TVC:US10Y TVC:NYA A reminder that falling bond yields are synonymous with higher bond prices. In other words, a downtrend in yield equates to a bull market in bonds. In January, bonds were still in a technical bull market as defined by the broad declining channel that had contained the 40 year bull market. In March the break of that downtrend turned the macro...
Hey Traders, Massive week this week fundamentally for the Forex market. 3 big interest rate decisions being released so I thought there was no better time than now to have a chat about what it is, what it indicates and finally, how traders profit from it. Fed and BOE almost guaranteed to hike rates, RBA is sitting unsure. Have a watch of the video and I am more...
If you're trading this market right now you have to keep your eye on Interest Rates. Why? Interest Rates have the largest web in the market. They impact every market we trade (even crypto :) What rates are doing not only impact the markets we trade, they impact us in everyday life. In this video I go over the best way to trade interest rates and even if...
This is a simple study of how interest rates influence the market. I included 10 last values in my indicator. The base currency (GBP) is black. The second currency (USD) is red. Between June and December, FED (USD) increased the interest rates 3 times by 0.250 BoE (GBP) also increased the interest rates by the same number but only once. Obviously, this was a...
This chart shows three times during the past three decades in which the yield curve inverts. An inversion is when the rate of a shorter term debt security is higher than the rate of a longer term debt security. This is identified on this chart in 2000, 2006, 2019. Treasury Debt Securities: Bill; less than one year to maturity at issue. Note; greater than one year...
As individuals, we face decisions every day that implicate saving money for a future use or borrowing money for consumption. If we want to make an investment, one important task for us is the analysis of transactions with present and future cash flows. When we place value on any asset, we are trying to determine the worth of a stream of future cash flows. Money...
Hello fellow traders and dear padawans. The equities market has been hit very hard the past 3 weeks or so, specially growth stocks. I think it is important to address what is happening behind the scenes that caused the selloff in the equities market so that many of you can better understand what is going on. This is a very basic explanation of macroeconomics and...
Bull markets tend to follow a drop in CPI, once the deflationary relationship ceases and goes back into inflationary mode. As it takes additional "devalued currency" to acquire the consistent amount of the equity in relation to it. In addition, with low rates, this creates opportunities to take on debt (with equity as well) such as a home, as the loan itself will...
One of the main economic indicators for currency valuation is the real interest rate differential between the two countries / currencies. The large flows of fixed income always go to where there is the highest real yield, interest rate discounted from inflation. The carry trade. It is possible to see in the USDCAD example on the graph the great correlation...
Notice the downward trend in the US10Y since the 80's, while government, corporate and consumer debt has exploded to all time highs. The achilles heel of massive debt levels are high interest rates, which end up causing slowed growth and economic contraction. With ever higher levels of debt, the level of interest required to put the economy in pain falls over time...
The US fiscal deficit for the fiscal year 2018 was just reported to have increased to $779 billion, or approximately 4% of GDP for the period. As Reuters notes, the deficit has been the largest reported since 2012, during a time when elections were coming up and the economy was still at a low interest rate environment and perhaps also in need for more government...