Risk rating

September 23, 2016

The market is in need of a new narrative. The Fed meeting in December is too far off and for now, the US election is not something that entices excitement. With central banks on hold, markets are pushing the envelope in terms of risk, so pushing risk assets ever higher. Whether we are extremes is always up for debate. The German 10 year (not a risk asset) has been pushed below the zero level once again, but such moves have prompted rallies elsewhere. We’ve seen corporate bonds outperform, with higher yielding currencies also pushing ahead, such as the Aussie which has pushed higher against the USD every day this week.

As with all risk rallies, it’s more about momentum, rather than valuation. Clearly bond yields below zero make many uncomfortable, but that does not stop you making a return should they push even more negative. The upshot is that we remain in a very unbalanced financial world, largely created by central bank policies. Yes, they have largely been in a lose-lose situation. Today’s a Friday, so the main issue is whether risk asset rally further into the weekend, or a modicum of profit-taking is seen. If anything, I think we’re probably going to err towards the latter, but the bigger picture probably remains for further modest gains overall. Just data in Canada today in the form of retail sales and inflation

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February 28, 2017
Gold opened the week inside of a consolidation zone
A close below the support at 1250 could see XAU/USD extend its declines down to 1240. Nevertheless, the upward structure remained in place. The lower limit of the upward channel lies around 1240. Buyers may find fresh bids around the level...
February 28, 2017
The US Congress meeting has investors on edge
Trumps speech at the Congress is a long-awaited event for investors, mulling over the room for further rally in the US market...
February 27, 2017
Black gold slightly declined amid the crude inventories report
The tone was negative in the oil market on Friday. The price reversed some losses in the night. Buyers returned the benchmark to 56.66 dollars per barrel where Brent caught fresh offers and moved lower...

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