How To Know When News Is Hawkish Or Dovish?
Keeping track of hawkish and dovish breaking news can be overwhelming, but this tip will save you loads of time and energy.
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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://bit.ly/2HFykNd
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Dovish or hawkish news hitting the wires can be extremely profitable when you know what to look for and how to trade it.
Now the first place where you will want to start is the main Macro Themes that the markets are focusing on at the time. You see, at any given moment, there is always one or a few key macro drivers that the markets are tuned into and focused on.
Even though things like economic data is always important, the main drivers are often these themes and how the economic data feeds into them.
So, if you are new to trading the news, it can get a bit overwhelming sometimes when you look at a news feed because there is so much information coming through on a daily basis that it can be a bit much to take in, but the point about macro themes is that you don’t have to drill one on a granular level with every news item you get.
If you just zero in on the major themes, and start with those it will get easier as time goes by. When it comes to these major macro themes in the market, they often create the biggest moves as it’s something markets are focused on, and by drilling into some of the specifics of these themes it can create very predictable reactions in the market that we can profit from.
The reason for this is because movements in financial markets are often dictated by what investors think other investors are thinking, you see investors are always trying to front-run how they think other investors will likely react towards certain news and events.
In the terminal we dedicate a lot of our focus in our daily briefings, the daily reports, the video commentary and the webinars into explaining and expanding on these major themes to make sure you guys are prepared, so make sure to tune into the info available in the terminal to help you out.
Now, we can’t and won’t be able to prepare you for each and every possible unexpected news item hitting the wires. For example, there was no way in knowing that France and Germany was going to develop a EU recovery fund proposal which will include joint debt issuance for the first time in EU history, we couldn’t know that will happen.
But, if you’ve been tuned into the market for a while and you’ve done some additional research you would know why this was such a big deal for the Eurozone as a short-term driver, obviously it developed into a major theme later on but in the short-term as it happened in the short term, there were two reasons why the Euro gained in the short-term on that breaking news.
Firstly, Germany is usually considered as one of the more frugal member states, so for them to come out and agree on join-debt issuance, which was something they said they wouldn’t do prior, that was a big deal in terms of what it showed about EU unity, especially from the two biggest and most influential states.
Secondly, what this meant for struggling states like Italy and Spain were quite big as they were having debt issues of their own for years, so the fact that the proposal meant they would be receiving grants and not loans saw some immediate relief in their bond markets, and as a result we saw a nice move lower in the risk premium for the EUR as we saw the BTP/Bund spread make a sizeable move lower.
Now as I said there wasn’t a way we could have prepared you for that initial release, we of course made videos that showed how we could take advantage of that upside momentum in the Euro, but as the news came out and hit the wires the only way you could have know whether that would be hawkish or dovish was with some experience on the underlying issues that made it important.
And those type of things will take time, being able to analyze the impact of those type of news announcements will take time and practise lots of time in the markets watching how investors behave in certain environments.
It does get easier with time, but for now, stick to those major themes and know what type of news will have or should have the biggest type of impact.
Right now, the virus is still in focus, but the MAIN focus on that front right now is of course the second wave fears as cases in other parts of the world increase, so you can start preparing yourself for possible trading scenarios based on that.
Of only focusing on those major themes you have more time and energy to really drill down into the details.
-----
If you find this content helpful, you’ll love Forex Source.
There’s a link below were you can learn more about it
https://bit.ly/2HFykNd
----
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://bit.ly/2HFykNd
-----
Dovish or hawkish news hitting the wires can be extremely profitable when you know what to look for and how to trade it.
Now the first place where you will want to start is the main Macro Themes that the markets are focusing on at the time. You see, at any given moment, there is always one or a few key macro drivers that the markets are tuned into and focused on.
Even though things like economic data is always important, the main drivers are often these themes and how the economic data feeds into them.
So, if you are new to trading the news, it can get a bit overwhelming sometimes when you look at a news feed because there is so much information coming through on a daily basis that it can be a bit much to take in, but the point about macro themes is that you don’t have to drill one on a granular level with every news item you get.
If you just zero in on the major themes, and start with those it will get easier as time goes by. When it comes to these major macro themes in the market, they often create the biggest moves as it’s something markets are focused on, and by drilling into some of the specifics of these themes it can create very predictable reactions in the market that we can profit from.
The reason for this is because movements in financial markets are often dictated by what investors think other investors are thinking, you see investors are always trying to front-run how they think other investors will likely react towards certain news and events.
In the terminal we dedicate a lot of our focus in our daily briefings, the daily reports, the video commentary and the webinars into explaining and expanding on these major themes to make sure you guys are prepared, so make sure to tune into the info available in the terminal to help you out.
Now, we can’t and won’t be able to prepare you for each and every possible unexpected news item hitting the wires. For example, there was no way in knowing that France and Germany was going to develop a EU recovery fund proposal which will include joint debt issuance for the first time in EU history, we couldn’t know that will happen.
But, if you’ve been tuned into the market for a while and you’ve done some additional research you would know why this was such a big deal for the Eurozone as a short-term driver, obviously it developed into a major theme later on but in the short-term as it happened in the short term, there were two reasons why the Euro gained in the short-term on that breaking news.
Firstly, Germany is usually considered as one of the more frugal member states, so for them to come out and agree on join-debt issuance, which was something they said they wouldn’t do prior, that was a big deal in terms of what it showed about EU unity, especially from the two biggest and most influential states.
Secondly, what this meant for struggling states like Italy and Spain were quite big as they were having debt issues of their own for years, so the fact that the proposal meant they would be receiving grants and not loans saw some immediate relief in their bond markets, and as a result we saw a nice move lower in the risk premium for the EUR as we saw the BTP/Bund spread make a sizeable move lower.
Now as I said there wasn’t a way we could have prepared you for that initial release, we of course made videos that showed how we could take advantage of that upside momentum in the Euro, but as the news came out and hit the wires the only way you could have know whether that would be hawkish or dovish was with some experience on the underlying issues that made it important.
And those type of things will take time, being able to analyze the impact of those type of news announcements will take time and practise lots of time in the markets watching how investors behave in certain environments.
It does get easier with time, but for now, stick to those major themes and know what type of news will have or should have the biggest type of impact.
Right now, the virus is still in focus, but the MAIN focus on that front right now is of course the second wave fears as cases in other parts of the world increase, so you can start preparing yourself for possible trading scenarios based on that.
Of only focusing on those major themes you have more time and energy to really drill down into the details.
-----
If you find this content helpful, you’ll love Forex Source.
There’s a link below were you can learn more about it
https://bit.ly/2HFykNd
