Daily Market Insight for the 26th May 2023 - Massive USD short squeeze + weak German GDP data

hi there trash this is Brad Gilbert with the daily Market insight for Friday the 26th of May all right now we're seeing a little bit of uh well dominance of the U.S debt ceiling talks okay and there's some U.S numbers have been coming out a little bit stronger pce prices and a few other things GDP numbers were were okay that they are lower than where they were previously but they are still above sort of the expectations now there's a couple of things that's just aren't fitting into plane this is where the US dollar is dominating right so inflation in the um in the UK 8.7 the consensus was 8.2 now this doesn't go with what's happened on the currencies and this is where things are a little bit discombobulated now what the market is looking at closely are the European numbers now the iPhone business numbers a little bit lower than expectations on the business climate and the expectations themselves but current conditions certainly not there not too far away so we're seeing a strong dollar right and then this is as I was saying you come down through the data that we're seeing and you know some of these numbers are aren't so bad right you come down here through the GDP price index and pce prices and things like that so the US Market's been quite resilient now they are focusing on on some of the Oddities right and what I'm talking about is the left field stuff German GDP numbers okay suggest the European market is going into recession and of course the new Services make a bit of a song and dance about it but the core fact is I think we're seeing a massive squeeze in positions right as we come through the market and we come into today's trading we're going to be looking at um you know the PC price index durable goods um these are the the real sort of solid pce price numbers UK retail sales um and a few other things but still you can't deny the fact that the market is really dominated by this U.S debt ceiling and today you know it was back to the positive side right so they as I said each every other day they're going to say it's not working out the next day it is but the dollar is cruising to the top side now adding to the potential sort of like Safe Haven US dollar proxy are some sort of stronger us numbers and we are seeing the US dollar sort of move to the top side aggressively and I think on a lot of these positions and you're looking at the US dollar against the Euro Sterling Aussie and kiwi we've had some massive flush outs right this to me is the big flush out of of stale long positions and and and it'd be very frustrating right all we're waiting for is the US to either default or pay them raise their debt ceiling so they can pay their debts and we are seeing a massive squeeze here in the dollar and that's happening across the board okay so it's a bit like it's these are tricky markets when you've got this backdrop if I have a look at the global markets okay and you have a look here once again gold massive clean out of gold Longs right everyone was very prepared for you know the uncertainty about the U.S Regional Banks and then this U.S debt ceiling came up everyone was buying gold gold gold you know what we've seen a massive squeeze there and that's uh you know it's causing a little bit of Havoc here across the equity markets like the NASDAQ you wouldn't even know there was anything going on it's just moving top side right and obviously the Euro and uh the dollar Index bit of a mirror image cryptos sort of just still drifting lower and it looks like oil is starting to finally sort of drift back down towards that 70 level so then when you are looking at the markets like these aren't Easy by any stretch and even trying to get the um the move down here Euro the price action here especially Euro and even Sterling I mean Aussie and kiwi are a bit clinical like this move in the Kiwi was Swift through these trend lines uh the Aussie had a bit of discombobulation there these aren't easy right it looks easy when you look at the move and you go oh yeah that's right but but fundamentally the US is in trouble right they've got the biggest debt in the world and they're looking to potentially not pay it you know or potentially not play themselves and the Dollar's rallying right it doesn't make sense so when it doesn't make sense I sort of sit back and have a look and see you know where things can fit into play and this is where the data comes in and we had UK inflation numbers stronger right it's very hard to sell sterling on the back of strong inflation numbers but you know what you focus on the weakness it's not hard to sell Euro when we see GDP numbers out of Germany sort of falling off the map right that's probably the trade but it's very hard to decipher which ones which as we sort of as you go through the trading week right and don't forget the first of June is the deadline I believe for the U.S debt uh to be paid or the debt ceiling raised um anyway we're gonna wait so just coming to today's trading UK retail sales is this going to be a thing we can trade or not well you know what Sterling's just had a massive clean out I guess you know and we had really big inflation numbers which suggests that the bank of England would have to raise rates so you're thinking well retail sales must be going up I keep an eye on it it may be a short-term trading opportunity but with everything sort of a little bit weird it's hard to sort of stay in the position too long the consumption numbers and the pce price index numbers are and the durable goods for that matter are probably the ones that will sort of shape the dollar right now if these numbers are all strong it goes with the current dollar strength and we may see a continuation of the current moves now I see a lot of um companies funds of squaring up a lot of bits and pieces before the weekend um don't forget there's going to be a lot of noise and a lot of news around the um the debt ceiling over the weekend uh it may leave us with nothing more to sort of nothing tangible to get our hands on as I said I reckon it's going to be at least another week before we work this out um and then we may see some significant turnarounds in some of these uh some of these moves so if you've missed some of these moves and I I haven't actually got any of them myself right it looks very easy here but to me the dollar we're gonna know what's going on the dollar like seriously with regards the debt ceiling and the massive geopolitical event I could see a massive turn around here so I'm preparing for what can happen if they don't raise the ceiling or if they do and then you can sort of catch the moves because we've seen what's happened so far so we've got a part of the answer we know where the Market's been squeezed and we know where the potential is okay is there a big potential downside probably not just at the moment right as I said I think this is a clean out uh we're getting ready for for a bigger move when we have the answers and to me that's an easier trade than trying to sort of guess every or second guess every move uh around these instruments right they may not sort of help you too much but what I'm trying to say is this this isn't easy okay it looks easy on some of the moves but generally speaking it's not at the moment there's convoluted news there's the U.S debt ceiling with the uncertainty and uh this is the tricky part of the financial markets to me look for the directional flow that goes with the short-term Trends that's an easier trade than trying to wrestle uh with the trends themselves all right that's it for me guys I mean sorry I couldn't be more specific but to me it's a wait and see situation and uh I'm waiting for answers I just think the euro uh Sterling Aussie kiwi a massively overcooked as is the as is the dollar Index right so I'm no surprise he to start seeing some of these um instruments moving back top side especially uh through the well I'm on the wrong screen there especially through the Asian day okay so retracement yeah maybe but you know what it's not really based off too much except that it's moved too far all right guys have a good one all the best keep an eye on those uh Equity markets NASDAQ rip Ryan the rest of them getting belted all right let's wait and see what the uh us come up with uh with regards the debt ceiling and that's all we can do from here is sort of monitor that situation don't forget my experience over 35 years is these news events um what that what happens is the the new Services they will publish one day yeah things are going well the next day it'll be no things are going terrible and that sort of tennis sort of action kiss keeps going back and forward until we actually get the decision so don't get sucked in by the new Services they are not uh here to help you they're here to sell advertising just remember that all right guys have a good one have a good weekend cheerio