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Navigating the Curve: Backwardation and Contango in Futures Markets

Backwardation and contango are terms used in the context of futures markets to describe the relationship between the prices of futures contracts with different expiration dates for a specific underlying asset, such as commodities, currencies, or financial instruments. In this article, we aim to explain these terms within the context of futures cont...

August 21, 2023
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Averaging down: A Risky Move or a Smart Strategy?

Averaging down is an investment strategy in which an investor purchases additional shares or other assets at a lower price than their initial purchase price. This strategy is employed when the price of the asset has declined after the investor's initial purchase. Through buying more of the asset at a lower cost, the average cost per unit or share d...

August 21, 2023
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Upcoming Nvidia earnings: Has the AI hype cooled?

Nvidia has been the star of the US markets since the AI hype kicked off late 2022. The trillion-dollar chip manufacturer’s shares have almost tripled in 2023 alone, with the price increasing every month so far this year. In May, Nvidia surprised the markets by posting earnings and revenue figures well above analysts’ expectations. This se...

August 21, 2023
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FX Analysis – CNH strengthens on intervention talk – JPY breaks losing streak – Gold breaks key support

FX WRAP USD was choppy with the US Dollar Index ending the session flat in range bound trade. Unemployment claims dropped to 239k from 250k the prior week which was in line with consensus and having little effect on the USD, though Philly Fed Manufacturing figures did have a big beat coming in at +12.0 vs an expected -9.8, which was the highest ...

August 18, 2023
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Asian Open – Hawkish FOMC sees US stocks slide again, USD rally. JPY clobbered, AUD dips ahead of Jobs Data.

Asian indices are looking to open soft in Thursday’s session after major US Indices extended their sell-off in Wednesdays session on stronger than expected US data and a “hawkish” FOMC minutes where Fed officials saw ‘upside risks’ to inflation possibly leading to more rate hikes. The Russell 2000 led losses (-1.28%) in the US on the cont...

August 17, 2023
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Market responses to actual versus consensus numbers in data releases

As traders and investors one of the important facts you need to get to grips with is the difference between Consensus (sometimes termed “expected”) and actual data. Variations in these can have a profound impact on asset prices and so are often part of your decision-making.   In financial markets, the "consensus" refers to the average or m...

August 16, 2023
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Key market data explained: The Non-farm Payrolls

The Non-Farm Payrolls (NFP) is one of the most significant economic events data release of the month and is released on the first Friday by the U.S. Department of Labor. It is a comprehensive snapshot of the current state of US employment, and encompasses the total number of paid employees in the U.S. economy, excluding agricultural, government, pr...

August 16, 2023
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Understanding market data: Purchasing Managers Index (PMI)

The Purchasing Managers' Index (PMI) is an economic indicator used to measure the health and activity level of a specific sector of an economy, namely the manufacturing or services sectors.  PMI data is published on a monthly basis and is of three types: Manufacturing PMI: This is the most well-known type of PMI. It measures the health of ...

August 16, 2023
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Understanding the US Dollar Index

The U.S. Dollar Index (USDX, DXY, DX, or, informally termed “the Dixie") is a measure of the value of the United States dollar relative to a basket of foreign currencies. It is often used as an indicator of the overall strength or weakness of the U.S. dollar in the foreign exchange market.  Changes in the index value reflect shifts in the rel...

August 16, 2023
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Aussie dollar has room to fall if the current support level fails.

The AUD/USD pair has had a tough month, falling relatively consistently since mid-July. This decline can be attributed to several factors, most notably the strengthening of the USD driven by the Federal Reserve's firm commitment to ‘higher for longer’ rates, aimed at taming inflation to meet target levels. Another contributing factor to the ...

August 14, 2023
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Bid-Ask Spread explained: What Traders Need to Know

The bid-ask spread is the difference between the highest price a buyer is willing to pay for an asset (the bid) and the lowest price a seller is willing to accept to sell it (the ask or offer).  This spread is a fundamental element of market liquidity and represents the transaction cost that traders need to consider when entering and exiting po...

August 14, 2023
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The Economics of Currency Pegs: Stability vs. Risk

A currency peg is a policy in which a country's government or central bank fixes the exchange rate of its currency to the value of another currency or a basket of currencies. The pegged rate is enforced by the country's central bank, which will exchange currency at that rate. Commonly, countries that participate in this practice prefer to peg th...

August 14, 2023
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Understanding Monetary Policy: A Guide to Hawkish and Dovish Approaches

Familiarity with terminology used in financial markets is arguably highly important for those investing in financial products. This understanding can assist with both entry and exit decision-making in the context of an individual's risk profile and objectives.  Two terms that are often used to describe the overall position of a central bank are...

August 14, 2023
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Crude Realities: The extent of OPEC’s influence on financial markets

OPEC stands for the Organization of the Petroleum Exporting Countries. Founded in 1960, OPEC's main objective is to coordinate and unify the petroleum policies of its member countries to secure fair and stable prices for petroleum producers.  This article briefly outlines who this organisation is and their significant influence on the pricing o...

August 14, 2023
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From Data to Dollars: An introduction to Quantitative Trading

Quantitative trading, often referred to as quant trading, is a trading strategy that relies on the use of mathematical models, statistical analysis, and data-driven approaches to make trading decisions. Often associated with the creation of specific automated trading systems, terms Expert advisors (EAs) on MetaTrader platforms, it a perceived as a ...

August 14, 2023
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