During the early hours on Tuesday, we have seen the US dollar rallied against the Japanese yen, only to give those gains back up and fall flat. Ultimately, this is a market that continues to consolidate overall, and I do think that there are a lot of questions asked about where we go next. After all, the United States just narrowly avoided placing tariffs on multiple countries, as the new Trump administration has been quite busy. (Click on image to enlarge) At the same time, the interest rate situation in both countries has narrowed a little bit, and that does take away some of the so-called “carry trade” that a lot of traders like this  for. However, I also recognize that the Bank of Japan is somewhat lost as far as what it can do, while the Federal Reserve is probably going to have to stay somewhat neutral at the moment, meaning that they will have to stay with higher interest rates. Ultimately, this does drive this pair higher, but that doesn’t mean it does so in a straight line. Technical AnalysisThe technical analysis for this pair is rather bullish and I do think that despite the fact that the last couple of weeks have been somewhat flat, we still have to look at this through the prism of US dollar demand. Regardless of what you have been told, the US dollar is not going to suddenly cease being the world’s reserve currency. In fact, demand for US dollars has been picking up […]

Because that services are about 75% of the economy, even if goods production is contracting, since the turn of the MIllennium that has not necessarily meant a recession is in the offing. The economically weighted average to the ISM services and manufacturing indexes has been much more accurate since then.To wit: the ISM services report for January, released this morning, was weaker than December, but still well into expansion territory, with the total index at 52.8, and the more leading new orders component (not shown) was at 51.3:The three month average of each is 53.2 and 53.0 respectively.Since the three month total average in the manufacturing index was 49.5, and for the new orders subindex 52.7, that means the economically weighted average for the two is 51.0 for the total, and 51.6.For contrast, here is the three year record of the manufacturing index:Things were touch and go this past summer, when several times the services index did fall below 50, but the three month weighted average of the two indexes never did so.In summary, the economically weighted average of the two ISM indexes forecasts somewhat slow growth in the months ahead.JOLTS Report For December Shows Mild Improvement In Most Metrics, Anticipates Stabilization In Wage Increases ISM Manufacturing Index In January The Strongest Since 2022 Personal Income And Spending For December: More “Steady As She Goes” But With Late Cycle Characteristics

The fear of the consequences of Trump’s aggressive policies continues to drive spot gold prices towards historic record levels on a daily basis. According to current trades, the price of an ounce of gold has risen to a level of $2,862, the highest in the history of gold prices, and is stable around it at the time of writing this analysis. As mentioned before, investors will not mind the movement of technical indicators towards oversold levels, as in the Relative Strength Index and the MACD, as much as they care about the factors driving gold gains, which are increasing, which encourages bulls to move prices to new historical peaks. Accelerating the pace of movement towards the historical resistance of $3,000 per ounce, which was expected before Trump took over the US administration. (Click on image to enlarge)Will the price of gold rise further?According to gold market trades and through gold trading platform data, prices have risen to record highs as investors continue to seek safe havens, and gold is one of the most important, amid growing fears that the US-China trade war may ultimately lead to a slowdown in global economic growth. In the latest developments, US President Trump has postponed tariffs on Mexico and Canada but has continued to impose a 10% tax on all imports from China this week, prompting Beijing to announce retaliatory tariffs on US energy goods, which are scheduled to take effect next week.In addition to the uncertainty, Trump has suggested that the United States […]

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After an unexpected surge in US Manufacturing PMI surveys (Trump Effect?), despite slowing factory orders and a decline in manufacturing jobs (ADP), expectations for the American Services sector were considerably weaker.Despite a resurgence in US macro ‘hard’ data in January, S&P Global US Services PMI tumbled to 52.9 in January from 56.8 in December (slightly better than the 52.8 flash print in Jan)The ISM Services index also tumbled, from 54.0 to 52.8 (54.0 exp)…Source: BloombergUnder the hood of the ISM Services index, new orders weakened dramatically, inflation declined but remains hot, but employment improved modestly…Source: BloombergAn interesting pattern has emerged since Trump won the election…Source: BloombergThe S&P Global US Composite PMI Output Index posted 52.7 in January, down from 55.4 in December but still signaling a solid monthly rise in business activity. The US economy remains the strongest compared to the rest of the majors but its lead is fading fast…Source: BloombergA renewed increase in manufacturing production coincided with a slower rise in services activity.The rate of expansion in new business also eased in January, but the pace of job creation quickened and was the strongest since June 2022. Meanwhile, both input costs and output prices rose at faster rates.Chris Williamson, : “Service sector businesses reported a slowdown at the start of 2025, with activity levels growing at a reduced pace compared to the robust gains seen late last year. Looking at the manufacturing and services PMI surveys together, a 1.6% annualized GDP growth rate is signaled for January. That compares with a 2.4% growth signal for the […]