We're bringing ‘The Trade Off’ to TradingView! This weekly trading series features Blake Morrow (ForexAnalytix) and our very own Chris Weston, as they engage in an energetic discussion of the financial markets — what’s hot, what’s not.
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Global Head of Research Chris Weston is back with As Good as Gold, taking us through the Gold market and it core influences. Get a holistic overview of where Gold is possibly headed with both fundamental and technical analyses.
Arguably the focus last week was the incredible moves in the EU bond market, as the ECB opened the door to rate hikes in 2022 – the market has responded pricing 50bp of hikes this year from the ECB, with the deposit rate expected to rise to +61bp in 3 years. EUR was bid vs all currencies on the week, only outdone by the SEK.
On the week, the biggest absolute...
Everywhere we look we see a market has now priced in such an aggressive hiking cycle in the coming 12-36 months – in the US the markets are pricing 5 hikes over the coming 12 months – in the UK we see this also at 5 hikes, Canada 6.4 hikes, Australia 4.6 hikes, NZ 7.5 hikes and even in Europe the market is eyeing 35bp of hikes over 12 months.
The elephant in the...
With OPEC meeting out Wednesday both Brent and WTI crude are front and centre this week – we also know higher crude prices are key for inflation expectations, and the move into $90 has supported US 5Y5Y swaps at 2.48%.
Traders are buying into crude to hedge against sustainably high inflation, but It feels like the market is long of crude as a hedge against...
Lots of chatter in the market about the US yield curve headed ever closer towards inversion – clearly, much of this move has been driven by short-term rates which have seen 2yr Treasuries push to 1.19% (the highest since Feb 2020), with fed funds futures pricing close to 5 hikes through 2022.
I have shown the US 2s v 10s spread, but US 5s v 30s is certainly...
XAUUSD is testing the August 2020 downtrend and requires a close above 1850 to get the bulls excited – if gold is going to have a more explosive upside move it requires far greater involvement from CTAs (systematic trend-following funds) and FOMO buyers.
The near-term flow has been bullish, but the long-term downtrend could be an area of greater supply – a...
Rates and bond markets continue to dictate sentiment and selling across the bond curve has pushed yields to new highs (in this run) – in turn, the cost of capital rises and the present value of expected equity cash flow falls. The change in equity risk premium (ERP) offers equity markets a lower cushion which matters when valuation is still highly elevated –...
CADJPY is breaking out of its 91.75 double top and eyeing a move into the 138.2% fibo extension of the December rally at 93.30. Momentum traders should have this front and centre on the radar.
Momentum studies (ROC, RSI) highlight the strength of the move suggesting if price can print a daily close above the breakout point, then the risk of a move into 93.30...
Time for some mean reversion in GBPNZD after a very strong run into and above the 2-handle - we now see price closing outside of the Keltner bands, with various oscillators at extremes - the elastic band is primed with price finding supply into the July/Aug double top - a break of Friday's lows and we should see a move back into 1.9920/00, potentially 1.9800....
As we approach a world where the Fed look set to hike in March, with 3.4 hikes priced by Dec 2022- we are also now hearing an open discussion around allowing maturing securities on its $8.8t balance sheet to run off (QT) -so, it's worth going back to the Dec FOMC minutes for real insight.
With the market having had time to pour over the wording, it feels clear...
In an environment where companies like Nvidia and Microsoft are doing everything right, Alibaba (BABA) seems to be headed in the opposite direction. Granted, the investment cases are vastly different, but when you’re hot you’re hot and when you’re not the negative news is heard far more frequently.
When trading it often pays to follow the flow of capital, and...
With many debating if the Fed (and other central banks) are behind the curve, precious metals are finding good flow and hedging activity. As we know, in a truly bullish environment for gold, silver, platinum and palladium, if the market sees the Fed as dangerously behind the curve, and not taking notice of the ever deeper negative real rates, the hedge is precious...
