Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.7% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
- English (UK)
I addressed the idea of using extreme pessimism as a vehicle to time a reversal and I feel its coming, the question of when is obviously key. When you have markets moving 10% a day, if you mistime the trade then it's costly. It’s coming though and I think we saw the whites of the Fed’s eyes last night with their bold move to add liquidity to the system, with a huge $1.5t in repo operations over the next three days. What’s more, the $60b p/m in UST bill purchases will now roll to longer duration US Treasuries – a stealth QE. But, its not the game-changer, and although participants will offer USTs for cash, this will be reversed at a defined date and in fact, I argue that buying USTs outright to hold on their balance sheet indefinitely (proper QE) would be negative in this environment.
In this video, I address the idea of what the market wants to see; that being corporate debt purchases - and how market players will keep selling risk until they get it. I argue that four days is an eternity in these markets, so the Fed should just hold an emergency meeting today and cut the fed funds rate to zero, get it over and done with. Trump needs to win back support, and we need a big response, but that may not happen until next week. But we as, what will it take to promote a better tone in these markets, as when these markets rally, it will go hard.
Ready to trade?
It's quick and easy to get started. Apply in minutes with our online application process.
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.