FXTM information and reviews
FXTM
95%
OctaFX information and reviews
OctaFX
94%
XM information and reviews
XM
93%
FXCC information and reviews
FXCC
92%
Libertex information and reviews
Libertex
91%
FxPro information and reviews
FxPro
90%

Decreased interest in risk


24 February 2021

I will start today's review with the fact that the current week began with moderate sales on the stock markets of the United States and Europe. I would also like to draw your attention to the fact that the incredibly strong growth in US government bond yields has stopped, thereby indicating a decrease in risk appetite. Although there is no obvious trend change for this instrument, the market is already quite actively reacting to changes and everything is not as simple as it may seem at first glance.

The decline in US government bond yields signals an increase in demand for one of the most reliable investment instruments. So there is a demand for protective assets. Indeed, gold has gained slightly since the beginning of the week, returning above the technical and psychological resistance level of $1,800 per ounce, thereby confirming the theory of a decrease in risk appetite.

But when we talk about protective assets, it is impossible not to pay attention to the US dollar, which is quite actively performing this function. And here we have a conflict of interest, because the decline in government bond yields indicates that money is becoming cheaper, in this case, the US dollar, and at the same time, global interest in the US currency will grow against the background of increasing risks of uncertainty. Therefore, the US dollar index can enter a fairly wide sideways trend.

And now let's move on to the cryptocurrency market. The volatility of bitcoin trading has increased significantly, and since the beginning of the week, it has lost more than 13 thousand dollars or 22% in price. Last week, I noted the risk of developing a corrective decline, while it is extremely difficult to predict the depth of the collapse. One thing can be said right now, that the obvious sell-off in the stock market will also affect the cryptocurrency market, thereby showing a general decline in interest in risk.

A general leveling off of the current situation and, as a consequence, a clear cooling of the markets may occur in the event of optimistic statements from the representatives of the Fed and the government about their readiness to monetary stimulate the American economy for a long time by providing financial assistance to the population and business. But already now we hear about the risks of hyperinflation in the United States, which significantly reduces the likelihood of this scenario.

At the end of this release, I will draw attention to the Bank of England's monetary policy report, as well as to the speech of the Fed governor in the US Congress with a similar report. As a consequence, trading volatility in the financial markets may increase noticeably today.

#source

Share:


Related

The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast
The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast

Before getting down to analyzing why Euro reminds of a mafia victim in cement shoes falling off a Chicago bridge, allow us to open it up with a meme joke that best describes this whole ordeal...

31 Oct 2022

XAU/USD juggles around $1,710 as investors await US NFP
XAU/USD juggles around $1,710 as investors await US NFP

Gold price (XAU/USD) is displaying topsy-turvy moves in a narrow range of $1,709.35-1,713.42 in the early European session. The precious metal is displaying a lackluster performance...

7 Oct 2022

Positive mood stalls on the “pivot” trade
Positive mood stalls on the “pivot” trade

USD slid against most of its major peers. The DXY closed a tick above its lows of 110.05. Resistance is at 110.76 while next support is 109.29. GBP gained for a sixth session in a row, a winning streak not seen since April 2021...

5 Oct 2022

OctaFX glances at current economic shifts - the good, the bad, and the strange
OctaFX glances at current economic shifts - the good, the bad, and the strange

Pandemics and health crises, political tensions, geopolitical tension flashpoints popping up, Western sanctions on significant European and Asian economies, and grave tensions between...

3 Oct 2022

The Euro rebounded from the low
The Euro rebounded from the low

After updating its multi-year lows again, the major currency pair rebounded. The current quote for the instrument is 0.9656. Last night, the local interest in risks improved a bit, helping the asset to successfully correct...

29 Sep 2022

Gold Shows Signs of Life, But Heads Towards Another Losing Month
Gold Shows Signs of Life, But Heads Towards Another Losing Month

The precious metal is largely considered as a hedge to inflation, but it has not confirmed this status during the current year. It did kick it off with a rally, but as the Fed begun hiking rates back...

28 Sep 2022


Editors' Picks

HFM information and reviews
HFM
89%
FXCM information and reviews
FXCM
87%
NordFX information and reviews
NordFX
85%
MultiBank Group information and reviews
MultiBank Group
84%
Vantage information and reviews
Vantage
83%
FP Markets information and reviews
FP Markets
81%

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.