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What's going on? Print

Notice how, on the run up to major news announcements, market commentators, almost collectively, form a consensus view and then extrapolate that view to what is usually a cataclysmic end result.

Prior to the Sunday elections in Austria and Italy, one could have been forgiven for thinking the Euro was about to collapse once again and the long awaited parity with the US$ was just around the corner. But wait, what the Euro did was breathe an enormous sigh of relief as it gapped lower and immediately reversed for it's best one day rally in months.

Those commentators were still worrying about Italian and German banks failing and bringing down the Euro. The reality is that, despite tumbling on Monday, Italian bank shares have since recovered, up almost 10% so far, as some form of bail out is now expected. And what of Deutsche Bank's share price that spiralled down during 2016 until Trump was elected, resulting in a 40%+ rally so far. As an aside, it seems Trump has almost $400million in mortgage finance from DB!


From the blog

Canada tightens...

 We just had Canada pop their overnight interest rate up from 0.5 to 0.75%, a 25 basis point rise as they say in the trade. It's taken them 7 years to do it and marks the end ultra cheap money that kicked off the crazy housing market with valuations way above the reach of the average Canadian.  Now they are confident the economy is sound and the oil price, on which the economy largely depends, has stabilised in recent months. So much for the announcement, you can read the story here, but it's the chart USDCAD that has been looking very interesting for some time.


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