Interest rate pricing has a huge effect across many financial markets at present – the correlation between short-term rates, rates volatility and the USD is certainly evident.
However, with such a big window for increased volatility in interest rates pricing, as traders try and price the prospect of a 25bp or 50bp hike at the 22 March FOMC, as well as peak fed funds pricing, could increased pricing result in a big move in the USD and NAS100?
In the video, we look at how we can look at the fed funds curve and understand ‘what is priced in’ – we look at how to measure the degree of cuts priced in for a specific period of time, and how to look at implied volatility in bond markets – and, why it is important for FX and index traders?
Interest rates and short-term US Treasury bonds are the first derivative and so many markets take their direction from these inputs - hopefully, this gives some understanding of how you can use TradingView more effectively to assess these inputs.