Introduction The current market scenario presents a unique potential opportunity in the yield spread between Micro 10-Year Yield Futures (10Y1!) and Micro 2-Year Yield Futures (2YY1!). This spread is reaching a critical price point of zero, likely acting as a strong resistance. Such a rare situation opens the door for a strategic trading opportunity where...
Why Interest Rates Matter for Forex Traders Delve into the intricate world of forex, where interest rates stand as towering beacons guiding currency movements and trader strategies. From the fundamentals of central bank operations to the subtle nuances of the carry trade, uncover how they shape the global financial tapestry, dictating economic outcomes and...
Using Interest Rate Parity to Trade Forex Interest rate parity stands as a cornerstone concept in forex trading, offering a lens to assess currency value shifts based on interest differentials. This article explains how traders can leverage this principle to make strategic decisions, delving into its mechanics, implications, and practical applications in the...
Why are US, UK, and EU bonds still crashing since March 2020? In this video, we are going to study the relationship between bonds, yields, and interest rates, which many of us find confusing. How can we understand them, and why are bond prices leading the yield, followed by interest rates this season? 10 Year Yield Futures Ticker: 10Y Minimum fluctuation: 0.001...
Introduction The E-mini S&P 500 Futures is a popular and widely traded derivative product. These futures are used by traders and investors to hedge their portfolios, gain market exposure, and manage risk. The Options Box Strategy is an advanced options trading technique that involves creating a synthetic long position and a synthetic short position...
The world’s financial environment has become incredibly tangled and multifaceted. The global availability of information to investors, particularly in rural areas, thanks to the internet, has caused investor sentiment to shift from an emotional response to an analysis and data-driven one. Inflation serves as a prime example of this. In the past, most individuals...
The USD/TRY has one of the highest Roll Over Interest out there should you choose to take on this highly volatile pair. It isn't so much that it is volatile, it has to do more with price just moves one direction, and that is up. The way we want to go is down (short) or at least sideways (ranging). Why is this interesting? It is because the Rollover Interest...
Introduction In the dynamic world of financial markets, Micro 10-Year Yield Futures stand out as a pivotal tool for traders and investors. These futures offer unique opportunities to navigate the complexities of interest rates, particularly in an environment influenced by key economic indicators. This article delves into how traders can leverage both fundamental...
Introduction Brief Overview In the complex tapestry of the global economy, few factors play a more pivotal role than interest rates. At its core, an interest rate is the cost of borrowing money, a fundamental element that influences economic activity. Governed largely by a nation's central bank, these rates are a powerful tool, used to control economic growth,...
We entered 2023 with a pessimistic consensus outlook for U.S. economic performance and for how rapidly inflation might recede. As it happened, there was no recession, and personal consumption posted sustained strength. Inflation, except shelter, declined dramatically from its 2022 peak. The big economic driver in 2023 was job growth. Jobs had recovered all their...
Real interest rate is the interest rate adjusted for inflation. Nominal interest rate is the reported rate, while real interest rate is the actual rate that the borrower receives after accounting for inflation. The formula for calculating real interest rate is as follows: Real interest rate = Nominal interest rate - Inflation rate For example, if the nominal...
Hey! Everybody wants to get rich. But not many from us know what it takes. In this article let's discuss Investing income from annual percentage yield (APY) . Key point is the percentage of income can be different from your location, but lets make our calculations from 8.0% APY. Why this strategy is Affordable for ALL? Well, for calculation I've used only...
Hey Traders So, I have been asked by many of my clients to explain the relationship between interest-rates and inflation and how to translate that information into their analysis. For this reason I put this little mini lesson together to explain: - The core role of the central bank - Reason and objectives for interest-rates and inflation - How you can use...
Forex trading, the largest and most liquid financial market in the world, offers endless opportunities for profit. Yet, success in this dynamic arena hinges on a solid understanding of fundamental analysis. In this comprehensive article, we will explore the most crucial forex fundamentals that every trader should grasp. We will provide real-world examples to...
How does the interest rate affect the markets? We often hear in the news that the market is rising or falling after decisions or some statements by the Fed. We also often talk about the dollar index, so let's use simple words and with a cheat sheet at the end of the video, I'll show you how it works SP:SPX BITSTAMP:BTCUSD What is the FED The Federal...
With the current aggressive interest rate hikes happening with some of the world's leading central banks due to inflation problems, we figured it would be an ideal time to discuss the carry trade. This post will go into further detail about the carry trade and how it works in the forex market. We will also discuss one of the most popular carry trades to take...
European currencies have been rebounding strongly versus the U.S. dollar since hitting bottom in late September 2022 during the Gilt crisis when yields on U.K. government bonds surged. The rally in European currencies accelerated in July 2023 following the release of the U.S. inflation statistics (Figure 1). Figure 1: EUR and GBP have rebounded strongly in...
♦️Navigating the world of forex trading can be both thrilling and challenging. While it may seem overwhelming to keep track of all the complex factors that affect currency movements, some key fundamentals can significantly impact forex markets. In this article, we will discuss three essential forex fundamentals: non-farm payrolls, interest rates, and central...