News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Myth or fact? One thing is for sure, there are a lot of misconceptions about trading. Knowing the difference between common trading myths and the reality is essential to long-term success. Find out about these 'myths' here: https://t.co/EDvQdHfIPm https://t.co/OD2HjojJ9f
  • Gold has set a fresh 7 month low - testing below a huge spot of confluent support ahead of month-end the break happened overnight, and we've now seen about 7 hours of posturing above the 1750 level $Gold $GC $GLD https://t.co/QsFNeU4E9J https://t.co/hkHqj97Vap
  • AUD/USD IG Client Sentiment: Our data shows traders are now net-long AUD/USD for the first time since Feb 02, 2021 when AUD/USD traded near 0.76. A contrarian view of crowd sentiment points to AUD/USD weakness. https://www.dailyfx.com/sentiment https://t.co/izRyhYLOFW
  • Central banks often deem it necessary to intervene in the foreign exchange market to protect the value of their national currency. Learn how central bank intervention can impact your trading here: https://t.co/8G8mUX4so6 https://t.co/Z7TayeGRXB
  • 🇿🇦 Balance of Trade (JAN) Actual: ZAR11.83B Expected: ZAR15.2B Previous: ZAR32B https://www.dailyfx.com/economic-calendar#2021-02-26
  • 🇮🇳 GDP Growth Rate YoY (Q4) Actual: 0.4% Expected: 0.5% Previous: -7.5% https://www.dailyfx.com/economic-calendar#2021-02-26
  • 🇲🇽 Balance of Trade (JAN) Actual: $-1.236B Previous: $6.262B https://www.dailyfx.com/economic-calendar#2021-02-26
  • 🇧🇷 Unemployment Rate (DEC) Actual: 13.9% Expected: 13.9% Previous: 14.1% https://www.dailyfx.com/economic-calendar#2021-02-26
  • S&P 500 back down to support area (3805-10) https://t.co/VgJHDImfZY
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 91.38%, while traders in GBP/JPY are at opposite extremes with 70.18%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/XtCpP1uEI6
Video: Global Monetary Policy is Turning, Will the Markets?

Video: Global Monetary Policy is Turning, Will the Markets?

John Kicklighter, Chief Strategist

Talking Points:

  • While the Federal Reserve started tapering 3 years ago, global monetary policy is still at record highs in 2016
  • Yet, the effectiveness of stimulus on growth and markets is fading; and the pace of its expansion waning
  • The ECB, BoJ and BoE are the current champions of easing; but lost traction on their efforts may signal a tide change

Sign up for the FOMC rate decision event and see what other live coverage is scheduled to cover key event risk for the FX and capital markets on the DailyFX Webinar Calendar.

Monetary policy has proven one of the most persistent fundamental influences in the global financial markets through this bullish cycle, but is the tide changing? Central bank accommodation has offered a stable platform for recovery from the Great Financial Crisis, but its limitations have grown increasingly apparent in recent years as central banks have continued to employ crisis-era tools to simply lackluster growth. And, the results have grown increasingly ineffectual. The upgrades needed to effect similar economic accelerations to previous years grow larger and larger while the practical capacities grow ever more apparent.

The risks of a market discovering that the central banks are losing traction and/or are starting to capitulate in their efforts is that much of speculative drive we seen in this period of buoyancy was founded on the distortion created by this collective group. Economic activity has plateaued, revenues have struggled with GDP and low yields were the price of admission for this temporary curb on volatility. If confidence in a steady market were to evaporate, the environment would offer little appeal to maintain - much less further extend - the extreme exposure held on the market's balance sheet. The gap between the cost to participate in the market (the S&P 500 is a good benchmark) and the basic risk-reward balance (10 year yields over global volatility) is worrying.

It may seem that the end to stimulus is far off into the future, but the turning tide is likely far closer than most suspect. The Fed has already tapered its QE, the SNB has seen its efforts broken by the markets and the PBoC is attempting to balance a delicate economic act. Yet, even the world's most prominent doves are facing limitations. The Bank of Japan (BoJ) has unofficially capitulated form their ever-expanding effort by changing their target to the 10-year JGB yield. From the Bank of England (BoE), the newness of the stimulus is easily outstripped by its limited size. Even the European Central Bank's (ECB) recent extension draws practical issues and a clear deceleration of expansion. Add to failing light of the ever expanding stimulus era a rise in dubiety as to its effectiveness, and we are reminded that manufactured optimism is riding on borrowed time.

To receive John’s analysis directly via email, please SIGN UP HERE

Video: Global Monetary Policy is Turning, Will the Markets?Video: Global Monetary Policy is Turning, Will the Markets?Video: Global Monetary Policy is Turning, Will the Markets?

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES