The Real Bain of Equity Markets is Actually a US Dollar Problem

In a world where few want a strong currency, where is all of the capital going to flow? Will the Fed yield to this mounting pressure?
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Gold price falls back as US jobless rate hits eight-year low – The Week UK


The Week UK
Gold price falls back as US jobless rate hits eight-year low
The Week UK
This has smashed the dollar, against which gold is a key hedge, and sent the precious metal to new three-month highs. There is very little that appears to be standing in the way of the rally continuing, which is why more and more analysts have turned
PRECIOUSGold price slips after mixed US jobs dataReuters
Gold price slips after mixed jobs dataThe Nation
Gold price rises to three-month high after mixed US jobs dataYahoo Finance UK

all 11 news articles »

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The Stocks Bear Is At The Door, Part 1: Momentum Stocks Getting Crushed

One of the common transitions that bull markets go through as they age and die is a narrowing of leadership. As formerly strong sectors begin to stall out, investors shift into whatever is still looking good — that is, whatever still has upward momentum. Eventually capital becomes concentrated in just a few names. Then those stocks roll over and the game ends.
This time around Big Tech was the final category of momentum play, and it ended up attracting astounding amounts of money from both the usual suspects like hedge funds and some new suckers like the Central Bank of Switzerland, now a major holder of Apple shares.
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GBP/USD 2016 Rebound Vulnerable to Upbeat Fed Testimony

The near-term rebound in GBP/USD may continue to unravel in the week ahead should the Federal Reserve’s semi-annual Humphrey-Hawkins testimony with Chair Janet Yellen highlight a further deviation in the policy outlook.

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The End of Tax Havens?

By Jeff Thomas The image above is of a World War II German Panzer tank. So, what does that have to do with tax havens? I’ll get to that soon.
But first, let’s look at the Isle of Jersey, one of the islands in the English Channel. Most people think of it as a British tax haven, but it’s not, strictly speaking, a part of the UK and not a member of the EU. It’s a self-governing parliamentary democracy under a constitutional monarchy and has its own legal, judicial, and, most importantly, financial systems. For decades, it’s been a choice location for those who seek to avoid taxation. View full post on The Market Oracle

Dutch Money – Netherlands Coins in Circulation

This is an image showing the coins which are currently used as money in the Netherlands. This Dutch coinage is part of the monetary system used in the Netherlands. Page 63. View full post on About.com Coins: What’s Hot Now

Gold’s Luster at Risk as Fed Testimony Looms

Gold prices rallied for a third consecutive week with the precious metal advancing more than 3.5% to trade at 1157 ahead of the New York close on Friday

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Gold Ends Week Near 3.5-Month High; US Mint Silver Coins Jump – CoinNews.net


StreetWise Journal
Gold Ends Week Near 3.5-Month High; US Mint Silver Coins Jump
CoinNews.net
Most precious metals futures declined on Friday but rallied on the week. Gold and silver logged a third straight week of gains, with the former closing near a 3.5-month high and the latter just off from a 3-month high. Gold for April delivery edged up
Gold Slips as Dollar Gains Ahead of U.S. Jobs DataStreetWise Journal
Gold retreats from 3-month high, as optimistic jobs report lifts dollarNasdaq
Gold perched near 3-month highDaily Times
Metal.com News
all 15 news articles »

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Gold Stocks Something has Changed

In our missive last week we noted that:

While good things are happening under the surface for Gold, its lack of a strong rebound in recent months argues that such a rebound is in the future but not imminent. Gold’s steady downtrend could resume in the next week or two.
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A Week of Wonder and Befuddlement for the Yen

Last week we looked at the astonishing surprise decision by the Bank of Japan to move to negative interest rates.

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More Economic Problems…Jobs…Nasdaq Breaking Down…

The market has had every excuse to use economic woes as a reason to fall hard this past week. Poor numbers from the ISM Manufacturing sector, and then a hard decline in the ISM services sector. The market refused to fall, but it was somewhat understandable since the market had taken a massive hit lower and was simply trying to unwind oversold oscillators. The bear flag, if you will, that we have been seeing on all the daily index charts. Today was day fifteen, or exactly three weeks, but it seems as if the fifteenth day was the bad one for the bulls as the market could not withstand the Jobs Report, which came in 34,000 jobs shy of expectations. 151K versus 185K expected. The futures fell initially, only to come roaring back to green for a few seconds ahead of the open. It then began to fall, and, thus, we actually gapped down across the board with the Nasdaq taking the biggest hit. The market tried a few times to come back, but it seemed as if all attempts to rally were sheared off by the bears. They seemed angry today. Enough of these flags seemed to be their mantra for the day, especially in the world of high P/E stocks.
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CoinWeek Podcast #18: David Hall Reflects on 30 Years of PCGS – Audio: 18:56 – CoinWeek (blog)


CoinWeek (blog)
CoinWeek Podcast #18: David Hall Reflects on 30 Years of PCGS – Audio: 18:56
CoinWeek (blog)
PCGS founder David Hall takes a break from the Long Beach Expo to sit down with CoinWeek to discuss 30 years of PCGS, how detractors to third party grading had it all wrong, how the coin market has changed over the course of the past three decades, and …

View full post on numismatics – Google News

Highest Unemployment Rate in 2yrs. Stalls CAD Rally

This week’s moves have put the Bank of Canada, and CAD traders in a precarious position.

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Gold Stocks Sector: Rubber, Meet Road

You may have noticed that I have written relatively little publicly about the gold sector over the last few years (we have covered it consistently in NFTRH to keep subscribers aware of the bear’s status, and protected against it). Is that strange for a writer who was probably known first and foremost as a ‘gold guy’? Not at all! It’s just that it is not desirable to get bogged down obsessing on a sector in a bear market when there are other fish to fry on the global macro landscape. But the process of finding and confirming a bottom in the gold sector is now front and center as more of the fundamentals that actually matter come into place. To those fundamentals, we need to marry the technicals.
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PBOC Prepared the Yuan Ahead of One-Week Holiday

Both the offshore (CNH) and onshore yuan (CNY) rates closed higher on Friday after China’s central bank raised the yuan reference against the dollar to a one-month high of 6.5314.

PBOC Prepared the Yuan Ahead of One-Week Holiday

PBOC Prepared the Yuan Ahead of One-Week Holiday

Fundamental Forecast for the Yuan: Neutral

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Both the offshore (CNH) and onshore yuan (CNY) rates closed higher on Friday after China’s central bank raised the yuan reference against the dollar to a one-month high of 6.5314. Looking forward from February 7 to February 13, Chinese financial markets including equities and onshore exchanges will be closed for the Lunar New Year; the offshore yuan market will be open with normal hours. PBOC will NOT publish the daily yuan reference rate during the holiday week. However, this does not mean that PBOC will not intervene the offshore foreign exchange market if they see excessive volatility. As Chinese domestic markets will be relatively quiet in the coming week, major event risk for the yuan will likely come from overseas with specific focus on Japan and the world’s largest economy, the US.

The PBOC’s latest moves on the Yuan reference rate have sent out two important signals: 1) the regulator remains consistent with its earlier statement that “China has no intention to devalue the currency or start a trade war,” despite the recent Yuan short speculation. And 2) the central bank has made preparation for potential Yuan shorts during the holiday season; the pace of raising the reference rate was increased in the past two days. The reference rate was stronger by 105 basis points on Friday and 102 basis points on Thursday compared to an average 15-bps daily move over the past 19 days after the central bank began to stabilize the currency. This 200 point-range provides a buffer area for Yuan moves even without a reference rate. This is like leaving home for vacation and you know that the weather will be colder in your home upon your return, so you turn on the heat before you leave in preparation. Setting the reference higher is the PBOC turning on its heat before leaving for the holiday. Investors and traders should not be surprise to see “cold weather” in the coming days, which for Yuan is a bearish position.

But remember, this does not mean that guidance on the exchange rate will be foregone, especially if the Yuan rate becomes too volatile. So even though they’re on vacation, someone will still be watching the house; just in case. The central bank will keep a close eye on the currency and use other tools to defend it if massive Yuan selling begins. The PBOC can use open market operations in offshore markets, just as they hit HIBOR with a 66.82% rate less than a month ago to shake short-sellers out of the market.

As Chinese financial markets will be closed next week, event drivers for the Yuan will likely come from abroad next week. Without a Daily reference rate from PBOC to guide the Yuan, market forces may play a larger role than usual. Japan is the only major country in Asia that doesn’t celebrate the Lunar New Year; South Korea and Singapore both do. The BoJ has no scheduled announcement next week, but Japan’s trade figures will be released and China is one of its largest trade partners, so this could have some Yuan impact. From the US side, the big event is Federal Reserve Chair Yellen’s twice-a-year testimony in front of Congress. Her tone on monetary policy will move the dollar pairs, including USD/CNH.

Overall, the Chinese yuan is likely move lower over the next week without the daily guidance; unless its counterparties fall significantly driven by key events.

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