2022/09/26 (077) Column

„In seems, the FED is
on the fast track – and for a long time!


If we look at the interest rate hike cycles of the last 25 years – unbelievable but true, meanwhile I’ve been observing and/or dealing (in)directly with us wallstreet for so long – we quickly realize, if we want or not, that this time everything is somehow different. Rather unusual by their standards, but the US Federal Reserve is trying to make a short inflation process with its interest rate hike policy. And that’s a good thing: instead of keeping up the current fear of interest rates for a long time, which not only unsettles us wallstreet but rather hurts the us economy like a hungry fox sneaking around the chicken coop. The FED now wants sooner or later something to be done must, more or less, end quickly. Finally, one would like to describe monetary policy as a convinced hawkish observer of the FED; who I basically am. True to the motto: “It’s better to have interest rates that are too high than too low! Even if it costs US Wall Street a few percentage points: But Main Street has better purchasing power (positive real yield), to which Wall Street also belongs. So all taxpayers and consumers, as I define main street.“

Okay, admittedly, due to an high us interest rate, the danger that the us economy slides into a us recession is increasing. But rising us interest rates are a reaction to high us inflation. And this is only due to the us fiscal policy of sleepy Joe and his us democrats, above all in the inted states. Who, since his inauguration, have openly declared war on his own us energy industry; and that despite the fact that, thanks to Donald J. Trump’s policy, the usa had once again produced more energy than it could consume itself. That`s why the prices were so low. And the usa, for the first time in over 40 years, under Trump’s watch, also exported energy abroad again. Unlike sleepy Joe and his us democrats. Where we in the white house, thanks to his contrary policy against his predecessor, have to deal with us inflation as high as it has been for 40 years.

DEVISE 2 DAY 48h – Some Last Market Price Action News

US Stocks Retreat For 5th Session
Wall Street extended losses for a fifth consecutive session Monday, with the Dow falling 325 points down 1.1%, the S&P 500 retreating 1.03%, and the Nasdaq 0.60%, as signals that inflation is becoming more entrenched in the economy paved the way for further interest rate increases. On Monday, Fed Collins said additional tightening is needed to rein in stubbornly high inflation and cautioned the process will require some job losses. Losses were also driven by foreign currency worries after the British pound tumbled to record lows against the USD and the BoE said it will not hesitate to raise rates if needed to control inflation. Energy shares were in the red across the indices as crude oil prices fell over 2%, with Baker Hughes falling nearly 6%. On a positive note, Wynn Resorts and Las Vegas Sands skyrocketed over 12% each, following news that China might, after almost three years, allow tour groups in Macau.

Gold Falls To New 2-Year Low
Gold prices weakened past $1,630 an ounce on Monday, hitting the lowest levels since April 2020, weighed down by a rallying dollar and surging Treasury yields that reflected expectations for tighter monetary policy and slowing global growth. A wave of central bank rate hikes has sent commodity prices into freefall. The European Central Bank is also expected to raise rates further, with ECB board member Isabel Schnabel saying Thursday that elevated inflationary pressures in the eurozone are likely to be more persistent than anticipated. Higher interest rates raise the opportunity cost of holding non-yielding bullion, denting its appeal.

Oil Declines Toward 9-Month Low
Oil prices fell almost 3% to a near 9-month low on Monday, with WTI crude futures trading below $77 per barrel as fears mount that an aggressive tightening from major central banks worldwide would derail globalgrowth and dampen energy demand. On top of that, a stronger dollar has been putting pressure on energy markets, making dollar-priced commodities more expensive for buyers holding other currencies. Meanwhile, investors continue to monitor supplies, particularly those from Russia amid a looming EU ban on its crude, and speculation that OPEC could further intervene in markets. OPEC and its oil-producing allies, incl. Russia, announced a small supply cut earlier this month and vowed to take more action should volatile market moves persist.

Chinese Yuan Weakens To 28-Month Lows
The offshore yuan weakened past 7.15 against the greenback, the lowest since May`20 as the USD extended a rally on the Fed’s aggressive tightening policy and despite the People’s Bank of China stepping in to rein in the currency’s weakness. The People’s Bank of China said it would raise the foreign exchange risk reserves for financial institutions when purchasing FX through currency forwards to 20% from zero starting on September 28th. The reserve ratio has been zero since 2020. Earlier in September, the PBOC announced it will lower the amount of foreign exchange that financial institutions must hold as reserves earlier this month. A gloomy domestic outlook also weighed on China’s currency, predicting Beijing will stick to its strict zero-Covid strategy well into next year.

European Shares Drop To Multi-Month Lows
European equity markets closed in the red after attempting a rebound on Monday, extending losses for a third consecutive session dragged by real estate, utilities, and financials stocks. Sentiment remained clouded by a worsening outlook for growth amid tightening financial conditions and an ongoing energy crisis. In the UK, British finance minister Kwasi Kwarteng’s subsidies and tax cuts program raised concerns about increasing public debt while sending the pound to a fresh record low against the dollar. Elsewhere, markets weighed the impact of an impending win by Italy’s first right-leaning government since World War II, as well as Moscow’s latest moves to annex the areas of Luhansk, Donetsk, Kherson, and Zaporizhzhia into Russia.DEVISE 2 DAY Another 48 Hours – Where I Was Wrong, Whre I Was Right

On Monday lasz week before we closed our 5 open 4XSetUps with a lost. Like our MSFT long trading capability (from 03/07/2022) with a lost of 41.26 $ (last price 244.74 $ as we went long at 285 $) at once. Our GBPJPY long trading capability (from last monday 09/12/2022) with a lost of 2.04 GBPJPY (last price 163.21 GBPJPY as we went long at 165.25 GBPJPY). Our VOW3 long trading capability (from last tuesday 09/13/2022) with a lost of 6.54 € (last price 145.46 € as we went long at 152.00 €). Like our LVMH long trading capability (from last wednesday 09/14/2022) with a lost of 12.4 € (last price 637.5 € as we went long at 649.9 €). And/Or last but not least also our GS long trading capability (from last thursday 09/15/2022) with a lost of 1.05 $ (last price 326.21 $ as we went long at 327.26 $). So we`re only long in the DXY and/or short in the UKOIL this week. But in these both trading capabilities at least with still an existing booking profit currently.

However, this week’s focus on the CBOT_MINI-YM1!
More in the Technical Anaylsis 4XSetUps once again every day, this week.