EUR/USD: Why the rate differential still sets the ceiling on any euro rally
Every euro rally of the past two years has run into the same wall: the spread between what the market…
Tag: Federal Reserve
Every story we have filed in this section, newest first.
Central banks: what a policy statement actually tells you, line by line
The rate decision is rarely the news. The market trades the changed adjectives, the vote split and the projections —…
News
Bond yields are the FX market’s nervous system: a practical guide
If you trade currencies without watching the curve, you are reacting to moves that were already visible somewhere else twenty minutes earlier.
Analysis
Weekly forecast: the US dollar and the three questions that decide the week
A scenario framework for the dollar index rather than a single prediction: what has to happen for each path, and the level that invalidates it.
Central Banks
Why inflation data moves currencies less than the reaction function does
A hot inflation print is only bullish for a currency if the market believes the central bank will respond to it. Half of macro trading is…
Bonds & Rates
The yield curve, read properly: what inversion does and does not predict
Inversion is the most over-quoted signal in macro. What it actually encodes is an expectation of future easing - and the lag between signal and event…
News
Labour market data: why the unemployment rate is the least useful number in the report
The headline everyone quotes is a ratio with a moving denominator. The numbers that shift rate expectations sit further down the release.
Central Banks
Forward guidance: how central banks move markets without moving rates
Policy works through expectations, not through the overnight rate itself. That makes the words a committee chooses a policy instrument in their own right.
Central Banks
Quantitative tightening: the balance sheet as a policy tool
Shrinking a central bank balance sheet removes a price-insensitive buyer from the bond market. The effect is slow, hard to measure, and occasionally abrupt.