The resurrection of the pound & revolution in the bond market

١٦ أغسطس ٢٠١٩

UK monthly retail sales were expected to decrease by 0.2% however, but fortunately, we observe the increase by 0.2%. The pound was trying to gain a foothold above 1.21. Although the attempt failed at the end of the day, we continue to recommend buying the pound both mid-term positions and on the intraday basis.

Pound back above $1.21 but not for the log time. US retail sales grew unexpectedly Nevertheless, our recommendation is to sell on the intraday basis as well as medium-term positions - remains unchanged. The situation with the dollar has not changed much - it is too expensive given that the Fed started cutting interest rates and the threat of foreign exchange intervention by the United States.

Financial markets, meanwhile, continue to evolve literally before our eyes. Who would have thought a few years ago that investors would be willing to pay extra for the right to lend money? More than $ 16 trillion has been invested by investors in bonds with a negative yield. And the yield on 30-year US Treasury bonds fell below 2%, which is a historic low. We live in interesting times.

Argentina’s sovereign century bonds tumbled by the most since they were sold in June 2017. Currently, the yield on Argentina's international bonds is close to 100% (!), which made them the cheapest in the world. The yield on dollar bonds of the Argentinean government rose to 27%. Funds that invested in Argentine bonds are suffering huge losses. Considering that Argentina is not an economic dwarf, everything might end badly for the global economy.

Thanks to China, yesterday was an opportunity to make good money on our recommendation to sell gold. The asset has grown (1525) on the news that China is threatening the US with countermeasures. It seems like China has felt the strength and is ready to confront the United States. But it is still too early to panic. We still consider such behaviour as preparations for negotiations between the United States and China. The parties are simply trying to gain an advantage in the negotiating position. Recall, in our opinion, gold value is too high.

But the situation can change at any time., We continue to monitor the development of events and will continue to keep our readers updated on what is happening and how to make money on it.