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Sun, 30th April 2017

Anirudh Sethi Report

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Archives of “March 12, 2017” Day

2016 Debt Binge Produces (Surprise!) 2017 Inflation; Guess What That Means For 2018?

Just as everyone was finally accepting the idea of deflation and negative interest rates, inflation decides to pay a return visit. In the past week, articles with the following headlines appeared in major publications around the world:

Swiss inflation rises at highest monthly rate in 5 years

China February producer inflation fastest in nearly nine years

Year-over-year import prices at highest level in five years

ECB keeps bond-buying, rates unchanged amid inflation flare-up

Food inflation doubles in a month as UK shoppers start to feel the pinch

What happened? Well, towards the end of 2015 most of the world’s major governments apparently got spooked by deflation and decided to ramp up their borrowing and money creation. China, for instance, generated the following stats in 2016:

  • New loans totaling 12.65 trillion yuan, or $1.8 trillion.
  • M2 money supply growth of 11%.
  • Debt-to-GDP ratio jump from 254% to 277%.

In Europe, the European Central Bank ramped up its bond buying program, pumping about a trillion newly-created euros into the Continental economy:

Trump Tax Plan Could Spark Global Fiscal, Trade Policy ‘Race to Bottom’

Image result for donald trump gifThe US fiscal and trade policies overhaul, promised by President Donald Trump, albeit likely having near-to-medium-term positive effects to the US economy, are poised to significantly reshape the international trade and even fiscal policies around the world.

The lower taxes in the US and higher customs tariffs on the US border will spur many other economies to implement measures similar to Trump’s planning in order to remain competitive.

Subsequently, the rising protectionism in trade and higher budget spending here and there will drain the wealth of nations both in the advanced world and – perhaps, in an even more gruesome fashion – in the periphery. 

US President Donald Trump has repeatedly stated his intent to slap imports into the US with higher customs tariffs, up to 35pc on goods of Mexican origin, and up to 45pc on the Chinese shipments, in order to support domestic US manufacturers. He also pledged to ‘massively‘ cut both corporate and individual income taxes in the US and boost infrastructure spending so that the generation of wealth gains traction from higher levels of investment and ROI. US exports, meanwhile, will be free of exports tariffs, or face only minor taxation at the US border on their outbound route.

In terms of international trade, all these measures will likely give the US producers a competitive edge over their overseas peers, which other national governments will hardly tolerate. Fiscal stimulus, implemented in one major economy, will thus inevitably be mirrored to a certain extent in other nations, which will have lasting effects to the global economy and signal the end of the era of the post-Great Recession recovery, dominated by monetary policy measures.

40 Trading Wisdom -One Liners

1. Trading is simple, but it is not easy.

2.  When you get into a trade watch for the signs that you might be wrong.

3.  Trading should be boring.

4.  Amateur traders turn into professional traders once they stop looking for the “next great indicator.”

5.  You are trading other traders, not stocks or futures contracts.

6.  Be very aware of your own emotions.

7.  Watch yourself for too much excitement.

8.  Don’t overtrade.

9.  If you come into trading with the idea of making big money you are doomed.

10.  Don’t focus on the money.

11.  Do not impose your will on the market.

12.  The best way to minimize risk is to not trade when it is not time to trade. 

13.  There is no need to trade five days a week.  

14.  Refuse to damage your capital.

15.  Stay relaxed.

CRB INDEX :Last Hope at 182.20 level.Below This level…More Bloodbath in Crude ,BASE Metals

crb-12

Above is Weekly chart of  CRB INDEX

As Expected it’s Bloodbath…………………….

All Eyes on 182.20 level.Three Consecutive close below 182.20+ weekly close if happens

Target :178.94———177.85 level.

On Rise ,sell sell sell.

(It means more PANIC in BASE METALS ,CRUDE on card )

Market Doubts of Three Fed Hikes This Year Caps Dollar

Bringing forward expectations of a Fed hike from May-June to March was worth something for the dollar, but to get more now, the market may need to recognize the risk of three (or more) hikes this year.  With the strong February jobs growth and a 2.8% year-over-year increase in hourly earnings, rarely does the market’s confidence in an event surpass current expectations for a hike on March 15.
However, the market sees around a one-in-three or a one-in-four chance of a third hike this year. The risks for the updated forecasts from the Federal Reserve seem asymmetrically tilted higher, more rate hikes than fewer by more members.  The hawkishness of regional presidents may be underestimated.  The data and the global climate are conducive for expediting the normalization process.  The hawks will likely feel vindicated by recent developments and may press their case with more vigor.
The focus of the Fed has arguably shifted.  Previously, the issue was whether the data would confirm that the economy was evolving toward the Fed’s targets.  It did.  Rather than focus on the data points per se, officials appear more confident of the direction and resilience of the economy and prices.  They now are looking for opportunities, which helps explain the campaign to prepare the market for the March 15 move.
Still, the dollar’s technical tone has deteriorated, and the risk is on the downside over the next several sessions.   Our working hypothesis is that the dollar’s recovery that began in early February against most of the majors ended and a correction has begun,   For the Dollar Index, this means potential toward 100.75 and possibly 100.40.  The former is the 50% retracement of that rally and coincides with the 100-day average (~100.80). The latter is the 61.8% retracement.  Alternatively, if the Dollar Index has carved out a double top near 102.25, the neckline is around 101.20 (38.2% of the rally is ~101.10).  On a break of the neckline, the measuring objective is 100.
The euro’s pre-weekend rally saw it surpass the 50% retracement objective of its decline from the February 2 high near $1.0830.  That retracement was around $1.0660, and the 61.8% retracement is closer to $1.0700.  The euro’s five-day moving average crossed above the 20-day average for the first time in a month.  The single currency may be tracing out a double bottom at $1.05  The neckline is $1.0630.  The measuring objective is around $1.0760.

The Strategic Triangle That Is Changing The World

While the world continues to decipher, or digest, the new Trump presidency, important changes are afoot within the grand strategic triangle that lies between Russia, Iran and China

Away from the current chaos in the United States, major developments are progressing, with Iran, Russia and China coordinating on a series of significant moves crucial for the future of the Eurasian continent. With a population of more than five billion people, constituting about two-thirds of the Earth’s population, the future of humanity passes through this immense area. Signaling a major change from a unipolar world order based on Europe and the United States to a multipolar world steered by China, Russia and Iran, these Eurasian states are carving out a leading role in the development of the vast continent. As part of the challenges faced by these leading multipolar countries, the disruptive events originating in the post-WWII Euro-Atlantic world order will need to be tackled.

India : Cost overrun for 287 infra projects hits Rs 166,000 crore

As many as 287 infrastructure projects worth Rs 150 crore or above each, including those delayed due to various issues, have seen a cost overrun of Rs 1.66 lakh crore.

Total original cost of implementation of 1,186 projects was Rs 14,60,099.70 crore and their anticipated completion cost is likely to be Rs 16,26,445.47 crore, which reflects cost overrun of Rs 1,66,345.77 crore (11.39 per cent of the original cost), said the statistics ministry’s latest flash report for December 2016.

The 1,186 projects include 287 that reported cost overruns and 336, time escalation.

“In April 2016, out of 1,061 projects on the monitor of this ministry, 241 reported cost and 326 time overrun while during December 2016, out of 1,186 projects, 287 reported cost and 336 time overrun,” it added.

The flash report provides details on the status of the 1,186 central infrastructure projects that cost Rs 150 crore and above.

The Ministry of Statistics and Programme Implementation keeps track of such projects on time and cost overruns through its online computerisation monitoring system (OCMS) based on information provided by project implementation agencies.

According to the report, the expenditure incurred on these projects till December 2016 is Rs 6,94,056.07 crore, that is 42.67 per cent of the anticipated cost.

Trump Fires US Attorney Preet Bharara After He Refuses To Quit

The speculation over whether Trump would or would not fire the US attorney for the Southern District of New York, Preet Bharara, who earlier reportedly said he would not resign on his own, came to a close a 2:29pm ET when Preet Bharara, tweeting from his private Twitter account, announced he had been fired.

“I did not resign. Moments ago I was fired. Being the US Attorney in SDNY will forever be the greatest honor of my professional life.”

Bharara’s dismissal ended an “extraordinary” showdown in which a political appointee who was named by Mr. Trump’s predecessor, President Barack Obama, declined an order to submit a resignation.

Merkel to lay out tax retaliation plans when she meets Trump

Trump and Merkel to meet  on Tuesday

Angela Merkel will lay out her government’s response to a proposed US border adjustment tax when she meets with Trump this week.

Der Spiegel said the German government is reviewing its response including a complaint to the WTO.

Responses could include higher duties on imports from the US and allowing German companies to make their US import tax deductible, according to the report.