The Renminbi falling will be positive for the some economies, but is there something more in this story?. Watch today’s interview with Paul Rodriguez of ThinkTrading, as he joins Zak Mir and Mike Ingram in the Tip TV Studio to discuss the markets, UK rate scenario, the head and shoulder formation in S&P 500 and the outlook for Sterling.
On the markets, Rodriguez comments that we are still in short-term ranges and winding back a little.
The huge UK government debt and the magnification of the rate hike effect – Watch the video for further insights.
USD/RMB – The next big thing?
Rodriguez believes that the Dollar/Renminbi will be the next big thing in markets. He notes that as the Renminbi weakens the prices go down, which boosts the weaker economies, but also give rise to deflation fears.
S&P 500 – Clock ticking for next phase
Rodriguez takes a look at the charts for S&P 500, noting that the index is seeing a head and shoulder topping formation and the next leg lower will be sharp. He shows how the equity index is back at March 2014 levels, a bad sign for bulls. On the formation, he believes that the right shoulder could see a lot of sideways price action.
GBP – losses ahead?
On the GBP/EUR, Rodriguez believes that the cross is making a topping formation on the charts and a correction lower towards 1.30 could be on its way.
The dwindling commodity companies will affect the UK banks, and with a rate hike unlikely in the economy so soon, GBP risks weakness ahead, according to Rodriguez. He further adds that the dollar will likely see strength going into 2016 and hence sees GBP/USD below 1.45 in the long-term.
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