Global view and local trading idea.

 

The era of curtailing incentive measures by the US Federal Reserve has began. A similar decision was previously made by the Bank of Canada and, most likely, this wave will soon cover other world central banks. At present, we are seeing the last phase of the bull market and, possibly, within the next year the stock markets will undergo a significant correction. Reducing the balance of the Fed looks insignificant at only 10 billion dollars a month, and the Fed plans to gradually raise the bar to 50 billion, which compared with the Fed's total balance of 4.5 trillion. dollars looks like a drop in the ocean, but it is extremely important in this situation to pay attention to how the market participants will react to the policy of the Fed.

At present, the main indicator of the state of the world economy is the public debt market, which is historically low on the spread between 2-year and 10-year bonds, and as soon as the spread begins to diverge, and the long end of the yield curve of the pair will go up, at the very moment will be the first call to the global trend change in the stock and financial markets

 

Chart: tradingeconomics.com

 

and assuming a possible reduction in the balance of the ECB, the picture of changing global trends is becoming even more dynamic.

hese events await us in the future and are not yet the prospect of today, but at the current moment in the light of the above-mentioned events, the idea of ​​buying an American dollar against the Canadian dollar is quite convincing.

For several months, against the backdrop of positive economic data on the Canadian economy and the increase in the rate by the Bank of Canada, the national currency has appreciably strengthened against the US dollar. On the contrary, the US dollar is only planning a tightening of monetary policy, while the price of the Canadian dollar has already included the current rate hike and possible future hike. Of course, fluctuations are possible at current levels for the pair USD/CAD, but, most likely, the local strengthening of the Canadian dollar from current levels is highly probable. We wish you profitable trading!

 

 


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Care: These reviews are a private opinion of ARUM CAPITAL and are provided for information only. In no way can the provided analysis be considered as an action signal, neither is it any sort of investment advice (for the purposes of EU Directive 2004/39/EC). ARUM CAPITAL waives any liability for the trading results which may arise after using these reviews. These materials contain NO warranties or guarantees, either direct or implicit, on the precise, complete or confirmed character of the details they contain.

 

 

 

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