In this episode of the “Fed Watch” podcast, we focus on important macro charts. We cover bitcoin’s chart, currencies like the dollar, the euro, the Hong Kong dollar, and gold as well as energy commodities. We didn’t have time to get to all the charts I prepared, because the live show has time constraints. I will attempt to get a second part out this week to cover the rest of my commodity charts, as well as supply chains and shipping costs. You can find the slide deck of charts here.
Remember, a strong dollar is the Fed failing and it also provides massive stress to the rest of the world’s economy.
The euro is nearly the inverse of the DXY. It also shows a recent breakout, but in this case downward. If the dollar rally is to consolidate before heading higher, the euro is going to consolidate before heading lower. One thing is for sure, the euro has broken its two-decade support trend line and it’s in big trouble of crashing much lower.
The second chart of the Hong Kong dollar is a close up of the daily timeframe. The peg was defended successfully this time, by the authorities selling U.S. dollars and buying Hong Kong dollars, but the big question is do they have enough reserves to continue defending this peg for the rest of the year, like they did in 2018?
The Hong Kong authorities publish their reserve data, so we can get a clue to the severity of their predicament. At the end of April 2022, prior to the peg experiencing its greatest pressure, their reserves stood at $465.7 billion, $16 billion less than March.
Moving onto commodities, on this episode, I only have a chance to cover two charts. The first is Brent crude (U.K. crude price in orange) and West Texas Intermediate (WTI) crude (U.S. crude price in blue). They often are extremely correlated, with a slight premium on European Brent.
I wanted to cover this chart today, because of the headlines about the sixth round of EU sanctions on Russian oil; it is an absolute joke. As you can see on the chart, the orange line actually drops on the day the theatrical sanctions were announced.
That does it for this week. Thanks to the readers and listeners. If you enjoy this content please subscribe, review and share!
This is a guest post by Ansel Lindner. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.