Market Update: Relationship Normalization

Market relationships seem to have normalized: equities to fixed income, volatility to equities and fixed income, forex to the rest of the capital market.  Jack Bouroudjian highlights those relationships and the impact they may have as we head into February. The post Market Update: Relationship Normalization appeared first on OpenMarkets. Source: CME Open Markets – Market Update: Relationship Normalization

Do Oil Prices Really Predict Gasoline Prices?

With the commencement of a new round of OPEC + Russia crude oil production cuts on January 1, many people are worried about a sudden and crippling rise in the price of gasoline at the pump. The relationship between oil prices and gasoline prices is notoriously hard to track. WTI crude oil prices fell from the high of $76.90 reached on October 3, 2018 to the recent low of $42.36 on December 24, a 45 percent drop. Gasoline prices, however, fell only 17.3 percent in that same time period. According to the Energy Information Administration (EIA), regular retail gasoline price…

Can the U.S. Dollar Keep its Momentum?

For most global investors, U.S. dollar hedging was the only currency risk management strategy to follow in 2018. The dollar rose against all of its major developed market crosses – by 3.4 percent vs. the euro; 4.5 percent vs. Canadian dollar; 5.1 percent vs. pound sterling; 5.8 percent vs. Australian dollar; and a more modest 0.3 percent vs. the yen. Dollar strength against the supposed darlings of the emerging markets – the BRICs (Brazil, Russia, India and China) – was even more marked. The Brazilian real declined 15.1 percent against the USD, the Russian rouble 11.8 percent, Indian rupee 10.4…

Market Update: A Look at Earnings

Earnings projections following the last earnings period were subdued, with input costs expected to rise for many companies. That hasn’t necessarily proven correct this earnings period. Jack Bouroudjian discusses the market result. The post Market Update: A Look at Earnings appeared first on OpenMarkets. Source: CME Open Markets – Market Update: A Look at Earnings

Market Update: Taking a Breather

Domestic politics, geopolitics and earnings have delivered some bad news lately, leading to a slide in equity markets. Jack Bouroudjian looks at all three, and how they’re having an impact. The post Market Update: Taking a Breather appeared first on OpenMarkets. Source: CME Open Markets – Market Update: Taking a Breather

Is There A Gold/Bitcoin Correlation?

On November 14, 2018, CME bitcoin futures broke through the important $6,000 support level and lost more than 40 percent of their value in the next 12 days. On that same day gold futures accelerated off their lows and began an explosive 9 percent rally higher. Macro traders and analysts love dependable correlations between asset classes. The desire to spot a corollary trend is so great that maybe, just occasionally, some of us project a relationship before we have the real data to back it up. So gold and bitcoin started significant moves at the same time in opposing directions.…

Why Key Gold and Silver ETFs Are Focusing on Futures

In January, ProShares changed its silver and gold ETFs to track futures-based indexes. This marks the first time leveraged and inverse ETFs will benchmark to gold and silver futures prices. Our silver and gold ETFs (AGQ, ZSL, UGL and GLL) are changing their benchmarks from the LBMA (London Bullion Market Association) silver and gold auction prices to Bloomberg Commodity Subindexes. So how did we get here? A number of factors drove us to change the way we obtain exposure for our silver and gold ETFs, but understanding the gold and silver exchange-traded product (ETP) landscape is an important starting point.…

How Rate Changes Could Affect Consumers

The strong job market, low unemployment rate and rising wages are all good signs for the economy, but have posed a rising risk of inflation.  To offset this inflation risk, the Federal Reserve has gradually raised interest rates, which has the eventual effect of slowing the economy. This continued rise in interest rates over the last two years has been both good and bad news for consumers.  If you are a saver it has been positive; if you’re a borrower it has been painful.  The increase in rates affects mortgages, credit cards, home equity loans and car payments to mention…

Market Update: Looking Ahead to CPI

Jack Bouroudjian discusses why today was a breather, and what we should look out for next week, notably the consumer price index. The post Market Update: Looking Ahead to CPI appeared first on OpenMarkets. Source: CME Open Markets – Market Update: Looking Ahead to CPI

Will Gold Rebound in 2019?

Frankincense and myrrh may no longer be traditional Christmas gifts, but the appeal of gold endures. For investors, however, the yellow metal lost a little of its luster in 2018. In late December, the gold price was down 4.5 percent ($1,255 per ounce). It had also suffered the indignity of being surpassed by palladium as the most valuable precious metal, something that last happened in 2002 when gold languished at levels around $450/oz. Gold and Real Yields Gold faced three main headwinds in 2018: rising (real) interest rates; a strong U.S. dollar; and, until recently, relatively low levels of equity…