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
Bullish
Oil - US Crude
Mixed
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
Wall Street
Bullish
Gold
Mixed
GBP/USD
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
USD/JPY
Mixed
More View more
Real Time News
  • The Indian Rupee has been rising despite a surge in local Covid cases, owing to rising yields amid a temporary flood of US Dollars into the banking system. INR remains at risk, eyeing CPI data. Get your market update from @ddubrovskyFX here:https://t.co/6r7hahVtx4 https://t.co/a0z46Q0Mn4
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/tnF1RME8gJ
  • Top event risk on my radar for the week ahead: Musk on SNL (Sat); run of Fed speak with Brainard, Williams, Bostic (Tues); US CPI and UK GDP (Wed); Mexico central bank rate decision (Thur); US earnings - PLTR, BABA, ABNB, DASH, DIS (Tues-Thur). What are you watching?
  • It starts. This man is living the life. https://t.co/YhD4oMNAFG
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.82% 🇦🇺AUD: 0.77% 🇨🇭CHF: 0.75% 🇳🇿NZD: 0.62% 🇯🇵JPY: 0.46% 🇨🇦CAD: 0.23% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/j5I6Gut0CR
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Gold: 0.85% Silver: 0.53% Oil - US Crude: -0.18% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/wZsuyfwuv1
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 88.33%, while traders in Wall Street are at opposite extremes with 77.43%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/IrlL0LEJe3
  • Fresh projections coming out of the Bank of England (BoE) instills an improved outlook for the $GBP. Get your market update from @DavidJSong here:https://t.co/BNicSsCTZG https://t.co/2tjCVIx1Vp
  • Gold Price Forecast: Gold Bulls Re-Ignite Big-Picture Bullish Trend https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2021/05/07/gold-price-forecast-gold-bulls-re-ignite-big-picture-bullish-trend.html $Gold https://t.co/TaJCgg0w0T
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: France 40: 0.24% Germany 30: 0.17% FTSE 100: 0.17% Wall Street: 0.01% US 500: 0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/WlYaH7FiDo
Buy the Rumor, Sell the News Logic on Brexit, Fed Hikes, US Policy

Buy the Rumor, Sell the News Logic on Brexit, Fed Hikes, US Policy

John Kicklighter, Chief Strategist

Talking Points:

  • 'Buy the rumor, sell the news' is a frequently used platitude in trading that overly simplifies reality
  • The 'buy the rumor' component speaks to speculation guiding market levels but 'sell the news' is rarely wise
  • We consider this particular trading aphorism with the recent Brexit milestone, FOMC hike and US policy promises

See what live coverage is scheduled to cover key event risk for the FX and capital markets on the DailyFX Webinar Calendar.

'But the rumor, sell the news.' Most traders have heard this said...and most traders have said it themselves. This popular market maxim has a core of wisdom to it. However, it also has its detrimental balance of over-simplification. At its core, this aphorism speaks to the speculative influences behind the market. Well before a piece of data hits the wires or a policy is implemented, anticipation of this event risk motivates the trading rank to position before it is confirmed. By the time this evolution is realized by the 'mainstream', the deft speculator has presumably sapped the bulk of value from the trade and uses this last infusion of late-comer capital as liquidity for their exit. If only reality lived up to such self-aggrandizing.

Such an idealistic view of the flexible and cunning speculator overpowers the practicalities of the rumor-news considerations. Evoking this mantra can help call into perspective the influence of speculation on dictating market direction and speed. Markets operate on a sense of probability - which is to say speculation. Anticipation can build up an expected value of a market that is never realized by the particular outcome depended upon. The result is a dramatic market correction to rebalance to the new confirmation of reality. There is also the scenario where the forecast proves correct, and some or all of the value has already been drained from the market. It is the event - technical, fundamental, systemic - that ultimately determines whether the build up was valid. That uncertainty paired with the leverage of exposure creates significantly greater risk. When we follow the 'buy the rumor, sell the news' maxim without considering the full nature of the strategy and uncertainty behind our exposure; we trade a full-fledged strategy and analysis for a flippant saying.

There are a number of examples of this popular view on the market that have or are currently taking place now. The most prominent this past session was the speculation surrounding the Brexit. The UK Prime Minister sent the official letter of intent to withdrawal her country from the EU. This was a fully expected step in the saga of this European divorce and lays the long road to full separation clearly before us. And yet, there was still anticipation that a dramatic reaction was due from the Pound. The Sterling didn't collapse upon the news nor did it rally as the clever speculators following the mantra might expect. Pairs like GBP/USD merely leveled out. Similar progressions of realized but over-simplified views along these lines were afforded to the FOMC rate hike on March 15 and the amorphous speculation surrounding US policy. We discuss the wisdom and limitations of 'buy the rumor, sell the news' in today's Strategy Video.

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

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

DISCLOSURES