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Does the Market Rally When the Fed Begins to Cut Rates?The relationship between rate cuts and the stock market, as illustrated in the provided graph, shows that major market declines often occur after the Federal Reserve pivots to lower interest rates. This pattern is evident in historical instances where the Fed's rate cuts were followed by significant drops in the S&P 500. Several factors contribute to this phenomenon, which are crucial for investors to understand. Economic Weakness: Rate cuts typically respond to economic slowdown or anticipated recession. Each instance of the Fed pivoting to lower rates (1969, 1973, 1981, 2000, 2007, 2019) corresponds to significant market declines soon after. Rate cuts signal concerns about economic health, causing investors to lose confidence, as reflected in the graph. Delayed Impact: Rate cuts do not immediately stimulate the economy; it takes time for their effects to propagate. The graph shows that the majority of the market decline occurs after the Fed's pivot, indicating that initial rate cuts were insufficient to halt the downturn. During this lag period, the market may continue to decline as economic data reflects ongoing weakness. Investor Sentiment: Rate cuts can trigger fear among investors, who interpret the move as an indication of severe economic issues. The graph shows substantial percentage drops in the S&P 500 following each pivot, demonstrating how negative sentiment can exacerbate declines. The fear of a worsening economy leads to a sell-off in stocks, contributing to further market drops. Credit Conditions: During economic stress, banks may tighten lending standards, reducing the effectiveness of rate cuts. Post-rate cut periods in the graph align with times of economic stress, where credit conditions likely tightened. Businesses and consumers may not be able to take advantage of lower borrowing costs, limiting economic recovery and impacting the market negatively. Historical examples such as the crises in 2000 and 2007 highlight substantial market drops after rate cuts, as seen in the graph. In both cases, the rate cuts responded to bursting bubbles (tech bubble in 2000, housing bubble in 2007), and the economic fallout was too severe for rate cuts to provide immediate relief. The graph underscores that while rate cuts aim to stimulate the economy, they often follow significant economic downturns. Investors should be cautious, recognizing that initial market reactions to rate cuts can be negative due to perceived economic weakness, delayed policy impact, and deteriorating sentiment.
Editors' picks
SP:SPXEducation
by MarkitMaven
5
Unemployment, FED Rates, SPXLooks like market bottoms just before the Unemployment peak. Market peaks just before fed starts reducing the rates. At the current situation, we have fed fund rates high and also unemployment started to climb. Will be looking at the unemployment going high and markets roll over and fed cuts rates. if FED keeps the same rate for long, something in the economy will break and they have to reduce the rate and if it happens then it's already too late. Looks like CD's and earning ~5% interest on cash is much better than risking for very limited upside in the market.
FRED:UNRATEShort
by MarathonToMoon
7
Where is the Dollar heading next ?• Dollar has been showing weakness in recent weeks as markets are expecting the FED to deliver its first rate cut in September. • The index fell from levels near 106 to 103.60 and then corrected to 104.90 (50% Fibonacci retracement). • If the jobs report tomorrow shows additional weakness, the Dollar should face selling pressure and break the previous support at 103.60 potentially down to 102.41. • Breakouts are occasionally re-tested. Therefore, the index could potentially breakdown to 102.41, re-test 103.60 and then make another leg lower and so on. • Same principle applies for upward breakouts, which should be the case if the jobs report points to increasing wages and tight labor market.
TVC:DXY
by RamziAbouAbdallah-CMT
Bitcoin and the FED Rate Decisions since 2021And there iti s, the DXY support Group Keeps rates unchanged September is almost looking like a certain point of change now. This chart is of all rate changes since 2021 and the Key moments. The take away from this is simply that the changes had NO effect on Bitcoin It has always retreated that 9-% after an ATH But DID make changes was the effect on other companies. And the LUNA and FTX collapse did take away confidence for a little while but that returned very quickly in 2023 and has continued through 2024 And it is not over yet. Will be very interesting to see what happens in September, because Rate cuts have historically seen Markets FALL but higher risk assets may win.. Time will tell
BITSTAMP:BTCUSD
by Orriginal
THE KOG REPORT - FOMC THE KOG REPORT – FOMC This is our view for FOMC, please do your own research and analysis to make an informed decision on the markets. It is not recommended you try to trade the event if you have less than 6 months trading experience and have a trusted risk strategy in place. The markets are extremely volatile, and these events can cause aggressive swings in price. A great week so far on Gold with our targets completing and the path working out how we hoped. We’re now just above that order region we wanted attempting to break above, so for this report we’ll keep it simple. Price rejects above in the 2435-40 region, potential for this to pullback all the way into the 2400 region, unless broken. That lower region is where we would potentially be looking to buy in again. Price pushes down, we’ll be looking in that region for a move upside. We have immediate support below 2415 which could be tapped but needs to cross below, otherwise, we’re likely going to hover up here, spike and then make the move. Wouldn’t recommend trading the event, we’ve done our trading for the day. Best to wait for the move to finish and then look for the entry from a decent level. Please do support us by hitting the like button, leaving a comment, and giving us a follow. We’ve been doing this for a long time now providing traders with in-depth free analysis on Gold, so your likes and comments are very much appreciated. As always, trade safe. KOG
OANDA:XAUUSD
by KnightsofGold
4
Pre-FOMC Rates Decision Analysis31st July (FOMC Decision Pending) DXY: Ranging between 104.20 and 104.55. If Fed makes no comment on rate cut, DXY could push up to 105.20. If Fed makes comment on rate cuts in Sept, DXY could push down to 103.65. NZDUSD: Buy 0.5930 SL 20 TP 50 (DXY weakness) AUDUSD: Sell 0.6450 SL 25 TP 90 (DXY strength) USDJPY: Sell 151.50 SL 70 TP 245 (DXY weakness) GBPUSD: Sell 1.28 SL 20 TP 65 (DXY strength & BoE decision tomorrow) EURUSD: Sell 1.08 SL 20 TP 55 (DXY strength) USDCHF: Sell 0.8820 SL 20 TP 70 (DXY weakness) USDCAD: Buy 1.3850 SL 20 TP 45 Gold: Needs to break 2425 to trade up to 2450 (DXY weakness)
TVC:DXY
by JinDao_Tai
2
ZW: Wheat to Rebound with Fed Rate Cuts and Dollar DevaluationCBOT: Wheat Futures ( CBOT:ZW1! ) On Friday, July 12th, the United States Department of Agriculture (USDA) released its latest World Agricultural Supply and Demand Estimates (WASDE). (Note: The WASDE report is published monthly and provides annual forecasts for global supply and use of wheat, rice, coarse grains, oilseeds and cotton, as well as the U.S. supply and use of sugar, meat, poultry eggs and milk. Today’s analysis will focus on wheat.) USDA’s balance sheet update for the 2023/24 US wheat crop showed a carryout of 702 million bushels (mbu), as exports were taken to 707 mbu. For the new crop, USDA raises the wheat stocks by 98 mbu to 856 mbu. Some of the increases was a larger carryover, but most came in the form of higher production. USDA raised the wheat crop by 133 mbu to 2.008 billion bushels (bbu). Harvested acres was raised from 38.0 to 38.8 million acres. Yield per harvested acres was raised by 2.4 bushels per acre (bpa) to 51.8 bpa. Winter wheat was up 46 mbu to 1.341 bbu, as the Hard Red Wheat (HRW) total was projected at 763 mbu (+37 mbu), with Soft Red Wheat (SRW) at 344 mbu (+2 mbu) and white winter at 234 mbu (+8 mbu). The initial other spring wheat figure was tallied at 577.8 mbu, more than 56 mbu above market estimate. Global wheat stocks were raised by 4.97 million metric tons (MMT) to 257.24 MMT, with a bulk from the US, as both Canadian and Argentine wheat production were raised. Wheat Futures drop across three futures markets, CBOT, KCBT and MGEX, after WASDE shows higher production. • Jul 24 CBOT Wheat closed at $5.38, down 16 1/4 cents, • Sep 24 CBOT Wheat closed at $5.50 3/4, down 20 1/2 cents, • Jul 24 KCBT Wheat closed at $6.04, up 12 3/4 cents, • Sep 24 KCBT Wheat closed at $5.67 3/4, down 16 cents, • Jul 24 MGEX Wheat closed at $6.21, unchanged, • Sep 24 MGEX Wheat closed at $5.97 1/2, down 21 1/4 cents The weekly CFTC Commitment of Traders report showed CBOT wheat speculative traders net short 69,137 contracts as of July 9th, a reduction of 4,837-contract on the week. In KC wheat, they were trimming 2,292 contracts to 40,811 contracts by July 9th. In my opinion, the futures market has quickly absorbed the bearish WASDE report. With wheat trading at historical low levels, a rebound may be brewing in the next few months. Traditionally, August is the time to hedge weather risks in agricultural commodities. If summer weather in the Midwest and Great Plain regions turns out to be less than ideal, the previously expected higher yield will have to be adjusted downward, reducing total production. In today’s market, how could the expected Fed rate cuts impact commodities? Last Tuesday, July 9th, Fed Chair Jerome Powell appeared in a Senate Banking, Housing, and Urban Affairs Committee hearing on Capitol Hill. The Fed Chair expressed concern that holding interest rates too high for too long could jeopardize economic growth. “Reducing policy restraint too late or too little could unduly weaken economic activity and employment.” “At the same time, in light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face,” he said in prepared remarks. “Reducing policy restraint too late or too little could unduly weaken economic activity and employment.”. The prospect for quicker rate cuts increased immediately after these dovish remarks. According to CME Group FedWatch Tool, the probability of a 25bp rate cut in September is now 90.3%. Futures traders look for 3-4 rate cuts by the end of the year, with a 53.8% probability for the Fed Funds rate lowering to the 4.25%-4.75% range. (www.cmegroup.com) Would the lower interest rates be bullish for commodities like wheat? Firstly, lower interest rates will reduce borrowing costs. This will help business grow, with more jobs, income and consumption coming along the way. At the end, it will help increase the demand for commodities such as wheat. Secondly, as a major agricultural commodity, wheat is priced in the US dollar and traded in the global market. In previous writings I explained that lower interest rates would result in currency depreciation, as prescribed by the Interest Rate Parity theory (IRP). For foreign buyers, dollar depreciation means an appreciation of their local currency. The cost of importing wheat will be lowered when converted in local currency. Lower costs help increase the demand for wheat. Trading with CBOT Wheat Futures The 3-year price chart for CBOT wheat futures shows three distinguished patterns: • From February to April 2022, wheat prices nearly doubled from about $7 to $13. This was driven by geopolitical crisis and the fear of global supply shortage. • From May 2022 to July 2023, the Fed implemented 11 consecutive hikes, which helped cut wheat prices by half to about $6. • From August 2023 to present, as the Fed kept interest rates unchanged in seven FOMC meetings, wheat prices moved sideways in the $5.50-$7.00 range. As we can see here, Fed policy and geopolitical crisis have an outsized impact on wheat prices, as compared with fundamental supply and demand. In my opinion, the supply and demand factors are already priced in the market. However, the impacts from Fed rate cuts and outcome of the upcoming presidential election are not yet fully grasped by the market. The expected Fed loosening cycle would have the opposite effect of the Fed hikes. Wheat prices could potentially move up the $7.00-$9.00 by 2025. On July 12th, the March 2025 contract of CBOT wheat futures (ZWH5) settled at $5.975 per bushel. Each contract has a notional value of 5,000 bushels, or $29,875 at market prices. Buying (long) or selling (short) one contract requires an initial margin of $2,000 at the time of writing. CBOT lists 15 monthly contracts of Mar, May, Jul, Sep, and Dec. Wheat traders could take up positions two years from now, for the month of July 2026. Trading on the 3rd or 4th contract month would satisfy the liquidity requirements while allowing time for market-impacting variables to change, based on my experience. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CBOT:ZW1!Long
by JimHuangChicago
1
UNEMPLOYMENT / FED FUNDS RATE - PLAY BOOKUNEMPLOYMENT / FED FUNDS RATE - PLAY BOOK This post I intend to explore with you the cyclic relationship we can observer between: 1) US Unemployment Rate (BLUE), 2) 21D SMA (Orange) based in unemployment data, and 3) Resultant Recessions (Gray Bars) Historically, the general play book / sequence of events suggest once we break the 21 Day SMA (orange line), it is the start of unemployment unwinding and we lead into a recession. As the 'FED FUNDs RATE' is the artificial tool used to 'Guide' the credit market (politically correct explination), the obvious question then is; "What is the relationship / behavior of interest rates historically with this trend? Are we experiencing similar behaviour to the last 30 - 40 years?" The Red line show the FED funds rate on the chart. The below sequence of events show how these variable play with each other: The story goes: the FED increases the 'FED FUNDS RATE' (aka interest rates) because low periods of interest rates is resulting in a 'HOT' economy and causing inflation (i.e. market forces the FEDs hand to raise interest rates as the return for lending money to credit markets does not match the current risks). At some point during interest rate rises: 1) FED rise in interest rates is held constant (the lagging effect of higher rates start to hit the economy resulting in slowing down economic activity - i.e. spending) 2) Record low unemployment starts to rise (Cross of 21D SMA historically has signaled a point of no return) 3) Fed start to drop rates due to employment increase, deflationary market disruption 4) Unemployment begins to rapidly increase 5) Recession WHERE ARE WE NOW? According to this play book, we are in currently in step 2 and approaching point 3 . If you find this post interesting, you may find my discussion around the 2 Year Treasury Bond Yield vs FED Funds Rate interesting. This relationship is what I was using to speculate interest rate rises before they happened, and that they would be higher than people were expecting when there was talk of rates rising... The Market in all cases will eventually win...
FRED:UNEMPLOY
by Brodie
1
July Economic Calendar - IMPORTANT EventsIt’s going to be a busy month for the Chair of the Fed (Jerome Powell), who delivers a speech today and then will testify later this month in front of Congress to provide updates on monetary policy decisions. Will we gain clarity on the timing of potential rate cuts this year, and if they are even being considered? Crypto in June - How BTC responds June saw significant volatility across the crypto market. Bitcoin fluctuated between price highs above $70,000 and lows of around $60,000, with substantial movement around 4 June when Bitcoin peaked above $71,000, before declining on 6 June and continuing a downward trend and falling to levels last seen in May. ETH and altcoins followed along, with Ethereum down approximately 11% in June . Pulling it back to the US markets, some analysts argue that the fluctuations was largely driven by uncertainty surrounding inflation data. The drop to $60k could likely be due to the reducing likelihood of multiple interest rate cuts by the Federal Reserve Bank this year, contrary to earlier investor anticipations (causing hesitation and a cautious approach). Upcoming Events that could Affect Markets: ❗ Tuesday, 2 July 📢 Jerome Powell speech Federal Reserve Chair Jerome Powell will provide an economic overview today, outlining current monetary policies. He will answers questions and the outcome of this speech can significantly impact financial markets and investor sentiment. ❗Wednesday, 3 July 📢 Federal Open Market Committee (FOMC) The upcoming FOMC minutes are expected to provide more details on the Federal Reserve's decision to keep interest rates unchanged, and its revised economic projections. Key points could include the reasons behind the more hawkish stance on rate cuts, and the implications of updated forecasts for unemployment and inflation. ❗Friday, 5 July📢 US Unemployment Rate The US unemployment rate is a key indicator of economic health, influencing consumer spending, corporate profits and the social sentiment. During May the US jobs sector added 272,000 jobs, further casting doubt on the rate cuts in the US this year. ❗Tuesday, 9 July 📢 Fed Chair Powell testimony Jerome Powell is set to discuss the state of the economy, monetary policy decisions, and also outline future policy intentions in his twice-a-year testimony in front of Congress. ❗Thursday, 11 July 📢 US Inflation Figures The year-on-year and month-on-month inflation numbers provide crucial insights into purchasing power trends, influencing market expectations for interest rates and the overall economic outlook. The Consumer Price Index (CPI) climbed 0.2% in May, the smallest advance in core CPI since October 2023. Take extra caution when over the next few weeks as volatility will be likely depending on the outcome of these events. _______________________ ECONOMICS:USINTR FRED:UNRATE ECONOMICS:USIRYY
FRED:SP500
by CryptoCheck-
The US Election and Possible Fed Rate DetourCBOT: Micro 2-Year Yield ( CBOT_MINI:2YY1! ), Micro 10-Year Yield ( CBOT_MINI:10Y1! ) Last Thursday night, I watched the first Biden-Trump presidential debate live on TV, along with tens of millions of likely voters of the 2024 US presidential election. Who won the debate? According to the exit poll conducted by 538/Ipsos: • 60.1% of the likely voters being polled said former President Trump performed best; • Only 20.8% said President Biden performed best at the debate. However, the debate may not change the minds of many voters. • Biden gained support from voters who would likely vote for him, from 46.7% before the debate, to 48.2% after that; • Trump also gained support modestly, from 43.5% to 43.9%; • Robert Kennedy, Jr., an independent presidential candidate who did not participate in the debate, saw his support increase from 17.3% to 18.4%. What mattered most to voters? • Inflation or increasing costs is the No. 1 issue, called out by 50% of the likely voters; • Immigration came in 2nd at 37%, while Political polarization is the 3rd at 25%. The second and final presidential debate is scheduled on September 10th. Ahead of this, the Republican National Convention will be held on July 15th-18th. Donald Trump is likely to be nominated as the Republican candidate for the US presidential election. The Democratic National Convention will be held on August 19th-22nd. After his poor performance in the first presidential debate, we are uncertain if President Biden will be nominated, or replaced by an alternative candidate. On TradingView, our focus is always on trading and investing. However, geopolitics plays a crucial role in shaping global markets, influencing economic growth, investment flows, and asset prices. Understanding the complex interplay between political events and market dynamics is essential for investors seeking to navigate the ever-changing landscape. That being said, I would like to outline these generic scenarios: • If President Biden is re-elected for a 2nd term, he would likely maintain similar political and industry policies which we have been seeing in his first term; • If Former President Trump returns to the White House, we would likely see huge reversal in the policies enacted by the current Administration. What Donald Trump did in his first term will be a good indicator for what lies ahead. Looking across asset classes, I think the interest rate regime will be impacted the most in a Trump-winning scenario. The US Interest Rate Regime In the 21st century, we have four US presidents so far: George W. Bush (2001-2008), Barack Obama (2009-2016), Donald Trump (2017-2020) and Joe Biden (2021-2024). The US Federal Reserve also has four Chairmen: Alan Greenspan (1987-2005), Ben Bernanke (2006-2013), Janet Yellen (2014-2017) and Jerome Powell (2018-2026). I observe that Fed Funds Rate exhibited unique pattern under each president. Let’s look at President George W. Bush first: • The younger President Bush came into the White House when the Internet bubble just busted, and the Enron and WorldCom scandals shook the stock markets. “9/11” occurred less than 8 months into his presidency. • Fed Chair Alan Greenspan executed steep rate cuts to rescue the economy in crisis, pushing the Fed Fund rate down to 1% from 6.5%. • By 2004, the economy has recovered and became overheated. To combat inflation, Chairman Greenspan hiked interest rate all the way to 5.25%. • High interest rates busted the subprime housing market, triggering the Great Recession of 2008. New Fed Chair Ben Bernanke steered the country through the financial crisis, and lowered interest rates to 0-25 basis points. The Obama Administration (2009-2016): • President Obama inherited the Zero Rate environment, and throughout most of his 8-year presidency, interest rates largely stayed at the ultra-low levels. • In the 3rd year of her Fed Chair tenure, Janet Yellen began raising interest rates, from 0-25 bps to 1.25% by the end of her four-year term. The Trump Administration (2017-2020): • In November 2017, President Trump nominated Jerome Powell as new Fed Chair. • Chairman Powell continued the rate hike and raised the Fed Funds rate to 2.25%. • President Trump openly criticized his Fed Chair and intervened central bank policy. • Under great pressure, the Fed lowered rates in 2019. With the pandemic sending the economy into a free fall, Fed Funds rate was back to 0-25 bps by April 2020. The Biden Administration (2021-2024): • During the pandemic, a global supply chain bottleneck pushed US inflation to a 40-year-high at 9.1% by July 2022. • Albeit initially assessing the inflation as transitory, the Fed launched a series of rate increases beginning March 2022, pushing the Zero Rate to 5.25-5.50% by 2023. • While the US CPI came down to about the 3-3.5% range, the Fed was hesitant to lower rates too early. It had maintained the current rate in the last seven FOMC meetings. As we observed from the above, Donald Trump strongly believes that high interest rates would hurt the economy. He would go out of his way and convince the Fed to lower rates. What he considered “too high” was 2.25% in 2018. The Fed Funds rate is now more than doubled at 5.25-5.50%. In my opinion, in a Trump-winning scenario, he would call for the Fed to lower rates as soon as he returns to the White House. The Fed would cave in again, and quicken its rate cut schedule. Trading with CBOT Micro Yield Futures For someone who shares my view of aggressive rate-cut schedule under a new Trump Administration, he could express it by trading with CBOT Micro Yield Futures. Unlike bond futures, Micro Yield contracts quote the respective interest rates directly. A lower interest rate means lower futures prices. Last Friday, the August contract of Micro 2Y Yield futures (2YYQ4) were settled at 4.628%. Each contract has a notional value of 1,000 index points, or $4,628 at the current price. To buy (long) or sell (short) 1 contract, a trader needs to deposit an initial margin of $330. The August Micro 10Y Yield (10YQ4) settled at 4.318%. Notional value is 1,000 index points or $4,318. Initial margin is $320. In my opinion, rate cuts are coming, but the timing is uncertain. At what point the presidential pressure will cause rate cuts to speed up is also uncertain. To counter the uncertainty, a trader could use a Futures Rollover strategy. This is to maintain a Short position on Micro Yield Futures over time. When an existing contract is about to expire, we could close the position by buying the same contract, with the long order offsetting the short position. Meanwhile, the trader could enter a Short position with the newly listed contract. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CBOT:ZQ1!Short
by JimHuangChicago
4
USD/CAD Pressured but Policy Divergence Still FavorableUSD/CAD has entered its third straight losing week and faces renewed pressures today after the upside surprise in Canadian inflation. Crucially, Core CPI accelerated 1.6% y/y in May, snapping its five-months declining streak. The Bank of Canada had slashed rates earlier this month, for the first time four years and had hinted at further easing if inflation continued to decelerate. But today’s hot CPI report, casts some doubt over the disinflation process and the policy path. The pair remains is risk of bigger decline below the 38.2% Fibonacci of the December-April advance. Sustained weakness towards and beyond 1.3419 has a higher degree of difficulty though. However, today’s hot report is not the end of the disinflation process and is likely not enough to bar further rate cuts by the BoC. Its US counterpart meanwhile is reluctant to pivot due to inflation persistence and Fed officials see just one cut this year, despite more optimistic market pricing for two moves. This monetary policy divergence remains a tailwind for USD/CAD. On the technical front, the pair has already defended the critical 38.2% Fibonacci and another bounce off would reaffirm the upside bias and allow the bulls to push for new 2024 highs (1.3846). Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
Long
by FXCM
1
Dollar Winning Streak Extends Into Fifth Week! Time to Go LongI wanted to share some exciting news from the forex world: the dollar has extended its winning streak into the fifth week! 🎉 A key gauge of the dollar's strength continues to rise, driven by the ongoing uncertainty surrounding the timing of the Federal Reserve's first interest-rate cut. With the yen showing signs of weakness, the USD is shining brightly on the global stage. This is a golden opportunity for us traders to capitalize on the dollar's momentum. If you haven't already, now might be the perfect time to consider going long on the US dollar. 🌟 Why should you consider this move? 1. **Strong Performance**: The dollar's consistent growth over the past five weeks clearly indicates its robust performance. 2. **Market Uncertainty**: With the Fed's interest-rate cut timeline still unclear, the dollar is likely to remain strong in the near term. 3. **Yen Weakness**: The yen's current weakness further bolsters the USD's position, making it an attractive option for traders. Don't miss out on this opportunity to ride the wave of the dollar's success! Dive into the market and make the most of this winning streak. 💪 Happy trading, and here's to continued success in all your endeavors!
TVC:DXY
by bryandowningqln
The Printing Company- how it works : - Imagine you can create apples, and that you are the only one in the world able to do that. - So if you create 100 apples, you will make them more rare and unique, so maybe you can sell them for 10$ each one. - So now imagine you create 10,000,000,000 apples, you will have more apples than peoples need to eat, so you will have to sell your apples 0.0001$ - Anyway you don't really care about your apples price goes down because, you can create how many apples as you want, and the world population is growing. - This is exactly the same for the US Dollar : -- Less they print paper, less life is expensive, because we get some kind of USD rarefaction. -- More they print papers more the dollars flood the world, it makes it weak, then you need more papers to buy your home, a new car or food. -- Flooding the world with USD make everyone dependent on USD. - So in graph you can see how many dollars they created post crises 2007 and for Pandemic Covid in 2020. - So what is the situation right now : -- Basically they stopped to print ( that's the main reason DXY Pushed up. "Dollar rarefaction" ) and world economy crashed ( Forex, Stocks , Cryptos ) . -- In time they will have no choice to print again because their system is based on a greedy model. - What you see is the just top of the iceberg, the Fed is a mosquito if you compare it to the BIS ( Bank for International Settlements). - Actually controlling the flux of the creation of the dollar is just controlling the world system, it's a kind of tax form that you don't see, but you pay it much more than you think with inflation. - USD paper money system will end sooner or later for a new monetary model called CDBC. - it will be worst than you think as they will control everyone having a phone on their hand. - The Only way to to counter them is to buy Bitcoin because of his real disinflationary mechanic. - There's no other way to counter the system right now. Happy Tr4Ding !
ECONOMICS:USCBBS
by thecryer
7
Bitcoin PA and the FED Rate rises History since 2021 The chart explains itself really but we can see that BTC PA has not been effected Directly but more by the impact on other organisations, Mostly Banks. What will be interesting to see i nt eh coming months, is what happens when the FED curs rates, probably in September 2024. On average, when the FED Pivots, Stocks fall...people tend to forget this. We shall have to wait and see if Bitcoin can ride it out, thoguhj I feel ETF's have changed the game a LOT
BITSTAMP:BTCUSD
by Orriginal
Fed decision time: Rate cuts before Nov election? The U.S. Federal Reserve is anticipated to maintain the federal funds target range at 5.25%-5.5% when officials conclude their two-day meeting on Wednesday. Investors will be scrutinizing the statement to learn when the central bank might eventually reduce its rate and the potential frequency of such cuts this year. Market expectations suggest a possible rate cut in mid-September, 2 months ahead of the November 5 presidential election. Eswar Prasad, a professor at Cornell University, noted that the recent May jobs report likely ruled out a rate cut in July, while Adam Posen, director of the Peterson Institute for International Economics, goes even further, suggesting that the robust U.S. economy diminishes the likelihood of a pre-election rate cut. The Fed has rescheduled its November meeting to occur post-election, a move reminiscent of 2020. In a letter addressed to Fed Chairman Jerome Powell, three Democratic senators, including Elizabeth Warren, have called for rate cuts as soon as possible. "The Fed’s monetary policy is... driving up housing and auto insurance costs—two of the key drivers of inflation...”. Former Fed Vice-Chair Donald Kohn asserted that Chair Powell has consistently maintained that decisions are driven by economic conditions rather than political considerations, expressing confidence that this principle will be upheld in the coming months.
TVC:DXY
by BlackBull_Markets
Yield Curve Inverts Further on Rising Recession Risk As the tides of economic fortune ebb and flow, a spectre of recession looms over the horizon, whispering in the rustling of Treasury yields and the shifting sands of macroeconomic indicators. Recent economic data has painted a complex tableau of financial uncertainty. From declining PMI figures to a palpable deceleration in GDP growth, the economic forecast has shifted, stirring speculations that Fed may be forced to cut rates should the US economy slip into recession. Uncertainty around the timeline of rate cuts plus a potential looming recession are causing the yield curve to invert once more. Investors can obtain exposure using CME yield futures with a reward to risk ratio of 1.6x. RECESSION SIGNALS ARE FLASHING AGAIN Monetary policy winds are starting to shift once more. Recent economic data, including PMI figures, and a sharply weaker GDP in the US have led participants to increase their expectations that the US Federal Reserve (“Fed”) will have to relent and cut rates in 2024. Source: CME FedWatch Over the past month, probability of a rate cut at 7/Nov policy meeting has increased from 42% to 47%. More notably, the probability of a second rate cut at the 18/December policy remains slightly elevated over the past week at 35%. Typically, rate cuts suggest that the Fed is nearing its dual goals of maximum employment and stable prices. However, current expectations for rate cuts may stem from distinct reasons. Inflation remains persistent. Fed officials remain steadfast in their battle against inflation. But inflation is stalled at 3%. Higher rates are instead starting to impact economic growth. As rates remain high, the odds of an economic slowdown rise. On 4/June, job openings in the US fell to their lowest level in three years. On 31/May, the Chicago PMI indicator fell sharply into what is a recession territory. Q1 GDP was revised lower last month. Weak consumption data from the US has led to expectations that GDP growth during Q2 may remain slow. On a similar note, the household jobs survey showed full-time employment declining by 625k in May while part-time employment rose by just 286k. However, not all jobs’ data was negative. The establishment jobs survey showed strong job creation at 272k far higher than expectations of 182k. Additionally, wage growth was above expectations as weekly average earnings rose 0.4% compared to 0.2% in April. The household survey counts each individual only once, regardless of how many jobs they have. In contrast, the establishment survey counts employees multiple times if they appear on more than one payroll. Many observers have been calling for a recession in the US ever since the Fed raised rates to their highest level in 23 years. Yet the US economy has remained robust. Part of the reason behind the resilience has been the savings cushion that US consumers built up during the pandemic. However, with the strong inflation during the past year, most of that cushion has been spent. Consumers have already started to shift their consumption habits and credit usage (and delinquency) has been on the rise. Credit card delinquencies are at the highest level in more than a decade and personal savings built up during the pandemic have been exhausted. ECONOMIC DATA DRIVES BOND YIELDS LOWER AND RE-INVERTS YIELD CURVE Throughout the past 10 days, economic releases in the US have driven bond yields consistently lower. Recent non-farm payrolls data drove a rally in yields. Economic releases have also driven a decline in the yield spreads resulting in further inversion of the yield curve. Since the release of the PCE price index and Chicago PMI on Friday 30/May, the 10Y-2Y spread has declined by nine basis points. The 30Y-2Y spread has performed the worst since then as it stands ten basis points lower. Further, unlike the uptick in yields following NFP, the yield spreads continued to invert further, especially for the 30Y-2Y and 10Y-2Y spread. HYPOTHETICAL TRADE SETUP Historically, the yield spread between 10-year and 2-year Treasuries tends to normalize by the time a recession officially hits the US. Based on current trends, a recession, as indicated by GDP metrics, might not occur until early next year. Currently, the yield curve is deeply inverted, and recession signals are intensifying. Moreover, the possibility of a rate cut remains uncertain. This ongoing uncertainty about the policy direction is further exacerbating the inversion of the 10Y-2Y spread. Another factor to consider is the upcoming US elections. As the Fed strives to remain an independent authority, they may opt to avoid major policy moves before elections are concluded. This week is set to bring several key economic updates, including the May CPI report and the Federal Reserve's revised economic projections. These projections are expected to reveal that rate cuts, previously anticipated for 2024, might be delayed further. The volatility in economic data has made it challenging to assess the yield trends. Despite a general rise in yields, the yield curve continues to invert, particularly the 30Y-2Y spread, which has been the most adversely affected. This reflects ongoing investor concerns about long-term Treasuries as expectations for rate cuts are pushed further into the future. Source: CME CurveWatch Investors can obtain exposure to a further inversion in the 30Y-2Y spread using CME Yield futures. CME Yield futures are quoted directly in yield with a one basis point change in the yield representing a P&L of USD 10. As yield futures across various maturities represent the same notional, spread P&L calculations are equally intuitive with a one basis point change in the spread between two separate maturities also equal to USD 10. The hypothetical trade setup using the 30Y-2Y spread is described below. • Entry: -36.5 basis points (bps) • Target: -50 bps • Stop Loss: -28 bps • Profit at Target: USD 135 (13.5 bps x USD 10) • Loss at Stop: USD 85 (8.5 bps x USD 10) • Reward to Risk: 1.59x MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CBOT_MINI:30Y1!Short
by mintdotfinance
Where is the SPX most likely headed in the coming yearsAlthough it's hard to predict what the stock market will do in the future, there is already a clear consensus on what is likely to happen. In this chart, I have plotted most predictions from big investment banks like Goldman Sachs and Morgan Stanley to other investors like Michael Burry. I have also calculated the average of all the predictions and plotted it on the chart. I think the most likely scenario is that we retest the lows of the Corona Virus Crisis, and then we trade sideways from there (illustrated with the red arrows). There is also the probability that we bounce off the 3000 SPX as the consensus estimates and then trade sideways from there (illustrated with blue arrows). The main reason we might trade sideways for the coming years is because of a dilemma the Federal Reserve is currently facing. Having to fight a battle between high inflation caused by quantitative easing done during the Coronavirus Crisis, and fighting said inflation by raising interest rates which will make it harder to maintain its 30 Trillion dollars of debt obligations. Likely changing back and forth till there is a deleveraging of the whole system that will last at least 3 years. And since the markets are strongly correlated to what the fed does, this will be the most likely outcome. Let me know your predictions and see if you agree more with the blue arrows or red arrows.
SP:SPXShort
by Blasik
7
Bitcoin Marketcap v Federal reserve M1A nod to @unbeldi And a updated chart Swapping the Bitcoin price to marketcap over the M1 money As BTC is a Trillion dollar asset again and was invented to be peer to peer cash It's good to compare the ratio vs the dollar. And imagine one day in the future that it may dethrone the King. Since BTC is natively digital and global (M2 is slightly larger number and the more commonly used metric @ 20.86 Trillion) The number of coins I used for the 100k & 400k price projections was 19,791,006 If you wanted to check my maths This is the current and supply and the estimate of number of coins in 10 months time.
CRYPTOCAP:BTCLong
by BallaJi
1
Interest Rates look decently strongThe 2Yr yield has paced itself recently. The 10Yr #yield is picking up steam. Both went from a bearish moving average crossover, circles, to a bullish (Data not seen here, more info in profile) 2Yr is almost @ last years bank failure rates. 10Yr has been trading mostly above. Weekly 2Yr looks like it wants to skyrocket, if breaking out of the ascending triangle pattern. 10Yr has been treading higher, along its trend line. TVC:TNX Fed is in a catch 22. Cannot raise rates, more things will break BUT it but cannot lower, inflation.
TVC:US10Y
by ROYAL_OAK_INC