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Does "News" Impact Price Behavior? 🐒We can Observe that After the 1st Quarter of the Year, January-March the price of Eurusd has increased. Now As we near the middle of the second quarter, I can't help but visualize a Breakout. Price is currently sitting at 1.102. So far price has respected the Weekly Level at 1.106. The High for the first quarter was 1.103. We have now spent quite a bit of time at these extreme prices. I can often observe price using News//Data Releases on Lower time frames as a boost. A Boost of momentum in the preceding direction. I can observe 3 Potential News//Data Releases causing and becoming a Catalyst to leave a Large Trading Range. 1. NFP 2. CPI 3. FOMC Interest Rates. Will FOMC provide the Volume? Do we have enough Liquidity? Or may price dip from here back to our 1.086 Weekly S/R Zone before increasing any further? My Bias is Bullish moving into FOMC. Safe Trading Everyone. Not Financial Advice. Educational Purposes Only.
Long
by ShrewdCatfx
How New Zealand's central bank have given up the fight... It's the 24th May 2023, 3pm local time. The Reserve Bank of New Zealand (RBNZ) have just increased the official interest rate by 0.25% to 5.50%, as expected. What happened next was not expected... The RBNZ announced that they currently have no intention of raising rates further and that the next rate change could possibly be a cut! What does this mean for New Zealand and the NZD? Central banks across the globe have been increasing rates over the last 12 months to tackle high inflation. In some countries, like the US, inflation has been coming down and is currently edging toward a 2% norm. For other countries, inflation has been much more stubborn. New Zealand is one of these countries with "sticky" inflation, which is currently sitting just below 7% and hasn't really budged over the last year. The RBNZ's main weapon to fight inflation is to raise interest rates. Until now, the markets have expected the RBNZ, along with other central banks, to keep raising rates in order to bring inflation down. New Zealand's central bank has announced they are no longer going to do this. So, what does this mean? Well, it means that high inflation could be a new norm for New Zealanders. The central bank is giving up the fight. High inflation has won. Inflation is here to stay! This is obviously not good news for the NZD, hence today's strong NZD sell off. High inflation combined with no more rate hikes, and poor PMI figures, may result in the NZD to continue to weaken longer-time. Could the NZD continue to sell off? The outlook doesn't look great for New Zealand, but this is not Brexit or a financial crisis. There are economic figures indicating good economic health for New Zealand, such as strong - relative to other global economies - GDP growth and low unemployment. The announcement of no more rate hikes could be a bearish driving force for the NZD, though. What does this mean for the rest of the world? The Australian Dollar (AUD) is strongly correlated to the NZD, meaning we could see the AUD fall also, which has already started. It wouldn't be a great shock, to see the Reserve Bank of Australia take a similar stance to their neighbours, which could see the AUD fall further. What could really shift the markets is if the RBNZ have set the tone for the rest of the Western world. Now that the RBNZ have given up, could other central banks do the same? This may result in downside moves for the Euro, British Pound, Rand, and other global currencies. How to trade the RBNZ's decision... The US continues to lead the way for the Western world with regarding to bringing inflation to a 2% norm. Canada is following a similar trend. Singapore is not too far off. Economies such as the Euro Area, the UK, Scandinavia, and South Africa continue to face an issue of stubbornly high inflation. These countries could take a similar approach to the RBNZ but it's way too early to tell. At the moment, rate hikes continue to be on the table for the foreseeable future. For me, the inflation trades seem obvious, buy the US Dollar and sell the NZD and AUD. If other central banks follow suit to the RBNZ decision, then selling the currencies related to those central banks is an obvious trade, especially the EUR, GBP, ZAR and SEK.
Short
by Samuel_Morton_Trader
💵THE WORLD IN DEBT💵 ☑️The fact that the whole world is in massive Debt that can not be repaid is a buzzphrase that was around for like 20 years already. 20 years passed and nothing bad has happened, so what to worry about? In fact an entire political and economic movement called MMT or a modern monetary theory emerged claiming that government debt does not matter and that we can, you guessed it, print as much as we need(kinda) ☑️But the size of the debt itself was never really and issue so long as the government or a big company could service the debts. That is if their cashflow was positive enough to cover the interest payments on the debt. Now however, as the FED is raising rates, this is an issue. ☑️And its not the USA who’s pile of debt we need to be worried about(they are borrowing in the currency they can print themselves, remember?) but rather the rest of the world and the companies. The majority of developing countries don’t have the internal capital required for development, so they need to borrow on the international financial markets in Dollars. And these counties are now facing a perfect storm of a higher cost of new borrowings in Dollars, lower revenues from foreign trade due to recession(and yes we are in a recession, Wake up) and the massive energy and food costs due to the war in Ukraine and the problems caused by the supply chain crisis. ☑️Most big public companies aren’t doing great either. The share of listed companies with the debt servicing costs higher than the profits is now more than 25% and if we exclude the accounting and financial engineering shenanigans, it is save to say that this share is close to 30%. ☑️So the third of the economy is outright insolvent. Multiple countries will either default soon or will at least be plunge into civil and economic unrest and go the way of Sri-Lanka, Pakistan and others… And Jerome Powell said that he aint stopping and that the Fed funds rate should go up by at least 2 percentage points more. So instead of the collapse of the USA, we are likely to see a chain reaction debt crisis In the rest of the world unless the FED changes its mind… I Hope you guys learned something new today✅ Wish you all Best Of Luck👍 😇And may the odds be always in your favor😇 Dear followers, let me know, what topic interests you for new educational posts? explanation
INDEX:BTCUSDEducation
by SignalProvider
4
NO MORE MONEY?Rates on short-dated bills have soared ahead of the so-called ‘X-date’ early next month, after Treasury Secretary Janet Yellen warned last week that the government could run out of cash as soon as June 1. It's worth noting that the debt ceiling issue has arisen multiple times over the years, and each time it has ultimately been resolved. While it's impossible to predict the outcome of the current situation, historical precedent suggests that it is likely to be resolved eventually. For investors with a high risk tolerance, buying short-term T-bills now could be a smart move that provides a higher rate of return than longer-term Treasury bonds. One notable example of a similar situation occurred in 2011, when the US government faced a potential default due to a political standoff over raising the debt ceiling. The prospect of a default caused investors to fear that the government would not be able to meet its financial obligations, leading to a rise in short-term interest rates. In the weeks leading up to the deadline, yields on one-month T-bills increased from around 0.02% to over 0.25%, while yields on three-month and six-month T-bills also rose significantly. However, once the debt ceiling was eventually raised, the yields on these short-term Treasuries returned to more typical levels. Investors who had bought short-term Treasuries during this period would have seen a significant increase in yield, providing a lucrative opportunity. Similarly, the current debt ceiling issue could present a similar opportunity for investors who are willing to take on the associated risk.
TVC:US10Y
by optionsswing
GBPUSD Trading Near 12 Month HighHi Traders! We are trading near May 23rd 2022's high of around 1.26632, hence why we have been struggling to get any momentum. The market is currently undecided as to where to go from here. Due to the market being at the highest point for almost 12 months, there is bound to be some resistance at this level. We also had an inverse head & shoulders pattern forming over this time, so this could also be a sign of a reversal to the very long term bearish trend. Fundamental news will also have a key part to play as to where we go from here with the BoE Interest Rate Decision and BoE MPC Meeting Minutes coming out later today. Please do not forget to like, comment and follow. We appreciate your support. BluetonaFX
by BluetonaFX
2
Interest will go upInterest rates are likely to go up. FED will remain focused on controlling inflation. Job losses we are seeing are not enough to stop FED action, as FED believes these are not numerous enough to impact economy. FED also doesn't believe recent bank issues are a contagion. This idea is an expression that interest rates will go up, therefore best play is to go long "interest rate" in whatever way you can, through interest rate swaps or whatever. Assume interest rate rise
TVC:US10Y
by iequalss
FED On Pause? Watch Gold! Some important Fed's Powell signals a potential end to hikes. - The staff predicted a mild recession in general however, my forecast is for modest growth, not a recession. - A decision on a pause was not made today. -The economy is likely to face headwinds from credit conditions. - Policy is having an impact on housing and investment. If FED is really done soon with rates then Gold can easily break higher if we consider that despite higher US yields since end of 2021, Gold is trading close to ATH. I think there is room for wave 5 to $2200/$2300. Near-term support od dips is at $1970 and $1940 I talked about this one in our webinar today her eon Tradingview.
SAXO:XAUUSDLong
by ew-forecast
May FOMC announcment 🫨Do we have enough steam to take us to 1.11500? Anticipating that rates stay the same and that the May Decision is Bullish. Planning since Staurday this past weekend that we may be onto something here. My Belief is that May Decision is viewed as an Optimistic data point. Preparing for a fall to 1.086 if not the case. Safe Trading. I'll be looking for opportunities about 1hr after the announcment once we have momentum and determined the direction with lowerd lot size and FOLLOW you TRADING PLAN. Okay good luck and safe trading.
Long
by ShrewdCatfx
2
Q. Why when the FED raises interest rates does the rand weaken?A. Whenever you think about a country raising interest rates, we need to consider what happens to investors and where they are more likely to deposit their money. So, as we are expecting an increase in interest rates this month from the FED, there are a few reasons why we can expect the rand to weaken further: Here are three to consider… Reason #1: Investors flock to the US Dollar When the US Federal Reserve raises interest rates, it becomes more attractive for investors to hold or buy US-dollar denominated assets. That’s because they know they’ll receive a higher rate when they invest in it. This will also lead to a rise in the US dollar and a drop in smaller currencies (like the rand). Reason #2: US Dollar is still the fat cat of reserve currencies A rise in US interest rates may lead to higher borrowing costs globally. This is because the US dollar is still the world's primary reserve currency. When we think of gold, Bitcoin and other precious metals, we think of how it’s priced in US dollars. The problem with this, is that emerging market countries, like South Africa, will face higher debt-servicing costs as the US interest rates continue to move up. And this could continue to put pressure on their economies which will lead to a depreciation in the rand. Reason #3: South Africa is still a big exporter Also, South Africa remains one of the major exporters of commodities. And the value of the rand is linked to fluctuations in commodity prices. So, when US interest rates rise, this leads to a stronger US dollar. And can cause commodity prices to drop (as they are generally priced in US dollars). As South Africa is a major commodity exporter, the lower commodity prices would have a negative impact in SA’s export revenue – which can in turn weaken the rand further.
Education
by Timonrosso
1
Market AnalysisUnemployment claims are lower than expected (down) GDP is only 1.1% (the dollar will rise slightly) Personal expenditures are fronted by 1%, soaring to 3.7% (bad) Core PCE increased from 4.4% to 4.9% (bearish) Analysis: The U.S. economy is worse than expected and has clearly entered a recession. However, inflation and personal consumption are set to soar, proving that QT isn't enough. After this data, big possibility for FED to raise more interest rate. The stock market and crypto will at least dump for another 10% or more. Personal market analysis, for reference only
Short
by INFINITY8CADEMY
Dancing on the Ceiling In recent days, a variety of technology stocks have surged as a result of robust earnings reports. Microsoft's impressive cloud and AI performance have been particularly noteworthy, leading to a ~8% increase in its stock value. The company was on the verge of breaking its single-day record for market capitalization growth. In contrast, cryptocurrency markets have experienced a far more substantial upswing than equities over the past few days. Bitcoin has once again spearheaded the crypto rally, as expectations for future rate hikes dropped substantially due to continuing cracks in the regional banking system. However, this time, the change in the narrative was triggered by a larger-than-anticipated decline in deposits for First Republic (FRC), which has inflicted severe damage on FRC’s balance sheet and will be difficult to overcome. On Tuesday, FRC's stock plunged by about 49%, followed by another 25% drop on Wednesday morning. In other news, the ongoing U.S. debt ceiling crisis presents a compelling and potentially precarious situation that warrants close attention. Earlier in January, the U.S. government reached its borrowing limit and has since relied on "extraordinary measures" to manage its cash flow due to the absence of new treasury issuances. As a result, the Treasury's cash balance has been steadily decreasing this year, and financial markets are becoming increasingly concerned as funds are expected to run out by June, potentially leading the government to default on its debt obligations. This scenario merits close monitoring, as evidence suggests that a technical default could trigger contagion effects, which, in a worst-case scenario, could potentially double the U.S. unemployment rate to around 7%. Furthermore, a divided Congress will make raising the debt ceiling particularly challenging for Democrats unless compromises are reached. Market apprehensions are evident in soaring credit default swap spreads—an indicator of the cost to protect against a U.S. government default—as well as the spread between 1-month and 3-month Treasury Bill yields (approximately 3.4% vs around 5.1%) widening. Recently investors have sought 1-month Treasury Bills that mature before the predicted exhaustion of government funds, causing the price of 1-month Bills to rise and their yield to fall. From a technical standpoint, Bitcoin has experienced a minor pullback from its local top of around HKEX:31 ,000 and has since tested the 50-day moving average before regaining some bullish momentum. In the event of another pullback, traders will likely watch for the 50-day moving average to serve as support once again. MA9 and MA50 are also beginning to converge, with a potential crossing of MA9 below MA50 imminent. This would be a bearish signal. When MA9 previously crossed above MA50, Bitcoin gained significant momentum, underscoring the importance of a potential crossing of MA9 below MA50. Looking ahead, key dates to monitor include May 3rd and 4th, when the upcoming FOMC meeting is scheduled. The Federal Reserve has already hinted at a further 25 basis point hike, which the market has likely priced in. Nonetheless, exercising caution is advisable, as the Fed may take unexpected actions during this meeting.
BINANCE:BTCUSD
by Coinrule
Inverted Yield Curve Starts in 2023 - Explained When the yield of the 3-month bond is higher than the 30-year bond yield, this is known as an inverted yield curve. It is a rare and unusual occurrence and we are seeing this today. This signals a potential economic recession in the future. An inverted yield curve suggests that investors have a pessimistic outlook for the future of the economy. They are willing to accept lower yields on long-term bonds because they anticipate a slowdown in economic growth. In contrast, they demand higher yields on short-term bonds because they expect the central bank to raise interest rates in response to inflationary pressures. An inverted yield curve can lead to a decrease in borrowing and lending activity, as it can make it more expensive for businesses and consumers to borrow money. This can result in a reduction in economic growth and can eventually lead to a recession. Some reference for traders: Micro Treasury Yields & Its Minimum Fluctuation Micro 2-Year Yield Futures Ticker: 2YY 0.001 Index points (1/10th basis point per annum) = $1.00 Micro 5-Year Yield Futures Ticker: 5YY 0.001 Index points (1/10th basis point per annum) = $1.00 Micro 10-Year Yield Futures Ticker: 10Y 0.001 Index points (1/10th basis point per annum) = $1.00 Micro 30-Year Yield Futures Ticker: 30Y 0.001 Index points (1/10th basis point per annum) = $1.00 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time 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_MINI:30Y1!Long
by konhow
The Fed Must Pivot When This Happens...We can try to predict when the Federal Reserve may pivot to a less hawkish stance by using charts. Below are some helpful charts. 1. Money Supply The chart shown above is a monthly chart of the U.S. money supply (M2SL). The white line shows the money supply over time. Below the white line is a stepped moving average (9 period), which I consider the 'steps of a debt-based economy'. In order for our debt-based economy to persist, the money supply must continue moving up these steps endlessly. For reasons beyond the scope of this post, if the money supply falls much below this level a financial crisis is likely to ensue due to credit and liquidity issues. Below are some examples in which money supply came down to the stepped moving average before climbing higher. Not even during periods of higher inflation did the Federal Reserve let the money supply fall below this level. Therefore, the closer the money supply comes to this stepped-moving average, the more likely we are to see the Fed pivot to a less hawkish stance. Since money supply is largely negatively correlated to the value of all assets priced in U.S. dollar, reaching this level may also be somewhat of a buy signal for these assets (e.g. stocks, Bitcoin). Indeed, the fact that money supply always goes up is a large part of the reason why the stock market always goes up, too. Whereas if inflation becomes so severe that it forces the Fed to take the unprecedented step of dropping the money supply below this critical level, then a financial crisis will likely ensue. Indeed, under the surface a crisis is already brewing. (You can see my posts linked below for more charts on this). 2. Eurodollar Futures It is generally accepted that the Eurodollar Futures chart is one of the best leading indicators for the Fed Funds Rate. (Don't know what Eurodollar Futures are? See the link at the bottom of this post.) Therefore, when Eurodollar Futures plateau or begin dropping, we can expect a Fed pivot. However, this assumes that the Fed Funds rate has actually reached the terminal rate implied by Eurodollar Futures, which has not yet happen because the Fed is so far behind the curve with hiking. Keep an eye on how markets react to quad witching on September 16th, the time at which stock-index futures, options on stock-index futures, single-stock options and index options simultaneously expire. This period has been known to generate significant volatility. See the bottom of this post for more information about quad witching if you're unfamiliar with it. 3. Yield Curve Inversion Usually around the time or shortly after the yield curve inverts, the Fed pivots to a less hawkish stance. Right now the 10-year and 2-year yields on treasuries are inverted. Below is a chart of the US10Y/US02Y ratio. In the below chart, I marked the points at which the Fed pivoted in the past (pivots were measured by marking the last date the Fed raised rates). The values that you see labeled on the bottom right are the values of the US10Y/US02Y ratio at the time the Fed pivoted in past hiking cycles. In the chart below, I zoomed into the current time. As you can see, the US10Y/US02Y ratio is currently below all the levels at which the Fed previously pivoted. Green is the highest ratio at which the Fed pivoted and red is the lowest ratio at which the Fed pivoted. The chart above shows that we are in uncharted territory in the scope of yield curve inversion that the Fed has created. The fact that the Fed has forced the yield curve invert to this extreme degree and has still not pivoted is likely reflective of one or both of the following hypotheses: (1) The Fed started hiking rates too late. (2) The factors of inflation from the demand side and/or supply side are worse than we experienced in the past (since at least 1988 -- the period covered by the data in the chart). Nonetheless, the Fed must pivot soon or risk causing a financial crisis. My hypothesis is that an inverted yield curve can have the effect, among others, of destroying money. Since some banks borrow at short term rates and lend at long term rates, an inverted yield curve makes this less profitable or even unprofitable. Therefore some banks will lend less. Since bank lending creates the most money, an inverted yield curve can decrease the money supply substantially. The Fed cannot let this monetary phenomenon continue for long without causing significant issues. 4. Inflation Of course the biggest consideration for the Fed is the rate of inflation. The next CPI report is not scheduled to be released until the morning of September 13, 2022, but we can use chart analysis to, with a high degree of certainty, predict the rate of inflation. The above chart is a chart of the price of gold (GOLD) multiplied by the Commodity Index Tracking Fund (DBC). This chart allows us to extrapolate both the supply and demand side of inflation to a high degree of certainty. It is a statistically valid leading indicator for the inflation rate. You can see how drastically it has fallen recently. You can also see how closely it matches the chart of the inflation rate on a lagging basis. For those interested in the statistics GOLD*DBC correlates to USIRYY as follows: r = 0.904, r-squared = 0.8844, p = 0 In the chart above I provide an even better correlation to the rate of inflation. In this chart I provide the total securities sold by the Federal Reserve as part of their overnight reverse repurchase facility, I then attempted to improve the correlation values by adjusting the value by using the price of gold as a multiplier. Although this may sound complex to those who are not familiar with the repo facility, in short it just represents the amount of dollars that the Fed is pulling out of the banking system. To diminish the effect of any non-inflationary factors that would cause the Fed to do this, I adjusted the value using the price of gold. Recently, the Fed has been pulling less dollars out of the system and on some days it has actually been putting more dollars back into the system. The Fed would not be putting more dollars into the system if inflation were still spiraling out of control. While anything can happen in the future, and additional inflationary shocks can occur, this equation gives us a tool to predict the rate of inflation before the CPI report is published. For those interested in the statistics, GOLD*RRPONTTLD correlates to USIRYY as follows: r = 0.954, r-squared = 0.94, p = 0 In the chart above, I've adjusted the values to match the inflation numbers as best as I could (I simply used a divisor that equates the peak values in both charts). It is far from perfect and it is definitely not something that you should use to trade on. The number that is actually reported by the government could be way different. The best that we, as traders, can ever do is use charts to try to predict what may happen, which is what I've done here. More information about Eurodollar Futures: www.investopedia.com More information about Quad Witching: www.investopedia.com
FRED:M2SL
by SpyMasterTrades
108
Bond Fund Entry Points Looking Attractive - Long Term As interest rates continue to rise, existing bond values have fallen over the last year and a half. It looks as though the Fed will continue to raise rates at a slower (25 bps) pace than last year, which will still create some downward pressure on bond prices. However, as prices are falling and yields are increasing, this makes these entry points extremely attractive for both risk management and tax advantaged yields. Once rates stabilize, bond pricing should as well and set up for a return to the mean. In this case, that would be 200 WMA, currently sitting at $59.22. This would be especially true if there is a scenario in which the Fed begins to lower rates in a couple of years. As mentioned in the title, this Municipal Bond Fund could be a great low risk place to park cash in the event of an economic downturn for long term portfolio stability and/or income generation. Bonds, while inherently boring, tend to out perform the market in poor economic conditions. This is a long term analysis, and will take time to fully play out (5-10 years). Bonds could be cool again come 2025 and beyond. Happy trading!
CBOE:HYDLong
by spaceboots