Risk management rules
1. Maximum risk is 120 points.
2. Risk 2 percent of your account balance per trade.
3. After 3 consecutive losses stop trading for the day.
4. Daily maximum drawdown is 5 percent of the starting balance of the day.
5. After 3 days of consecutive losses stop trading and take a 2-day break.
6. Overall drawdown is 20 percent of the initial...
Consensus data,
Headline inflation 3.3, Core CPI 4.8
Scenario 1
If the data prints higher than expected that is core CPI at 5.0 and Headline inflation at 3.5 market participants might interpret inflation as being sticky this will influence them to price for another rate hike either in September or November pushing the fed funds rates to the range of 5.5 – 5.75...
What is the FED view on inflation? Does it expect it to rise compared with June report?
What is the FED view on fed funds rate? Does it expect a raise or fall compared with June report?
Hawkish Fed
FOMC is made up of 18 members.
• More than 10 members expect core PCE to be more than 3.6 in 2024. Inflation will more likely remain sticky and they will keep...
The US economy is showing resilience especially in the services sector. The US consumer sentiment is optimistic, being supported by wage gains and falling inflation expectations. The core PCE is at 4.6 percent which is above the 2 percent FED target. Canada inflation is falling faster than the US inflation currently at 3.2 percent which is relatively close to BOC...
Currencies have a positive correlation with expected future interest rates. Bond yields on the short end of the curve are primarily driven by interest rate expectations which means that short-term bond yields embed expected future interest rates. Currency pairs represent two nations so it’s imperative to compare the two nations' bond yields.
Interest rate...
