he was president

Continue Reading

Broker news

Bulls and Bears Took on More Currency Exposure in Week Through January

he most striking improvement among theoretical situating toward the finish of a year ago and the primary session of 2017 is not that modification were little. There was just a single gross theoretical position modification of more than 10k contracts. With sterling apparently not able to maintain even humble upticks, the bears added 13.1k contracts to the gross short position, lifting it to 120.2k contracts.

Or maybe, it is eminent that examiners for the most part added to positions, long and short, as opposed to close positions at the very end of the year. Examiners added to net long outside cash prospects positions, aside from in the Japanese yen and Swiss franc where 2.6k and 2.5k contracts were exchanged separately. Examiners likewise added to gross short positions. Here there was just a single exemption, the Japanese yen. Despite the fact that the dollar shut comprehensively higher in front of the end of the week, every one of the monetary forms we track here, spare the Mexican peso, picked up against the dollar in the three sessions since the finish of the CFTC reporting period.

Every once in a while it is helpful to review why many market members take a gander at the theoretical situating in the cash fates advertise. It is not that the outside trade is essentially a prospects showcase. It is principally an over-the-counter market in which every day turnover midpoints in abundance of $5 trillion a day.

Trade exchanged monetary forms and alternatives represented around 3% of the normal day by day turnover as indicated by the BIS study. Be that as it may, past reviews have discovered some contemporaneous connection between’s market heading and net position changes. We think it additionally offers knowledge into a specific market section of pattern supporters and energy brokers. It is not by any means the only device, yet one of a few data sources.

One ramifications of this is albeit theoretical positions in the money fates market are moderately extensive, it is still little contrasted and the money showcase. Along these lines, it is difficult to see the genuine essentialness of a record vast position, as though there is some market top. At some point, examiners are not driving the costs, possibly there is another fragment, national banks, enterprises, as well as genuine cash that is more essential at any given minute.

We invest some energy taking a gander at gross positions instead of just net theoretical positions, which is the more customary approach. We think a more granular look is frequently fundamental. There is a distinction between short-covering, for instance, and new purchasing, however it appears to be identical in the net. Additionally, the gross position is the place the introduction is not the net position. A net position of zero does not mean the market is nonpartisan. Net positions could be huge, which implies a short press or a negative stun could in any case troublesome. The positions that must be balanced are captured in the gross measure not the net figure.

We find numerous customers are likewise keen on theoretical situating in the US Treasuries and oil. The net and gross short theoretical Treasury position has swelled to new records. The bears added 23.8k contracts to the as of now record net short position, lifting it to 616.2k contracts. The bulls attempted to pick a base and added about 20k contracts to the gross long position, which now remains at 471.2k contracts. These modification prompted to a 3.8k contract increment in the net short position to 344.9k contracts.

The bulls delayed in the oil prospects toward the finish of 2016. They exchanged short of what one thousand contracts, leaving 608.1k gross in length contracts. The bears added 4.1k contracts to the gross short position, giving them 168k. These conformities trimmed the net long position by very nearly 5k contracts to 440.1k.

Continue Reading

Broker news

3 ways to profit in the ‘year of the dollar’

In December, the Federal Reserve raised loan fees for the second time since the Great Recession and included the desire of a 2017 financing cost climb to its gauge. Furthermore, only a couple days prior, the abundantly anticipated minutes from the most recent Fed meeting demonstrated the most hawkish tone from the national bank in two years.

In the meantime, Europe has been dove into political turmoil after a year ago’s Brexit vote and the later abdication of Italy’s leader. Somewhere else, the Bank of Japan proceeds down the way of negative rates and forceful security purchasing.

Put it all together, and it isn’t astounding that the U.S. Dollar Index is up against 14-year highs.

Speculators may have missed so much discussion on account of babble about the Dow Jones Industrial Average at the end of the day almost hitting 20,000. Be that as it may, paying little respect to your assignment to stocks or your venture skyline, this sort of huge picture incline in the dollar implies right now is an ideal opportunity to position your portfolio to benefit and, maybe most critical, to keep away from a portion of the pitfalls that can originate from a solid local cash.

Here are a couple ideas dollar exchanges ought to consider:

Residential plays over multinationals

There’s a considerable measure of seek after shopper stocks in 2017 on account of an enhancing work market and any desires for a jolt under a GOP-controlled Congress and President Donald Trump. In any case, remember that not all retailers are made equivalent especially those with abroad operations that are adversely affected by the wide dissimilarity in monetary standards at this moment.

For example, retailer Wal-Mart Stores Inc.(WMT) said troublesome money trade rates shaved very nearly 2.5% off profit for each partake in the second quarter of 2016. On the other hand consider that in the monetary final quarter of 2016, athletic attire goliath Nike Inc.(NKE) saw its income development cut down the middle because of forex weights, from 12% year-over-year in consistent cash measures to only 6% including real money changes.

To take advantage of the “reflation” exchange that numerous financial specialists are counts on in 2017, you need to represent the headwinds that a solid dollar are making for multinationals at this moment. The most ideal approach to do that is to consider customer plays that do by far most of their business here in the U.S. – for example, Foot Locker Inc.(FL), which has been an uncommon splendid spot in retail throughout the most recent couple of years.

Supported money ETFs

Obviously, in the event that you need a steady portfolio, you can’t just purchase just local centered values. Geographic expansion is similarly as imperative as enhancement crosswise over parts and resource classes. Such a large number of financial specialists keep on holding worldwide plays in light of a legitimate concern for a balanced portfolio, regardless of the possibility that it implies battling a daunting struggle as a result of a solid dollar.

The uplifting news, notwithstanding, is that you don’t need to leave yourself to torment through a solid dollar and a powerless euro when you put resources into Europe. Nor do you need to stress over the yen-dollar conversion standard when you put resources into Japan. That is on account of there’s an entire group of cash supported ETFs to permit financial specialists to put their cash in outside business sectors yet keep away from forex issues.

Consider that Japan’s Nikkei 225 file is up around 25% from its July 2016 lows. The WisdomTree Japan Hedged Equity Fund(DXJ) is up 35% in a similar period on account of assurance from forex issues and a somewhat better-performing rundown of stocks – while the non-supported iShares MSCI Japan ETF(EWJ) is up only 10% in a similar period because of battling a difficult task against a solid dollar.

In the event that you need to differentiate your portfolio comprehensively, you ought to consider supported assets that incorporate the Japan-centered DXJ, the WisdomTree Europe Hedged Equity Fund(HEDJ) to play Europe or the iShares money Hedged MSCI EAFE ETF (HEFA) for developing markets.

Dollar list ETF

In the event that you are searching for an immediate play on a rising dollar as opposed to putting resources into stocks, figuring out how to exchange remote trade can appear like an overwhelming undertaking. Gratefully, there’s the PowerShares DB US Dollar Index Bullish Fund(UUP).

This ETF is attached to the U.S. Dollar Index, which is a measure of the greenback against a wicker container of other worldwide monetary standards including the yen and the euro. It’s a straight money play, however that doesn’t make it straightforward or hazard free. In the event that the dollar debilitates, you’ll lose cash similarly as though you’re putting resources into a stock that has fallen on difficult circumstances. Furthermore, obviously, PowerShares takes a little cut of your speculations en route that indicates 0.8% yearly, or $80 a year on each $10,000 contributed.

Still, in the event that you need to conjecture on the dollar or support against a solid U.S. cash keeping down other worldwide ventures on your rundown, it’s maybe the least demanding approach to do as such for generally financial specialists.

Continue Reading