Trumps Proposes 25% Tariffs on $200 Billion on Chinese Imports Instead of 10%, Yuan under Pressure

According to Reuters, a trustful source that is familiar with President Trump plans, the US will probably announce a proposition for higher tariffs on Chinese imports.

There was no immediate reaction from the Chinese administration after Trump’s new proposal but last month China accused the US of bullying and warned that they will answer back.

Tariffs could escalate the trade war between the two biggest economies in the world although the tariffs will not be imposed until after a period of public comment. Obviously, investors concern that a trade war escalation between the two countries can hit global growth.

Some of the goods that are affected by the tariffs are lighting products, Chinese Tilapia fish, printed circuit boards and more.

The dollar trades at 6.8140 versus the Yuan, up 0.13% after the reports.

Thu Yuan falls for the last 4 months in a row versus the US dollar and China’s central bank put the currency at the weakest level for 3 months. In addition, a survey showed that China’s manufacturing growth in July is the slowest for 8-month as export orders dropped. On the other hand, US steady growth will probably keep the FED on the same pace for another 2 hikes this year.


Suggested Articles


On Tuesday, the US Consumer spending data was a positive and steady increase in June while wage growth staying restrained.

The core PCE index, almost hit the Fed’s two-percent inflation target while it raised 1.9% from a year earlier.

Tom Porcelli, chief U.S. economist at RBC Capital Markets. Said: “Though the tariff tantrum ramped up a bit since the last FOMC confab, the core of the Fed is thus far unconvinced that this warrants any material shift in the outlook, our core view remains that the Fed is poised to raise the fund’s rate by an additional 50 basis points this year and another 100 basis points in 2019.”

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Russian Hackers Invaded Control Rooms of U.S. Power Companies, President Trump Warns Iran

The Wall Street Journal reported on Monday that hackers from a Russian state-sponsored group invaded the control rooms of U.S. power companies. There were two attacks by the Russian group: the first attack was back in the 2016 and the second attack throughout 2017.

The Russian hackers broke the security networks of American important power companies last year and possibly caused some blackouts.

It most probably carried out by hackers that are specialist and worked for a Russian stated sponsored group known as Dragonfly or Energetic bears, according to Wall Street Journal.

The hackers probably manage to enter the company’s facilities by acquiring fake identities of actual employees.

Russia has denied any involvement in hacking the US infrastructure.


Suggested Articles


On other news, President Donald Trump warned his Iranian counterpart in a Twitter post to ‘NEVER, EVER THREATEN THE UNITED STATES AGAIN’ which creates more tension between the two countries.

The tension between the US and Iran has increased since President Donald Trump withdrawn the US from the Iran nuclear deal.

President Trump Tweet “To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!”

On Sunday, the Iranian President Hassan Rouhani warned the American President to not pursuing hostile policies by saying “War with Iran is the mother of all wars.”

The Iranian leader also said, “You are not in a position to incite the Iranian nation against Iran’s security and interests”.

On Monday morning, Trump’s security advisor who is well known about his hawkish bias backed the presidents warnings by saying in a statement “I spoke to the President over the last several days, and President Trump told me that if Iran does anything at all to the negative, they will pay a price like few countries have ever paid before.”

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Ukraine Leads the Crypto Regulatory Idea

Timur Khromaev, the head of the National Securities and Stock Market Commission (NSSMC) said on a Facebook post on Friday that a new crypto regulation plan has been supported by the Ukranian government.

The plan establishes the recognition of cryptos as financial instruments and the roles of the government in regulating these instruments.

This plan was created by officials from various regulatory authorities such as the National bank of Ukraine, Ministry of Finance, National Securities Commission, the Deposit Guarantee Fund and the Financial Stability Council.

Khromaev commented

The head of the National Securities and Stock Market Commission (NSSMC), Timur Khromaev said: “This is an important first step in building a consensus among government agencies and financial regulators which confirms the readiness to work with the Verkhovna Rada [the unicameral parliament of Ukraine] and the crypto market on forming a legislative and a regulatory framework that will ensure transparency and quality of relations between investors and crypto market participants,”

According to Ukraine’s local media reports, the country is ranked at the top 10 digital coin users countries in the world.

Ukraine also develops a very productive and attractive pool for crypto miners. Last month the country announced that they do not have any plans to regulate or require a license to mine cryptocurrencies. The announcement came from the country’s State Service for Special Communications and Information Protection.

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

“Largest Bilateral Trade Deal Ever” – Trade Deal Between Japan and the European Union Covers 600 Million People

The trade agreement will probably secure the global trading system from the threat of protectionism and covers almost a third of the global economy.

This agreement will eliminate all the tariffs on nearly all goods between Japan and the European Union and covers 600 million people altogether. Among all products, it will remove tariffs for exports like wine, Olive oil, and Cheese.

In addition, Japanese automobile makers and electronics firms will have fewer obstacles in the European Union.

The president of the European Council, Donald Tusk, stated: “largest bilateral trade deal ever.”

He added in a written statement: “Relations between the European Union and Japan have never been stronger, geographically we are far apart, But politically and economically we could hardly be any closer.”

This Agreement comes as an opposition to President Donald Trump tariffs on China and the EU and the rising threat of trade war.

According to CNN Baker McKenzie partner, Ross Denton said the deal signed Tuesday sends “a very strong signal to the US Administration that the EU and Japan, two major trade partners of the US, both see the benefits of removing barriers and reducing, not increasing tariffs.”

Cecilia Malmström, the EU trade commissioner, said that last month the US closed the door to Europe although the Europeans ware willing to lower its tariffs. The US deepened the conflict as with the implementation of new tariffs on Aluminum and Steel.

Another negative act by President Trump was at the start of his presidency when he canceled the Trans-Pacific Partnership which was another deal that lowered tariffs for the eleven remaining signatories. The deal is expected to start in 2019 after approved by both sides.

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Coinbase Looking Forward and Expand Their Services

Based on the Coinbase latest report the fall in the crypto prices had some serious drawback for the Coinbase App. Coinbase CEO and founder, Brian Armstrong, stated: “After many years of this, I’ve come to enjoy the down cycles in crypto prices more. It gets rid of the people who are in it for the wrong reasons, and it gives us an opportunity to keep making progress while everyone else gets distracted,” Armstrong posted. “We use the down cycles to build a strong foundation so we can thrive in the next growth cycle.”

Although the crypto market has been disappointing this past year, Coinbase is still expanding its business with new services and working towards to bring institutional customers in the cryptosystem.

Two months ago the company announced four new cryptocurrencies which were added to the Coinbase exchange during the past month.

Now the crypto trading giant wishes to adopt five new cryptocurrencies in its platform: Zcash (ZEC), Cardano (ADA), Stellar Lumens (XLM), 0x (ZRX)and Basic Attention Token (BAT).

In June, Coinbase also announced its plan to add Ethereum Classic (ETC).

Coinbase stated that the tokens expansion requires intense research as each coin has a different architecture.


Suggested Articles


Currently, Coinbase supports Bitcoin, Bitcoin, Litecoin, and Ethereum. The expansion can subsequently increase the exchange’s volume and income.

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

The US is Probably Targeting key Chinese Manufacturing Export Industries, Trade War Escalates

A potential implementation of the new tariffs on China will probably be a huge hit. Trump’s threat came on Tuesday and stated a 10% tariffs on $200 billion worth of Chinese imports.

According to the IHS Markit Chief Economist, Rajiv Biswas, United States aims for specific key manufacturing export industries like cotton, steel, and Refrigerators. The reason behind the potential tariffs on these goods is to target the metal products, auto parts as well as the electronics and textile manufacturers.

Rajiv Biswas said “For China, the US is its largest export market, accounting for 19% of total Chinese exports. Therefore, if the US escalates its tariff measures to an additional USD 200 billion of products, this would mean that around half of Chinese exports of goods to the US would face significant US punitive tariff measures,”

And added, “China’s export sector will, therefore, suffer a significant deterioration in export competitiveness to the US compared to other emerging markets’ manufacturing exporters, such as Vietnam, South Korea, Thailand, Bangladesh, Mexico, and Brazil,”.


Suggested Articles


One possible scenario for these tariffs could be the intention of the United States to hit the “Made in China 2025” program which is a plan for China to become one of the big players and have a key role in the global industries, an expert at Mizuho Bank said.

The tariffs will not be implemented immediately but will go through a 2-month review process. China, on the other hand, implemented counter tariffs on the US afterward.

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Jean-Pierre Landau: Cryptocurrencies Direct Regulation is Not Desirable

Although French officials released a report on July 5th with the conclusion that cryptocurrencies should not be regulated, most of the major cryptos are trading lower on Monday.

Jean-Pierre Landau, who is responsible to investigate the French blockchain regulatory policy, said that cryptocurrencies should not be directly regulated and pointed out the potential dangers that can arise if we categorized the cryptocurrencies in the wrong class.

“The danger is three-pronged: that of freezing the rapid evolution of technology in legislation, that of failing to grasp the real nature of the object we intend to regulate and that of pushing innovation towards regulatory avoidance. On the contrary, regulation should be technologically neutral, and in order to become so, address the actors and not the products themselves.”



On Monday, Bitcoin dropped 0.3%, trading at $6,721 at the time of writing.

Ethereum was also down almost 1.14% to $480, and Ripple dropped 1.08% to $0.47640 on the Poloniex Exchange.

In other news, Binance, one of the biggest Cryptocurrency trading platforms in Hong Kong donates $1 Million to those who suffered from the heavy floods in Japan. That was announced by Binance’s CEO Changpeng Zhao.

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Bitcoin Has a Potential to Reach $50,000; BitMEX’s CEO Arthur Hayes Remains Bullish

BitMEX Co-founder Arthur Hayes stated on CNBC that he remains bullish and believes the price of Bitcoin will reach $50,000 by the end of this year despite the recent falling of cryptos.

Even though Bitcoin price has dropped since the beginning of the year, Arthur Hayes stated: “something that goes up to [around] $20,000 in one year can have a correction,” on “Fast Money” Friday.

“We could definitely find a bottom in the $3,000 to $5,000 range,” he said. “But we’re one positive regulatory decision away, many an ETF approved by the SEC, to climbing through $20,000 and even to $50,000 by the end of the year.”

Bitcoin, the largest cryptocurrency by market cap, fell last week under the $6000 level but currently is trading at $6341.


Suggested Articles


Other popular coins such as Litecoin, Bitcoin cash, Ripple, Ethereum also had the same drop this year following bitcoin sell-off. However, Hayes said that Bitcoins volatile nature is what makes the coin so popular among investors.

 He said. “Now that we have more visibility, more people talking about [bitcoin], the time between an aggressive bear market and an aggressive bull market, I think, is going to shorten,” he said.

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

$10 Billion Was Lost form Bithumb and Cryptos Recover Slightly

No problem the cryptocurrency market just added today another $8 Billion to its value.

Bitcoin, Ethereum, Ripple, and Bitcoin Cash fell almost 2% on June 20. Now a minor correction was noted on the charts and that was the result of the hack, but a quick action was taken by the Bithumb which immediately completely stopped the correction rally of the cryptos and the short-term rally of Bitcoin. The correction was about from $6,300 to $6,700.

A statement from the Bithumb team was issued saying “We checked that some of the cryptocurrencies valued about $30,000,000 were stolen. Those stolen cryptocurrencies will be covered from Bithumb and all of the assets are transferring to the cold wallet.”

Bithumb made more than $300 million profit in 2017 having said it’s believed that the amount $30 million for the hack recovery will not much affect the company if we take also in consideration that the company valued almost over a billion.

Based on the CCN there is a fact that does not compliment the company and the fact is that after the release of the company statement they removed it from the social media platforms.

The company was asked about that and they said that the company will recover the $30 million with their own funds while regulators asked the company in the future to find a more organized way to deal with this kind of problems.

May indicators and many analysts were shown an optimistic bias regards to the short term trend that the cryptomarket created due to the positive movement of BTC and ETH.

Now regards the recent hacks we can say that cryptos may fell quickly if investors trust is drained because of the constant inability of the exchanges to stop hackers.

A large sell-off may occur and cryptos may end up worthless if the people responsible for the security of the cryptomarket don’t invest more in the security.

The infrastructure must be the main priority and not the marketing for the cryptos to function properly.

There is much potential to this technology but we need to advance with caution if we want to succeed.

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

President Trump Not Stepping Back, New Tariff Thread for China

This move from President Trump could be counted as a countermeasure to China’s decision to raise tariffs about $50 Billion on U.S products. This was also in response to the U.S for applying first, the tariffs.

President Trump stated: “China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology. Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong”

On the other hand, a released statement by China’s Ministry of Commerce on Tuesday saying that China will come back with “qualitative” and “quantitative” measures if the tariffs that President Trump announced really applied.

The statement noted: “Such a practice of extreme pressure and blackmailing deviates from the consensus reached by both sides on multiple occasions, and is a disappointment for the international community”

As far as the market the JPY gained momentum to the upside on Monday morning in Asia session.

That happened after the US President gave some clues about the possibility for introducing new tariffs on the US $200 billion worth of Chinese goods.

Once more Investors probably will stay away in fear of a possible unpredictable volatility that may result in huge losses.

According to investing.com, the dollar index fell about 0.15% to the level of 94.27 at 12:30 and the USDJPY slid about 0.74% to 109.73 after President Trump Annulment about the Tariffs.

This possible trade war now is threading to create more pressure on the Chinese economy. Not only that but possible expansion globally of the treat now looks more real.

Now concerns about liquidity in China started to show by the unexpected move of China’s Central Bank to inject about 200 billion yuan in medium-term funds into their banking system on Tuesday to make sure that they’re going to hold if a full-blown trade war starts. They are probably getting in defensive mode after seen that U.S president Trump not stepping back.

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Experts Warn Crypto world That the Pursuit for Decentralization May End Up in an Environmental Disaster

The fundamental flaw in cryptocurrencies creation is basically the uncontrolled network of computers and the imitators that contribute to high electricity consumption.

On their 24-page article which was released on Sunday, the Bank report that bitcoin and their mimic coins are suffering from a “range of shortcomings”. Those shortcomings will probably prevent cryptos to achieve their high expectations that have been created from the spark of interest last year.

The uncontrollable consumption of electricity and internet bandwidth by crypto miners may bring the internet down and may end up as an environmental disaster.

One major find in the BIS report is the analysis that the blockchain technology will need a robust software to handle the enormous transactions on a national scale. As the size of the ledgers keeps growing, probably, in the end, will overwhelm everything from individual smartphones to servers.

Base on the report: “The associated communication volumes could bring the Internet to a halt

A very interesting statement by researchers said that bitcoin miners are the major electricity consumers and those miners are consuming about the same amount as Switzerland does.

They Said: “Put in the simplest terms, the quest for decentralized trust has quickly become an environmental disaster”

On the other hand, hackers took the opportunity on the incomplete infrastructure of the crypto exchanges and they are hacking them regularly. For example, last week bitcoin fell after a South Korean exchange reported that they have been hacked.

Bitcoin fell about 0.9% to the level of $6.439 on Monday.

The BIS also stated some of blockchain technology advantages by saying that the technology offers quick cross-border payments with more efficient way.

They also stated that the technology offers faster transactions between the sender and the receiver with ease of an email that may be also the weak spot of the technology due to the risks on a number of factors to try and run a massive global economy with no center to control it.

The report concluded: “Trust can evaporate at any time because of the fragility of the decentralized consensus through which transactions are recorded.”

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

After Nine Years, The United States Can Look at the Future with Confidence

The Federal Reserve increased Interest rates for the second time this year and suggested 2 more rate hikes in 2018. The unemployment slides down and inflation overshoots their target faster than they anticipated.

“It took almost nine years of slow recovery for the United States to finally show growth potentials with a pace of 4%. Inflation steady went up to official target and unemployment is at the lowest that we see in this century. “

Bigger gains in productivity and salaries remain the important tasks for the US central bank, although the main goals of stable prices and the full employment have been completed.

The fact that the Fed held interest rates very close to zero for years caused them to lose almost $3.5 trillion in bonds, in an exceptionally risky effort to boost the recovery, did not eliminate the dangers. The risks are still around the corner as prices and did not respond to the enormous monetary stimulus, neither the job market which cooled when the Fed began their tightening policy.

Fed Chair Jerome Powell said on Wednesday that the economy was in “great shape” and he feels that they are no longer affected by the fear of slipping back to zero interest rates.

“I think we are far enough away now though that the risks are kind of balanced,” he said. “I think it’s more just, we are just looking at the economy and what does it need and how do we sustain the expansion, keep the labor market strong and try to keep inflation near 2 percent.”


Suggested Articles


This optimistic and steady expansion of United States economy can characterize as the second longest in the country’s history.

According to Bloomberg. “The S&P 500 Index of U.S. stocks fell after the Fed decision before rebounding, while benchmark 10-year yields ticked up to 2.98 percent from Tuesday’s 2.96 percent. The Bloomberg dollar spot index, which tracks a basket of global currencies against the greenback, temporarily rose after the FOMC statement and was little changed on the day at 3:19 p.m. New York time.”

With the US interest rates gradually on the rise, we can observe an aggressive approach that makes the officials be more urgent for a tighten policy, as unemployment already fell in May and meet their targets.

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Fed Meeting Could Provide Clues on Future Policy, Will the Dollar Rise?

On Wednesday, the Fed will conclude their 2-day meeting which is expected to meet expectations of a second rate hike this year. Fed chairman, Jerome Powell, will begin his press conference 30 minutes after 2 p.m.

The market will focus on the Fed’s clues on its future tight monetary policy as the Fed already applied a rate hike earlier this year. The reason behind the hikes is due to the steady expansion of the US economy. On the other hand, the accelerating growth and inflation might also ignite a more aggressive tightening policy as weak wages increases.

Bloomberg Economists survey predicts that the FOMC will probably stay with its March prediction of three rate hikes this year.

Steven Ricchiuto, chief U.S. economist at Mizuho Securities said: “there is a risk that the dots go up a tad, not down”. “All you need is for one to change. There has been enough strength in the economy”.

Any hawkish comment from Powell can support the US dollar strength as other big economies (Europe, Japan, UK, etc…) are currently a step behind the US economy.

The Dollar index is steady ahead if the FOMC meeting and reaches the 93.80 level. The USD/JPY trades at 110.68, its highest level since May 23rd.


Suggested Articles


Masafumi Yamamoto, the chief forex strategist at Mizuho Securities in Tokyo stated that “There are views that the recent emerging markets turmoil could hold back the Fed from quickening the pace of its rate hikes. So the dollar would benefit if the Fed actually signals readiness to hike four times this year”

Masafumi Yamamoto explains why the EUR recently fell by saying that the ECB will probably not willing to hasten any policy normalization and he believes that such expectations are overdone, but also the meeting will disappoint those that expecting for hawkish rhetoric which would explain the euro’s recent weakness.

The euro was trading at $1.1760 at the time of writing. The ECB will hold its policy meeting tomorrow at 11:45 GMT.

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Trump, Kim Historic Summit Sparks a Bullish Sentiment for US Dollar

The President of the United States said that the two have made a big progress and that the meeting went better than he anticipated. They are both hoping for a historic deal to end the nuclear standoff crisis at the Korean peninsula.

How Markets React

The US Dollar rose versus the Yen, the Koren Won went up almost 0.2% while the Asian equity Markets were more volatile than usual with the Nikkei getting some gains of about .5%. The euro retraced from a three week high of $1.1840 to about  0.1% at $1.1791 and the Spot Gold went down about 0.2 % to $1,297.31 an ounce.

Analysts at OCBC stated “The key question is whether this summit will lead to a lasting, materially positive outcome”

The real question here is whether markets getting more balanced after the end of the summit or will Investors gain more trust?

Many investors have their hopes pretty low after the summit and believe that the summit was not successful.

Robert Carnell, a chief Asia-Pacific economist at ING said “So today, we have the opportunity for a historic meeting, a possible end to the Korean war, and a possible move to denuclearize, and maybe even demilitarize the Korean peninsula. All of that’s great, but how can you make money from it. Well, the short answer is you probably shouldn’t even try.”

Also, Robert Carnell after the meeting of the G7 said that “existential global threat” is the tariffs and those are a bigger threat.

The busy week ahead may give investors some clues of what might happen with the global economy as the U.S. Federal Reserve policy meetings and the European Central Bank are next, as well as the Brexit bill vote. The U.S. Federal Reserve is almost certain to raise interest rate next week but investors will focus on the central bank’s outlook for 2018.

Goldman Sachs forecast that the Fed will hike rates three and four times in 2018 and 2019, respectively.

Gold Prices remain vulnerable on the anticipation for the upcoming U.S. Federal Reserve meeting which means that gold may be bearish as its struggle to compete with yield-bearing assets when rates rise.

On the other hand, Gold could find some support from safe-haven buying as markets try to recover from the aftermath of trade tensions and the G7 Meeting.

Other reports to watch this week include the U.S. inflation, retail sales and industrial production.

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Hackers Pushing Bitcoin Down Once More

This once more created a great uncertainty in the Crypto market that has nothing to do with the actual value of the coin but more because of the infrastructure been incomplete.

The rapid growth of the popular coins came with a big disadvantage – the fact that we don’t have a solid security against external threats. Now investors have to face a real threat besides the fact that the cryptos are still premature and are riskier than other assets.

Recently, hacks are more frequent and destabilize the market by creating panic. Investors do not have the safety pillow as some promised before.

According to Conrail, their system was under “cyber intrusion,” caused a loss of about 30% of the cryptos traded on the exchange.

According to investing.com “On the Luxembourg-based Bitstamp, bitcoin was trading at $6,763.96, down a sharp 11.2%from Friday, having slide down roughly 65%from its all-time peak hit around mid-December 2017.”


Suggested Articles


Bitcoin was about at $6,689.0 by 08:00 GMT on the Bitfinex exchange and went down about 8.0% over the previous 24 hours.

Ethereum was about 8.6% at $530.1 on the Bitfinex exchange.

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Trump Stopped Pushing Kim for Denuclearization

The immediate denuclearization is no longer on Washington’s agenda and many are wondering if President Donald Trump will keep his noticeably softened tone next week in Singapore, and if he is going be able to achieve the promise “complete, verifiable, and irreversible denuclearization’ in a short period of time”.

More than a week after the cancelation of the June 12 summit on Friday the President of the United States of America told reporters that he confirms his return to the table for the deal on denuclearization in stages via multiple meetings.

President Trump said “We’re not going to go in and sign something on June 12 … We’re going to start a process,”

This dramatic change of President Trump, who was previously very strict and asked North Korea to surrender its weapons is now giving a tone of fear by changıng his approach. On the global geopolıtıcal scale, once again he has shaken the waters of stability, but at the same time, he has created a hope for a historical Agreement between the two leaders.

Another pullback from Trump was the fact that he stopped using the term “maxımum pressure” which ındicates that he no longer applies diplomatic sanctions and mılitary threats to North Korea.

“We’re getting along, so it’s not a question of maximum pressure,” Trump said on first of June.

Tom Collina, director of policy at Ploughshares Fund which is a public foundation against nuclear weapons said that Trump is now recognizing the reality of the situation.

“Trump is still pushing for denuclearization, as he should, but he now has more realistic expectations for how long it will take,” and add “as long as the North is not conducting nuclear and missile tests, there is no rush.”

Trump’s new diplomatic approach seems to be more in line with Kim’s preferences which rely on the more long-term process of disarmament. This approach may drive the process to more concessions like sanctions relief and security guarantees.

One probable danger of the long-term process may be the diplomatic and the global uncertainty that may drive the financial sector into a panic, meaning that investors may withdraw their investment and look for safe-haven assets.

Gold Technical View

Based on the Ichimoku system price and tekansen, kijunsen, chikou span are below the cloud.

The price for now based on Ichimoku seems to be bearish but to be able to find any potential signals price must bounce on kijun sen.

Gold Daily Chart
Gold Daily Chart

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Is US Dollar Euphoria Started to Fade Out?

The geopolitical events have a major impact on the investors trust about the Dollar and that it is backed up by the fact that the popular currency lost against the most major pairs.

Even though the USD retraced, nonfarm payrolls, the most important report last week, didn’t have any major impact on the FED.

The Wages went up by 0.3%, jobs had also a steady growth in May and the unemployment rate declined.

Now President Trump’s aggressive decisions about the global trade war has made the USD stronger but for how long? We are waiting for the countermeasures of the rest of the nation’s which they may trigger a chain reaction that may probably hit the US Dollar and create a panic in the US market giving the opportunity for the investor to look for a safer asset to invest.

Chairman Powell will probably raise interest rates next week due to the fact of the steady jobs growth.

We are awaiting for this week’s non-manufacturing ISM report which may show a much better and stronger performance in the service sector.

Now is more probable for the Fed to gradual increase the interest rates and according to Fed fund futures, investors see a probability of 75% chance to get another hike in September or November and even December.

On the EURUSD Daily chart we can identify a mature koumo break out with the price been below the cloud, tekan sen and kijun sen seem to be in a bearish formation and the chikou span is below the price.

The picture here may appear bearish for now but to be able to spot any potential bearish signals price needs to bounce on kijun sen.

EUR/USD Daily Chart
EUR/USD Daily Chart

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Italy Crisis and Brexit Bigger problem than EU Expected?

According to the finance minister of Latvia, Italy’s political turmoil will hit harder than Greek financial crisis and Brexit vote.

When Latvian minister Dana Reizniece-Ozola was asked if the recent events could have a growth impact during a panel discussion in Paris on Wednesday she stated:

“Definitely, I think we can see what an impact Brexit has already caused to the EU in general, and if Italy fails to form a government that might be still pro-European and still dedicated to the reforms and getting the country back within the fiscal stance, that might be a bigger harm to the whole of Europe.”

The financial and political situation in Italy has started to show the impact of this situation and the concern of the other members of EU is growing fast. Reasons like the weak growth, the unemployment which is at 11%, its public debt at 132% of (GDP) versus to the euro zone’s 87% put Italy in the fifth place of the most indebted country in the world.

Now a very strong statement that indicated the seriousness of the problem is the statement of Joumanna Bercetche on CNBC who said “We could handle Greece, we could and will handle Brexit … Italy will be too much I think.”

This statement comes to add another layer of the fear to the market which probably if we add all the other factors in considerations we may see the beginning of a chain reaction on the European markets and ignite events that may cause economic tsunamis in all over the globe.

Another factor that may indicate a panic in the markets in the past days, where we saw EUR fall to its lowest point in more than 5-6 months.

The clues are visible like the Italian bonds went to their highest level after many years and all major markets went down, including the S&P 500 and the Dow Jones on Tuesday causing markets to panic.

The fear in the markets that a financial downturn could spread to the rest of the 19-members of the eurozone and beyond is causing Europe’s growth to slow down and the FED has held their plans for hiking rate.

This panic will not help Italy and they may even need help from outside of the country to repay government debt, like Greece.

While the markets are in a panic a tone of optimism seems to show in Formers IMF Chief Economist Olivier Blanchard statement on CNBC this week that he believed Europe would be OK, but he was “very worried about Italy.”

The following months are going to be very interesting because the new economic and political crisis in Italy will test one more time the strength of Europe.

EURUSD 1H Technical View

Here we can see that a potential bullish opportunity has started to form, a confirmed kumo break out is in place with the price out of the cloud, tekan sen and kijun sen being in bullish formation, and the chikou span above the price.

What we would like to see before starting to look for any potential bullish signals is the price bounce on kijun sen.

Taking into consideration the fundamental aspect it’s important to state here that following the bull side shall be considered with caution.

EUR/USD 1H Chart
EUR/USD 1H Chart

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Is Bitcoin a Leading Indicator for Stocks?

On Tuesday, Stutland said on “Fast Money” that “Bitcoin is sort of becoming the new VIX, in sort of getting ahead of credit risk in the banking industry,”

Basically, Bitcoin is started to becoming the “money under the pillow” method for many investors due to the fact that they fear for some form of credit risk from the banks so they move there money from the standard assets to their basically own bitcoin wallet.

We can say that VIX is a measure of volatility and fear in the market and if you want to see what potentially the VIX may do in the following months then you may check bitcoin a month ago and see what it did in that time period, Stutland said among others.

“It seems there is a huge correlation right now between VIX and bitcoin 30 days ago, 30 trading days ago, that is starting to measure out credit risk in the market,” Stutland said. “That’s what cryptocurrency is becoming a way to sort of de-risk yourself from credit risk in the banking industry.”

Investors probably are going to be cautious with their money if banks increase credit risks, Stutland said.

The 3 major indexes closed lower, with the Dow Jones Industrial Average down nearly 500 points at its lows on Tuesday and the VIX went up to 18.39 while Bitcoin, priced around $7,500 on Wednesday morning, down from nearly $9,000 a month ago or close to $10,000 on May 5. According to CNBC.

S&P and Bitcoin
S&P and Bitcoin

Bitcoin (BTC/USD) Technical Analysis

According to Ichimoku system, it is notable that on BTCUSD daily chart the price is below the cloud and the chikou span is below the price, tekan sen and kijun sen seem to be in a bearish formation but the cloud seems to be in a bullish formation and two lines are still inside the cloud.

What we would like to see here is the price to bounce on the cloud and two lines come out from the cloud to start looking for any potential bearish signals.

Bitcoin Daily Chart
Bitcoin Daily Chart

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Will Geopolitical Tensions Drive Fundamentals in Favor of the Stocks this Summer?

The light bull sentiment on stocks looks like it comes with an expiration date.

With the Federal Reserve ready to increase interest rate due to the increase in inflation, now the markets are sensitive to geopolitical and trade frictions but also to military confrontations.

The U.S should try to ease the markets by convincing the EU and China to accept the cooperation in quickly balance out the affairs with America.

President Trump faces the challenge to reduce trade frictions and geopolitical confrontations in Eastern Europe, the Middle East, and East Asia.

According to Blackstone’s Joseph Zidle, there is a great possibility that rising inflation will tear into corporate profits and stretch consumers within the next 12 months.

“As we get into 2019, this earnings cycle is going to run its course. The earnings growth will have to slow because the year-over-year comps get so tough,” he told CNBC’s “Futures Now” on Thursday. “When you’ve got slower earnings growth and higher interest rates, that’s going to knock down equity valuations.”

Now despite his defensive outlook for 2019, he believes that it might be early  for investors to look for bearish clues because of macro headwinds like North Korea tensions which may drive most probably fundamentals in favor of the stocks this summer.

“When you’re lifting up the hood on the earnings story, it really tells you they’re quite healthy. So, I think the fundamentals are going to ultimately win out here,” said Zidle. “I’m optimistic. I think the second half is actually going to be a very good environment for equities.”

Zidle also said that many investors are sabotaging themselves right now by closing overweight positions in stocks.

“Investors are overweight fixed income, and they’re intermediate to long-term durations. So, they’re not positioned for that rise in rates,” Zidle said. “They are taking duration risk at a time when they ought to be the very short duration and taking credit risk.”

EURUSD Technical Outlook

Based on the Ichicoku system it can be observed that the price is clearly below the kumo the tekan sen and kijun sen are in bearish formation and chikou span is below the price.

To start looking for any potential bearish signals we need to see the price reversing to tekan sen.

EUR/USD Daily Chart
EUR/USD Daily Chart

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.