일본 경제

투자자 크로니클 & 블룸버그: 일본의 20년 만기 채권 경매 결과는 은행과 보험사의 내수 약세를 나타냅니다.일본은행 (BoJ) 은 다른 중앙은행과 달리 인플레이션 목표치인 2% 를 하회하는 것에 대해 우려하고 있으며, 현재 인플레이션은 3% 정도입니다.

이로 인해 일본의 높은 공공 부채에 대한 우려가 제기되고 보험 회사와 연금 기금에 영향을 미칠 수 있습니다.따라서 금리가 다시 한도에 근접할 경우 BoJ는 허용 한도 범위를 확대하는 방안을 고려할 수 있습니다.소시에테 제네랄의 애널리스트들은 2024년 1월 상한선이 1.5% 까지 상승할 수 있다고 제안합니다.

유럽 중앙은행

BNP 파리바: 금리인상 사이클이 거의 끝나가고 있을 수 있습니다.연말까지 경제 활동이 약화되고 기대 인플레이션이 낮아지면 유럽중앙은행 (ECB), 영란은행 (BoE) 과 같은 연준이 금리 인상을 중단할 수 있습니다.

그러나 추가 긴축 가능성은 여전히 남아 있습니다.즉각적인 인하 대신 인플레이션 완화를 위해 정책금리는 2024년 중반까지 높은 수준을 유지할 것으로 예상됩니다.BNP 파리바는 2024년 중반 이전에 연준, ECB, BoE의 정책금리 변동이 없을 것으로 예상하며, 이는 아마도 금리 인하가 시작될 가능성이 있습니다.이와 반대로 일본은행 (BoJ) 은 2024년 4월에 통화 긴축 정책을 시작할 예정입니다.

헤지 펀드 및 원자재

Kitco: 10월 17일로 끝나는 주간의 CFTC 최신 보고서에 따르면 헤지펀드들은 금 시장에서 상당한 변화를 목격하고 있습니다.

머니 매니저들은 코멕스 골드 선물의 투기 매수 포지션을 10,774계약 늘려 104,708건에 달했고, 숏 포지션은 31,096계약 감소하여 89,605계약으로 감소했습니다.

2주간의 순 공매도 이후 투기 포지션은 강세로 전환되었으며 순 매수 포지션은 15,103계약입니다.소시에 테 제네랄의 애널리스트들은 이를 2006년 이후 금 시장에서 두 번째로 큰 숏 커버링 움직임으로 꼽았습니다.

정량적 타이트닝

CNBC 및 포춘: 퍼싱 스퀘어의 설립자인 빌 애크먼은 장기 재무부에 대한 베팅을 은폐하기로 결정했다고 발표했습니다.그는 이러한 움직임의 이유로 지정학적 위험의 증가를 꼽았습니다.

그는 세계의 현재 위험 수준으로 인해 장기 채권의 숏 포지션을 현행 금리로 유지하는 것이 현명하지 않다고 우려하고 있습니다.제롬 파월 연방준비제도 (Fed·연준) 의장은 장기 국채 수익률 상승으로 중앙은행이 일련의 금리 인상을 중단할 수도 있다고 암시했습니다.

그러나 월스트리트 전문가들은 양적 긴축 (QT) 이 복잡하고 예측하기 어려우며 경제에 잠재적 위험이 있다고 경고합니다.

이자율

스웨덴 포스트센: ECB의 금리 발표는 이번 주 목요일에 있을 예정입니다.블룸버그 보고서에 따르면 크리스틴 라가르드 유럽중앙은행 총재는 유럽위원회, EU 의장국, 유로그룹 등과 전화 회의를 가졌습니다.

그녀는 향후 몇 분기 동안 침체가 악화될 것으로 예상하고 있습니다.라가르드 총재는 고용이 탄력적이지만 경기 둔화 조짐도 보이고 있습니다.

영국 실업률

가디언: 영국 고용 시장이 둔화 조짐을 보이면서 잉글랜드 은행은 두 번째로 금리를 5.25% 로 유지할 것으로 예상했습니다.

최근 수치에 따르면 실업률은 전분기의 4% 에서 상승한 4.2% 로 나타났습니다.CBI 설문조사에서 제조업체들은 경기심리 하락, 생산량 하락, 주의력 증대 등을 보고했습니다.

애널리스트들은 은행의 통화정책위원회가 고용 시장의 약세를 고려하여 금리를 유지할 것으로 예상합니다.#BankOfEngland #InterestRates #UKEconomy

전기 자동차

포브스: 보험 비용 증가와 보조금 만료 기한은 유럽 전기 자동차 시장에 어려움을 안겨줍니다.영국 언론은 보험료가 치솟고 있다고 보도했습니다. 한 Tesla Model Y 소유자는 전년도 1,000파운드 (1,200달러) 에서 인상된 5,000파운드 (6,000달러) 라는 충격적인 연간 보험료를 받게 되었습니다.

미국에서는 전기차 판매가 둔화되어 2023년 8월에 판매되기까지 1월에 비해 두 배 더 오래 걸렸습니다.Tesla의 가격 인하에도 불구하고 전기차 가격은 전년 대비 22% 하락했습니다.신에너지 자동차에 대한 보험은 높은 손실률로 인해 기존 자동차보다 20% 더 높은 경우가 많습니다.

캐나다 경제

캐나다 은행 (BoC): 캐나다 중앙은행 (BoC) 은 정책금리를 5% 로 동결하고 양적긴축 전략을 지속하기로 결정했습니다.캐나다 중앙은행은 올해 세계 GDP 성장률이 2.9%, 2024년에는 2.3% 로 전망하고 있습니다.기업 투자는 수요 약화와 차입 비용 증가로 인해 어려움을 겪고 있습니다.한편 캐나다의 인구 증가는 노동 시장과 주택 수요에 영향을 미치고 있습니다.

엔화 변동성

로이터: 스즈키 슌이치 일본 재무장관이 통화 시장 변동에 신속하게 대처하겠다는 일본의 약속을 재확인했습니다. 미국 달러 대비 엔화가 150을 넘어서면서 스즈키는 과도한 변동성을 억제하면서 펀더멘털에 기반한 안정적인 통화 움직임의 필요성을 강조합니다.

일본 법률은 정부에 통화 정책에 대한 통제권을 부여하며 재무부는 개입 결정을 내립니다.

유럽 금리 인상

가디언: ECB는 생활비 상승을 막기 위한 이전 10번의 금리 인상에서 벗어나 기준금리를 동결했습니다.

인플레이션이 목표치인 2% 를 상회했음에도 불구하고, 금리 인상이 유럽 경제, 특히 제조업 부진으로 10월에 4개월 연속 기업 활동이 위축된 독일에 미칠 수 있는 영향에 대한 우려가 커지고 있습니다.

크리스틴 라가르드 ECB 총재는 지속적인 경제 약세를 예상하고 있습니다.유로존 9월 인플레이션은 4.3% 로 하락하여 8월의 5.2% 에서 하락했는데, 이는 1년 전 9.9% 에 비해 하락한 수치입니다.

고지 사항:

이 블로그에 포함된 정보는 교육 목적으로만 사용되며 재정 또는 투자 자문을 위한 것이 아닙니다.출처에서는 발행일 기준으로 정확한 것으로 간주합니다.출판 시점 이후의 상황 변화는 정보의 정확성에 영향을 미칠 수 있습니다.

과거의 성과는 미래의 결과를 의미하지 않습니다.거래 결정을 내리기 전에 직접 조사해 보는 것이 좋습니다.

다음을 좋아할 수도 있습니다.

https://blog.deriv.com/posts/analysing-the-impact-of-the-israel-hamas-war-on-oil/

https://blog.deriv.com/posts/whats-expected-in-gold-after-the-recent-rally/

https://blog.deriv.com/posts/when-will-the-fed-hit-the-brakes-on-interest-rate-hikes/

Explore what’s in store for the future in automated trading. See how you can make the best of this fast-evolving aspect of online trading.

Automated trading, affectionately known as bot trading, has become very popular in the last decade as trading technology advances. The increasing complexity of financial markets has also played a significant role, attracting traders worldwide to jump on the automated bandwagon.

What is automated trading?

Automated trading uses software (a trading bot) to execute trades on your behalf. Automated trading systems can be programmed to follow any trading strategy and can be used to trade a variety of asset classes.

Some benefits of automated trading are:

• Convenience
  Trading bots can trade 24/7, so you don't have to sit in front of your computer all day to trade.
  
  
• Discipline
  Trading bots can follow your trading strategies to the letter without the influence of emotions or biases.
  
  
• Accuracy
  Trading bots can execute trades faster and more accurately than humans.
  

If you’re thinking of getting into bot trading, read on as we explore what’s in store for the future.

5 game-changing future trends

1. Increased use of artificial intelligence (AI) and machine learning (ML)
   AI and ML are already being used to develop more sophisticated trading algorithms and to make better trading decisions. In the future, AI and ML are expected to play an even more significant role in automated trading as they become more powerful and accessible.
   
   
2. Greater automation of the trading workflow
   Currently, many aspects of the trading workflow are still manual. In the future, more and more of these tasks are expected to be automated using AI and ML. This will free traders to focus on more strategic tasks, such as developing and refining trading strategies.
   
   
3. More personalised trading experiences
   Bot trading platforms are becoming increasingly sophisticated and personalised. Traders can now tailor their trading bots to their needs and risk tolerance. In the future, trading bots are expected to become even more personalised as they use AI and ML to learn more about each trader's preferences.
   
   
4. Increased use of blockchain technology
   Blockchain technology can revolutionise the way that financial markets operate. Using secure, decentralised ledger technology, self-executing contracts (smart contracts) can automate complex transactions. Thanks to blockchain technology, we can expect to see more secure and efficient automated trading systems in the near future. 
   
   
5. The rise of social trading
   Social trading platforms allow traders to connect with each other, share trading ideas and strategies, and even automatically copy the trades of successful traders. Social trading is expected to become more integrated with automated trading as traders use social trading to identify and follow successful trading strategies. 
   
   

Hold on, it has risks, too

While automated trading offers many advantages, it’s not a magic bullet. Using trading bots has its risks. It’s essential to carefully evaluate any bot trading system before using it and to understand the risks involved.

Here are 3 important risks to consider:

• Technical failures
  Automated trading systems rely on technology, and technology can fail. This could include hardware failures, software failures, or internet connectivity issues. If your trading bot fails, it could execute trades you did not intend to make or miss out on profitable trades.
  
  
• Human error
  Humans create automated trading algorithms, and humans make mistakes. While algorithmic trading is innovative, if there is a bug in your trading bot system, it could lead to losses.
  
  
• Market volatility
  Bot trading systems are designed to trade in various market conditions, but they are not perfect. If the market becomes too volatile, your trading bot may be unable to keep up, and you could lose money.
  
  

The future is bright

As AI and ML become more powerful and accessible, automated trading platforms are expected to become more bot trading more accessible to a broader range of traders and help traders make better trading decisions. We will also see more trading brokers offering exciting automated trading solutions in the next few years.

If you want to ride the wave of the future and get into bot trading, Deriv Bot is a great trading platform to start with. Explore automated trading on Deriv Bot risk-free with a demo account with virtual money.

Disclaimer: This trading platform's availability may depend on the client's country of residence.

You may also like:

https://blog.deriv.com/posts/martingale-strategy-in-deriv-bot/

https://blog.deriv.com/posts/how-to-build-a-basic-trading-bot-with-dbot/

https://blog.deriv.com/posts/how-to-use-technical-analysis-tools-on-derivs-trading-bot/

Have you ever wondered what makes the prices of commodities like gold and oil rise and fall? The answer lies in a fascinating interplay of speculative factors that create the unpredictable landscape of commodity market rates. These are not directly related to the underlying value of a commodity but can still have a major impact on its price. 

From the psychology of investors to the impact of hedge funds, we'll take a look at some of the reasons behind the fluctuations in commodity rates:

• Investor sentiment
• Hedge funds and speculators
• Market liquidity
• Technical analysis
• Options and futures contracts
• Speculative bubbles

Investor sentiment

Commodities market trading is heavily influenced by the sentiment of investors and traders. Positive news or market optimism can drive speculative buying, pushing prices higher. 

Gold volatility and investor sentiment have a complex relationship. For instance, an increase in the trading volume of gold call options, especially those with strike prices above the current market price (out-of-the-money calls), can indicate bullish sentiments. 

Conversely, negative sentiment can trigger selling and price declines, affecting your gold trading strategy.

Hedge funds and speculators

Large institutional investors, such as hedge funds and commodity trading advisors (CTAs), can have a significant impact on commodity prices’ volatility. Their trading strategies and positions can amplify price movements.

Market liquidity

The level of trading activity and market liquidity can affect price stability. Thinly traded commodities with fewer market participants may experience more significant price swings due to large trades.

Technical analysis

Many traders use technical analysis, which involves studying historical price charts and patterns, to make trading decisions. Technical factors, such as moving averages and support/resistance levels, can influence trading strategies.

Options and futures contracts

The commodities market relies heavily on derivatives such as options. The trading of these financial instruments can impact the spot prices of commodities. The relationship between spot prices and future prices for a commodity can then be described by 2 terms — backwardation and contango. We will explore these terms further in another blog.

Speculative bubbles

Commodities markets can experience speculative bubbles where prices rise far above their intrinsic values due to excessive buying. These bubbles often burst, leading to sharp price corrections. Commodity options, such as those for oil, gas, metals, etc., are speculative instruments, and investors can lose more money than they invest.

Ultimately, what affects commodity prices can vary. Speculative factors, including investor sentiment, market liquidity, and trading strategies, can amplify or dampen these price movements. Successful commodity traders and investors carefully analyse and navigate these factors to make informed decisions in this ever-evolving market.

On Deriv, you can trade commodities on a variety of trading platforms, each with its own unique advantages — Deriv MT5 and Deriv X for CFDs, and Deriv Trader, Deriv Bot, and SmartTrader for digital options.

Sign up for a free demo account to start exploring the commodities market. It comes preloaded with 10,000 USD virtual currency so that you can practise trading commodities online risk-free.

Disclaimer: 

The information contained in this blog article is for educational purposes only and is not intended as financial or investment advice.

Trading conditions, products, and platforms may differ depending on your country of residence.

You may also like:

https://blog.deriv.com/posts/whats-expected-in-gold-after-the-recent-rally/

https://blog.deriv.com/posts/3-tips-to-boost-your-commodities-trading-skills/

https://blog.deriv.com/posts/why-trade-gold/

Disclaimer: This content is not intended for EU residents.

The recent Israel-Hamas conflict sparked a gold rally, primarily driven by short-covering. The question now is whether this rally will be sustainable.

Before the Israel-Hamas War, the COT (Commitment of Traders) Report indicated that large speculators were taking short positions in the gold futures market. However, following the conflict, within just two weeks these short positions were largely covered, and there was a modest increase in long positions. Assessing how much risk premium has been factored into the price of gold is challenging. Given the ongoing situation's uncertainty, short-term speculators are likely to remain cautious and refrain from shorting gold until the situation becomes clearer.

Large speculator net holdings from COT report of Commodity Futures Trading Commission (CFTC)

Source: Commodity Futures Trading Commission, deriv.com

Gold as a safe-haven commodity

Gold is often considered a safe haven asset; however, according to the ABN Amro report released on 10 March 2022, the reliability of gold's safe haven status is inconsistent. There are times when it behaves as a secure investment and other times it exhibits characteristics of a risk asset.

Reflecting on historical events such as the 9/11 terror attack in 2001, the Crimea war in 2014, and the Russia-Ukraine conflict in 2022, gold market experienced notable surges of 6.5%, 11%, and 11%, respectively. Presently, the Israel-Hamas conflict has reached an advanced stage, with Israel yet to deploy ground troops. Additionally, should other nations become embroiled in this conflict, gold market has already seen a 7.5% increase in value. In the event of further escalation, the likelihood of gold experiencing additional surges remains a distinct possibility.

Source: deriv.com

The question arises: Have demand-side dynamics played a prominent role in shaping the direction of the gold market?

The supply of gold remains relatively stable, with a consistent quarterly range of around 1,100 to 1,250 tonnes. What predominantly influences the price of gold is the demand side, particularly the investment demand.

Gold ETFs play a crucial role in maintaining the balance of supply and demand for gold. When there is an outflow of funds from ETFs, it often triggers a decline in the price of gold.

Source: World Gold Council (WGC)

Source: WGC

Looking at the chart above, it becomes evident that gold demonstrates stronger performance during periods of ETF inflows. Although we've heard reports of gold purchases by entities like the Chinese Central Bank, the Turkish Central Bank, and individuals in China this year, as of September 29, a net outflow from the ETF still exists. The demand in Asia has not been sufficient to offset the outflows from the rest of the world. And gold didn’t perform very well.

What factors influence the demand for gold, particularly in terms of investment? Is its appeal as a safe haven, as a protection against inflation, or the impact of monetary policies driving the demand for gold?

• Safe haven
  As mentioned previously, the ABN Amro reports indicate that the safe haven characteristics of gold are inconsistent.

• Inflationary hedge

Source: deriv.com

Source: deriv.com

Based on the chart above, during the low inflation period from 2000 to 2006, gold exhibited a weak correlation with the US CPI, showing a correlation coefficient of -0.055. Similarly, from 2007 to 2023, gold did not demonstrate a strong correlation with inflation, with a correlation coefficient of 0.36.

For instance, when we compare the peak gold price of 2020, which was 2,075 USD, and the inflation rate of 2% in 2023, the peak gold price remains at 2,075 USD while inflation has risen to over 7%. If gold were an effective hedge against inflation, we expect its value to have surpassed the 2020 peak.

• Monetary policy
  

Source: deriv.com

The chart above illustrates the connection between gold and the US three-month yield, revealing a historical pattern where gold rallies when yields decline, notably since 2006.

The question now arises: Are we approaching a turning point? Will the Fed persist with rate hikes? If market sentiment begins to factor in the possibility of a rate cut by the Fed, it could signal the beginning of a gold rally.

According to the model from the Atlanta Fed, the three-month yield is anticipated to begin decreasing, with the earliest projection in January 2024 and no later than June 2024.

Source: atlantafed.org

While the comparison between gold and JPY as well as gold and GBP has reached all-time highs, it doesn't necessarily guarantee that gold will establish a new record high against the USD. However, it does suggest that gold is likely to continue strengthening when measured against other currencies.

On certain occasions, both the USD and gold have risen simultaneously, as illustrated in the lower chart depicting XAU/USD vs. USD/EUR. The shaded area represents periods when both USD and gold experienced concurrent rallies.

Source: deriv.com

Technical Analysis

Chart pattern: On the long-term gold chart, a cup and handle pattern is taking shape, with the left side of the cup forming in 2011. Gold appears to be currently in the process of forming the handle. If gold manages to breach the resistance level at 2,080, we can anticipate a further rally. It's important to note that support is expected to arrive around 1,800.

Source: deriv.com

Disclaimer:

Trading is risky. Past performance is not indicative of future results. It is recommended to do your own research prior to making any trading decisions. The information contained in this blog article is for educational purposes only and is not intended as financial or investment advice.

You may also like:

https://blog.deriv.com/posts/japans-approach-to-currency-intervention/

https://blog.deriv.com/posts/when-will-the-fed-hit-the-brakes-on-interest-rate-hikes/

https://blog.deriv.com/posts/dollar-downtrend-fuels-gold-to-a-6-month-peak-as-fed-rate-increases-stalls/

Disclaimer: This content is not intended for EU residents.

Have you noticed how your everyday expenses, from groceries to fuel, have been steadily climbing for the past three years? It's easy to feel like the commodities market is something distant, unrelated to your daily life. But what if we told you that you're more connected to it than you might think?

Consider this undeniable fact: the prices of essentials like milk, oil, tomatoes, and even detergent – things you rely on every day – are at record highs, and it's hitting your wallet hard. You might be gritting your teeth as you pay these escalating costs, but here's the thing: you don't have to be on the wrong side of the commodities market. 

Understanding what commodity prices are and what affects them is essential for anyone involved in the world of trading.

Let’s dive into the fundamental factors affecting this market!

• Supply and demand
• Weather and natural disasters
• Geopolitical events
• Economic indicators
• Currency exchange rates
• Government policies and regulations
• Technology and innovation
  

Supply and demand

The most fundamental factor affecting commodities market prices is the balance between supply and demand. When demand for a particular commodity exceeds its supply, prices tend to rise, and vice versa. Weather conditions, geopolitical events, and technological advancements can all impact supply and demand.

For example, if we were to look at gold volatility and what factors influence demand, a significant increase in jewellery demand in India during the wedding season could lead to a surge in gold prices. Conversely, decreasing gold production due to labour strikes in a central mining region can reduce supply and drive higher prices.

Some of the world's major oil exporters, like Russia and Saudi Arabia, have previously cut their production and hence driven up the price of oil.

Weather and natural disasters

Agricultural commodities like grains and soft commodities such as coffee and cocoa are highly susceptible to weather conditions. Droughts, floods, hurricanes, and other natural disasters can devastate crops and disrupt supply chains, leading to price fluctuations.

In 2022, a drought in the United States and a heatwave in India reduced wheat production in both countries. This led to higher global wheat prices, as there was less wheat available to meet global demand. This meant the price of wheat-based products, such as bread, pasta, and cereal, rose around the world.

Geopolitical events

So, what other factors influence supply? Political instability, conflicts, and sanctions in major commodity-producing regions can disrupt the supply of commodities like oil, natural gas, and metals. This can cause sharp price spikes and increased market volatility.

If there is a war in a country that produces a commodity, the supply of that commodity may be disrupted, leading to higher prices. This example can be seen very clearly in the Russia-Ukraine war.

In the weeks following Russia's invasion of Ukraine on February 24, 2022, the price of crude oil rose over 50% to reach a 14-year high of over 130 USD per barrel. Natural gas prices in Europe also saw significant increases, reaching record-high levels.

The price of gold similarly experienced sharp gains after the escalation of the conflict, rising nearly 100 USD per ounce on the first day, February 24. In the subsequent weeks, gold prices continued to climb, reaching highs of around 2,070 USD per ounce in early March 2022. Market analysts noted that gold is often viewed as a safe haven asset during periods of geopolitical tensions and uncertainty.

Economic indicators

Economic data, such as GDP growth, employment figures, and consumer sentiment, can have a significant impact on commodities markets trading. Strong economic growth tends to increase demand for industrial commodities, while weak economic conditions can reduce demand.

But this is not always the case.

Strong GDP growth often indicates a robust economy with increased production and consumption. This can lead to greater demand for industrial commodities like metals and energy resources, which are essential for manufacturing and construction.

However, it should be noted that extreme economic growth may eventually lead to inflation, which sparks central banks to intervene by raising interest rates.

Higher interest rates can make holding gold less attractive because it doesn't provide any yield or interest. As a result, investors may prefer interest-bearing assets, and this can lead to a decrease in gold demand and price.

Currency exchange rates

Commodities are commonly priced in US dollars. There is often an inverse relationship between the strength of the USD and commodity prices, including gold. A stronger US dollar tends to drive gold prices lower, and vice versa. A weakening of the US dollar can make gold more attractive to international buyers because it becomes less expensive in other currencies. This can lead to increased demand for gold trading online and higher prices.

Developing a well-defined gold trading strategy is essential for navigating the complexities of the precious metals market.

Government policies and regulations

Government policies, such as tariffs, subsidies, and environmental regulations, can affect the production, import, and export of commodities. These policies can have a direct impact on supply and demand dynamics. If a government decides to subsidise the production of a commodity, this can lead to lower prices.

Technology and innovation

Advances in technology can impact the supply side of commodities markets. For example, improved drilling techniques in the oil industry can lead to increased production and lower prices.

As we can see, the commodities market is a complex interplay of fundamental factors. We might not be paying attention, but we can see the effects in our daily lives. Supply and demand dynamics, influenced by factors like weather, geopolitics, and economic conditions, form the foundation of commodity price movements.

However, it’s important to note that fundamental factors are not the only ones that affect commodities market rates. Speculative factors can also play a significant role. We’ll explore the speculative factors in another blog.

On Deriv, you can trade commodities on a variety of trading platforms, each with its own unique advantages — Deriv MT5 and Deriv X for CFDs, and Deriv Trader, Deriv Bot, and SmartTrader for digital options.

Sign up for a free demo account to start exploring the commodities market. It comes preloaded with 10,000 USD virtual currency so that you can practise trading commodities online risk-free.

Disclaimer:

The information contained in this blog article is for educational purposes only and is not intended as financial or investment advice.

Trading conditions, products, and platforms may differ depending on your country of residence.

You may also like:

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US Banks

Reuters and The Daily HODL: JPMorgan Chase CEO Jamie Dimon to sell shares for the first time in 18 years for financial diversification and tax planning.

Meanwhile, US commercial banks' deposits witnessed a $100 billion decline in three weeks, per Federal Reserve Economic Data (FRED).

UK economy

The Guardian: The Bank of England, keeping a close eye on labour market trends, now sees signs of cooling.

Economist George Buckley highlights concerning indicators: falling consumer confidence, retail sales slowdown, construction output decline (especially in housing), and manufacturing contraction.

The Monetary Policy Committee (MPC) is likely considering these factors. Buckley suggests an MPC decision to maintain the current policy seems imminent.

Europe’s monetary policy

Reuters: Recent data indicates that the European Central Bank (ECB) will not likely raise interest rates in December unless there are significant surprises, commented Simkus. 

ECB policymakers Gediminas Simkus and Peter Kazimir, both of whom advocate tighter policy, emphasize that the ECB is not expected to lower rates during the first half of the following year. 

Stock market 

Reuters: JP Morgan’s Marko Kolanovic is concerned about consensus earnings growth amid economic challenges. Meanwhile, Morgan Stanley’s Mike Wilson maintains a year-end target of 3,900 for the S&P 500, citing a unique market setup.

Yield curve control

CNBC: BOJ maintains a -0.1% short-term policy rate despite 18 months of core inflation exceeding the 2% target. The 10-year Japan Government Bond yield target remains 0%, with a 1% upper bound as a reference.

BOJ cites 'extremely high uncertainties' in domestic and global economies and financial markets, leading to increased flexibility in YCC policy. 

Gold demand

Gold.org: Q3 gold demand (excluding OTC) surpassed the five-year average by 8% but was 6% weaker YoY at 1,147t.

Net central bank buying at 337t marked the third strongest quarter in Gold Council data.  Global gold ETFs experienced a smaller outflow of 139t in Q3 compared to Q3'22 (-244t).

Yen intervention

Reuters: Japan's top currency diplomat, Masato Kanda, stated authorities are ready to address 'one-sided, sharp' yen movements. This comes as the currency drops below a crucial level, emphasizing the warning against speculators.

Federal policy

Federal Reserve: Fed Chair Powell announced the decision to maintain the federal funds rate target range at 5.25% to 5.5% and continue reducing securities holdings.

The significant rate hike and over $1 trillion reduction in holdings since last year are having a restrictive impact on economic activity and inflation. 

Apple earnings

CNBC and Skynews: Apple reported a net income of $23B on $89.5B in revenue for the quarter ending September 30. This marks the 4th quarter decline.

While revenues dropped 1% from the previous year, forex rate changes caused a 2% revenue dip. Net income was $22.96B ($1.46/share) compared to $20.72B ($1.29/share) last year. iPhone 15 outperformed iPhone 14, but Mac and iPad businesses declined in the quarter.

Bank of England

CNBC, The Guardian and The BOE: The Bank of England maintains its benchmark rate at 5.25%, aligning with the Fed and European Central Bank in keeping key rates stable.

BOE foresees no cuts until the third quarter of the following year, prioritizing a prolonged restrictive stance. UK GDP likely remained flat in 2023 Q3, below prior projections. Inflation, measured by twelve-month CPI, stood at 6.7% in both September and 2023 Q3.

Disclaimer: 

The information contained in this blog is for educational purposes only and is not intended as financial or investment advice. It is considered accurate at the date of publication by the sources. Changes in circumstances after the time of publication may impact the accuracy of the information.

Past performance is not indicative of future results. Doing your own research before making any trading decisions is recommended.

You may also like:

https://blog.deriv.com/posts/analysing-the-impact-of-the-israel-hamas-war-on-oil/

https://blog.deriv.com/posts/japans-approach-to-currency-intervention/

https://blog.deriv.com/posts/what-are-rollovers-how-they-affect-forex-trading/

In order to comprehend what currency pair rollovers are, the first step is to understand the essence of CFD forex trading, which involves speculating on the price movements of currency pairs without actually owning the currencies. CFD traders can utilise leverage, which essentially acts as a loan from a forex broker, to control larger positions with a smaller capital investment. 

When trading forex pairs, one currency is bought while the other is sold simultaneously. For example, when buying EUR/USD, essentially you're borrowing (and then selling) US dollars to buy and hold euros in your account.

Thus, CFDs introduce the concept of trading with borrowed funds, which in turn brings interest charges into play.

In this guide, we’ll cover:

• What forex rollovers are
• How to calculate rollover rates
• Trading strategies to optimise rollovers
• MT5 Swap-free accounts

What is a rollover in forex trading?

Rollovers, also known as swap fees or overnight position interest, are costs that traders face when they keep CFD positions open overnight. They are charged in order to compensate the broker for the interest costs incurred while providing the necessary borrowing and leverage to traders.

In the forex market, these fees depend on the interest rate differential between the currencies involved in the trading pair. When you purchase a currency with a higher interest rate compared to the one you sell, you receive a credit. Conversely, if the interest rate of the currency you buy is lower than the one you sell, you'll incur a rollover fee.

How to calculate rollover rates

Traders can calculate swap fees using Deriv’s swap calculator, which is computed based on the size of the trade (volume), the contract size (forex is 100,000), the point value/digits of the currency pair (0.00001 or 0.001), and most importantly, the difference in interest rates between the two currencies of the trade (swap rate):

Swap charge = volume × contract size × point value × swap rate

For example, let’s say you want to keep two lots of EUR/USD with a swap rate of -0.12 open for one night. 

You will be charged a swap fee of 0.24 USD to keep the position open for one night. It is also important to be aware that on Wednesdays, the swap fee is triple to cover the weekend days when the forex market is closed. So for Wednesday rollovers, using the above example, you may face a charge of 0.72 USD rather than the usual 0.24 USD.

You can check the swap rates of specific forex currency pairs on our trading specification page.

Trading strategies to optimise rollovers

One strategy is to either buy currency pairs with positive interest rate differentials such as USD/JPY or sell pairs with negative interest rate differentials like USD/MXN. This results in earning rollover fees instead of having to pay them. However, because of the attractiveness to earn this “carry”, these positions are usually very crowded and susceptible to volatility and sharp reversals which could stop out positions.

On the other hand, traders who have short positions in pairs with positive interest rate differentials or long trades on pairs with negative interest rate differentials, may want to adopt a short-term, intraday trading strategy and close out their positions in these pairs before the daily rollover, particularly on Wednesdays to avoid being charged the triple swap fee. 

MT5 Swap-free account

For traders looking to completely avoid swap and rollover fees, Deriv offers the option to open an MT5 swap-free account. These accounts adhere to Islamic finance principles which prohibit the charging or receiving of interest. 

Overall, traders who understand the mechanics of rollovers and interest rate differentials can structure their forex positions to take advantage of earning swap fees or minimising any paid fees. Carefully planning entries, exits, and time around rollovers are key elements of an effective fee-reducing forex trading strategy. While managing rollover costs is essential, it's also crucial for forex traders to consider other risk management trading strategies.

You can open a demo or live trading account with Deriv here to explore how rollover rates work in forex pairs.

Disclaimer:

*Swap-free accounts are not available to clients residing in the EU.

The information contained in this blog article is for educational purposes only and is not intended as financial or investment advice.

Deriv MT5’s availability may depend on your country of residence.

Trading conditions may vary depending on your country of residence

You may also like:

https://blog.deriv.com/posts/whats-expected-in-gold-after-the-recent-rally/

https://blog.deriv.com/posts/commodity-market-rates-speculative-factors/

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Taming inflation 

Bloomberg: Former Treasury Secretary Lawrence Summers cautions against premature confidence in the Federal Reserve's success in taming inflation.

He notes that hasty declarations and recent market reactions suggest the battle may not be over.

Meanwhile, former Barclays CEO Bob Diamond prepares for further challenges in corporate debt, anticipating more credit issues ahead.

Gold and jobs

DoD and US Bureau of Labor Statistics and Reuters: Gold prices rose on Friday as the U.S. dollar and Treasury yields dipped following weak U.S. jobs data, reinforcing expectations that the Federal Reserve won't raise interest rates further.

Amid ongoing tension in the Israel-Hamas conflict, the U.S. Department of Defense confirmed the presence of special forces in Israel.

Nonfarm payroll employment increased by 150,000 in October, with some job gains in healthcare, government, and social assistance but a decline in manufacturing due to strikes.

The data strengthens the case for a Fed pause, supporting gold prices, according to Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

UK inflation

Bloomberg and Reuters: Bank of England Chief Economist Huw Pill anticipates UK inflation aligning with global lower rates due to reduced energy costs.

He expects a "sharp further fall" in October, bringing inflation below 5% and narrowing the gap between the US and the eurozone.

Interest rate cuts may wait until mid-next year from their 15-year high.

Investor sentiment

CNBC: To sustainably push above $2,000/oz, gold may await a clearer Fed signal on potential cuts and a resurgence of ETF investors, says Heraeus Metals.

Traders are indicating a 90% chance of unchanged rates in December, per CME FedWatch.

Speculators raised net long positions in COMEX gold futures by 15,661 contracts to 106,343 in the week ending Oct. 31, according to CFTC data.

Rate hikes

The Guardian: The RBA board's decision to raise its cash rate by 25 basis points to 4.35%, marking a 12-year high, was in line with economist expectations.

This marks the 13th rate hike since May 2022.

New governor Michele Bullock and the board had consistently signalled their intention to resume rate increases if inflation didn't align with their projections.

Notably, among the big four banks, only the National Australia Bank is forecasting another rate increase, projecting a 4.6% peak in February.

US credit card debt

CNBC and Bloomberg: Recent data from the Federal Reserve Bank of New York reveals that Americans' credit card debt has reached a staggering $1.08 trillion.

In addition, credit card delinquency rates have increased. 

Approximately one-tenth of credit card users are stuck in "persistent debt," where interest and fees surpass their principal payments.

The average annual percentage rate has also hit an all-time high, exceeding 20%.

Fed governor Michelle Bowman aims to use the federal funds rate to address inflation, but market sentiment suggests potential rate cuts next year.

EU recession

GBNews: The former president of the European Central Bank (ECB) has expressed concern, predicting a potential recession in the European Union (EU) by year-end. This warning comes amid the EU's challenges in recovering from the pandemic and Russia's ongoing conflict with Ukraine.

He emphasizes the need for a more unified and robust EU, encompassing foreign policy and defence capabilities alongside economic policies to ensure the union's survival. However, his prediction is more pessimistic than recent forecasts from the ECB or IMF.

Gold economics

Reuters: Gold prices retreated for a third consecutive session today, with investors closely monitoring cues from the U.S. central bank on interest rates.

According to Daniel Ghali, a commodity strategist at TD Securities, the direction of gold will be influenced by economic data and the U.S. central bank's actions. The risk premium associated with the Israel-Hamas conflict is also diminishing.

However, any escalation in the conflict could drive gold prices higher, as noted by Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

Inflation

Reuters: Federal Reserve officials, including Chair Jerome Powell, expressed uncertainty about whether current interest rates are sufficient to combat inflation.

Powell noted the limited impact of supply improvements on curbing price increases.

Interim St. Louis Fed President Kathleen O’Neill Paese emphasized the ongoing economic uncertainty, stating, "It would be unwise to suggest that further rate hikes are off the table."

The stock market’s winning streak came to an end on 09 Nov 2023. 

Australian economy

Wall Street Journal: The Reserve Bank of Australia raises near-term core inflation forecasts, highlighting slower-than-expected cooling of inflation pressures.

Despite passing its peak, inflation remains persistently high, exceeding earlier expectations.

The economy's unexpected resilience prompts the RBA's upward revisions in GDP growth and unemployment projections.

While soft GDP growth is anticipated, a gradual strengthening is forecasted from mid-2024, reaching around 2.25% by end-2025.

Disclaimer: 

The information contained in this blog is for educational purposes only and is not intended as financial or investment advice. It is considered accurate at the date of publication by the sources. Changes in circumstances after the time of publication may impact the accuracy of the information.

Past performance is not indicative of future results. Doing your own research before making any trading decisions is recommended.

You may also like:

https://blog.deriv.com/posts/what-is-margin-in-forex-trading/

https://blog.deriv.com/posts/what-are-rollovers-how-they-affect-forex-trading/

https://blog.deriv.com/posts/what-influences-commodities-market-prices/

This article was updated on 17 January 2024

The Oscar's Grind strategy is designed to potentially gain a modest yet steady profit in each trading session. This strategy splits trades into sessions and has three principles.

Trade parameters

• Initial stake: The amount you pay to enter a trade.
• Profit threshold: The bot will stop trading if your total profit exceeds this amount.
• Loss threshold: The bot will stop trading if your total loss exceeds this amount.

Principle 1: The strategy aims to potentially make one unit of profit per session

The table above demonstrates this principle by showing that when a successful trade occurs and meets the target of one unit of potential profit, which is 1 USD in this example, the session ends. If trading continues, a new session will begin.

Principle 2: The stake only increases when a loss trade is followed by a successful trade

The table illustrates this principle in the second session. After a trade resulting in a loss in round 4, followed by a successful trade in round 5, the stake will increase to 2 USD for round 6. This is in line with the strategy’s rule of raising the stake only after a loss is followed by a successful trade.

Principle 3: The stake adjusts to the gap size between the current loss and the target profit for the session.

In round 7, the stake is adjusted downwards from 2 USD to 1 USD, to meet the target profit of 1 USD.

The stake adjustment: target session profit (1 USD) - current session profit (0 USD) = 1 USD

The second session concludes upon reaching the aim of one unit of potential profit per session, equivalent to 1 USD. If trading continues, a new session will commence again. 

Profit and loss thresholds

With Deriv Bot, traders can set the profit and loss thresholds to secure potential profits and limit potential losses. This means the trading bot will automatically stop when the profit or loss threshold is reached. This form of risk management can potentially boost successful trades whilst limiting the impact of loss. For example, if a trader sets the profit threshold at 100 USD and the strategy exceeds 100 USD of profit from all trades, then the bot will stop running.

Summary

The Oscar's Grind strategy provides a disciplined approach for incremental gains through systematic stake progression. When integrated into Deriv Bot with proper risk management, like profit or loss thresholds, it offers traders a potentially powerful automated trading technique. However, traders should thoroughly assess their risk tolerance and try trading on a demo account to familiarise themselves with the strategy before trading with real funds.

Disclaimer:

Please be aware that while we may use rounded figures for illustration, a stake of a specific amount does not guarantee an exact amount in successful trades. For example, a 1 USD stake does not necessarily equate to a 1 USD profit in successful trades. 

Trading inherently involves risks, and actual profits can fluctuate due to various factors, including market volatility and other unforeseen variables. As such, exercise caution and conduct thorough research before engaging in any trading activities.

The information contained in this blog article is for educational purposes only and is not intended as financial or investment advice.

Deriv Bot is unavailable to clients residing within the EU.

You may also like:

https://blog.deriv.com/posts/exploring-the-dalembert-strategy-in-deriv-bot/

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https://blog.deriv.com/posts/what-are-rollovers-how-they-affect-forex-trading/