Don't Miss FOMC This Week
Yes, it's time for another FOMC rate decision, and this one is going to garner much attention for its potential impact on the bond market and thus its impact on the Dollar, equities and precious metals.
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We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence. Learn more at our website here: https://financialsource.co
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For the past few weeks, the only game in town has been the moves in global bond yields, with those in the US leading the way higher. Going into the year it's not like market participants didn't expect yields to rise, it was a major consensus view.
So, why all the fuss about the move if it was expected to happen? The move higher itself wasn't really so much the concern as the pace of the move, which caused a sharp rise in bond market volatility that spilled over into other major asset classes.
According to recent FED communication, they have not been too worried by the rise in bond yields as they reflect a market pricing in much better growth prospects and cyclical rising inflation (as opposed to secular rising inflation). The challenge has been the sharp repricing in interest rates.
We've seen interest rate markets price in much faster policy normalization and reflect much tighter financing conditions with Eurodollar futures pricing in just over 3 rate hikes for the FED by September 2023, versus pricing in less than one at the end of Dec and just over one at the start of Feb for the same futures contract.
So, the big question this week is whether the FED steps in to calm things down or whether they will take another nonchalant view of the recent price action and risk a further tightening of financial conditions.
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Highlights of the video:
00:18 – Current Baseline
02:37 –Expectations for the upcoming week
07:22 – Sentiment Shifts & Trade Plan
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If you find these weekly analysis and trade ideas useful, you’ll love Financial Source. There’s a link below were you can learn more about it
https://financialsource.co
----
We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence. Learn more at our website here: https://financialsource.co
-----
For the past few weeks, the only game in town has been the moves in global bond yields, with those in the US leading the way higher. Going into the year it's not like market participants didn't expect yields to rise, it was a major consensus view.
So, why all the fuss about the move if it was expected to happen? The move higher itself wasn't really so much the concern as the pace of the move, which caused a sharp rise in bond market volatility that spilled over into other major asset classes.
According to recent FED communication, they have not been too worried by the rise in bond yields as they reflect a market pricing in much better growth prospects and cyclical rising inflation (as opposed to secular rising inflation). The challenge has been the sharp repricing in interest rates.
We've seen interest rate markets price in much faster policy normalization and reflect much tighter financing conditions with Eurodollar futures pricing in just over 3 rate hikes for the FED by September 2023, versus pricing in less than one at the end of Dec and just over one at the start of Feb for the same futures contract.
So, the big question this week is whether the FED steps in to calm things down or whether they will take another nonchalant view of the recent price action and risk a further tightening of financial conditions.
----
Highlights of the video:
00:18 – Current Baseline
02:37 –Expectations for the upcoming week
07:22 – Sentiment Shifts & Trade Plan
----
If you find these weekly analysis and trade ideas useful, you’ll love Financial Source. There’s a link below were you can learn more about it
https://financialsource.co
