The yellow metal continued to try and break the resistance put up by the weekly pivot point at 1,316.02 on Wednesday morning. Although, the metal had reached far above the resistance and touched the 1,320 mark, it retreated afterwards, as the 20-day SMA is approaching at 1,322.16, and it is set to provide additional resistance against the bullion’s surge. Daily aggregate technical indicators forecast a fall of the metal by the end of the day’s trading session, and the closest support level is at 1,305.52. Both of these factors indicate, that the rising wedge pattern of the metal might be soon broken.
Dagong Europe has published a commentary entitled Top 5 Europe Based Multiline Insurance Groups: Performance and Outlook. The new commentary analyses credit characteristics, the latest performance and trends of the top five composite insurance groups by premium volumes based in Europe, namely AXA, Allianz, Generali, Aviva and Zurich. The report looks at the peer group on aggregate basis to assess overall characteristics and trends and to lesser extent on individual basis, mainly to understand and explain the underlying drivers.
In line with the Irish QIAIF and the RAIF within the Lux Rule books, Malta has now the Notified AIF (“NAIF”) regime in terms of the Investment Services Act (List of Notified AIFs) Regulations 2016. Such structure will make it easier for fund promoters to launch their investment vehicle as the timing to market is limited to 10 working days, i.e. the period required by the MFSA to include the AIF in the List of Notified AIFs. Needless to say, such period is subject to the completeness of the notification pack as required by the Authority.
The ECB did not announce changes to its monetary policy last week. Draghi also gave no indication as to possible future action, as he often used to do, and has categorically refused to comment on any potential evolution of the QE program (purchase of stocks, bank bonds or even helicopter money).
Despite a lack of events in the economic calendar the US Dollar managed to strengthen, and now there is a good chance of the pair settling above 102.70, where the weekly PP coincides with the 55-day SMA. If this is the case, the next resistance to try and stop the advancement will be 103.50, represented by the trendline that originated at the very beginning of the year. Additional resistance is at 104.80 (100-day SMA and monthly R1), but a breach of 103.50 is likely to be followed by a recovery to July highs at 107 yen.
Although yesterday in the morning the upside seemed limited, the price managed to mount 102 yen, thus closing above the monthly PP and alleviating some downward pressure. Nevertheless, the 55-day SMA stays intact, suggesting the near-term outlook remains negative and 100.80/70 is still a viable target. This support mainly consists of the 50% retracement of the 2012-2015 rally and monthly S1. Additional strong demand is seen at 100 yen, and for the time being this we consider to be the floor.
The shares of Europe’s third largest insurer dropped by more than 40% in the space of a year from March 2015 to March 2016. The return of Mario Greco to the position of CEO in early March seems to have marked a significant turning point.
In the last two months the global geopolitical situation has definitely worsened as the central bankers pursue their ZIRP and NIRP policies by adhering to financial repression and in some cases, as in Europe and Japan, with vigorous QE acquisitions that have completely disrupted the price finding mechanism of the capital markets. Insurance companies and pension funds find it ever more difficult to cope with the low yields of bonds and struggle to meet their obligations to shareholders and those enjoying entitlements.
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