China Rate Cut Boosts Flagging Risk Sentiment

Geopolitical tensions between Russia and Ukraine are coming to a decisive point. Commodities are bid with oil prices at multi-year highs. Bond yields are a keen focus of many market observers as the widely followed US 10-year Treasury yield climbed above 1.90% before moderating. Wall Street continued lower overnight, but US stock futures are in the green and Asian markets have broken a five-day slide, helped by a mortgage rate cut in China.

This rate move mirrors the policy cut earlier in the week. Most importantly, these actions show that the authorities are being proactive to support economic growth and comes along with news stories that Chinese regulators are considering measures to support struggling real estate developers.

Mixed bag in stock markets

Yesterday saw the US stock markets take out key support levels as the rotation between sectors continued. The tech-laden Nasdaq entered correction territory having fallen over 10% from a November high.

NASDAQ 100 daily chart

The S&P 500 is down around 5% this year and broke below the 100-day simple moving average that has provided support for the index over the past sixteen months.

Key levels on the S&P500 include the September 2021 high at 4552 and the recent December low when prices fell to 4496. The daily RSI is not oversold currently though futures markets are pointing to markets trying to gain a foothold above September support.

S&P 500 Daily chart

Oil and commodities continue higher

Oil markets rose to yet another high in seven years though has eased slightly, after the International Energy Agency (IEA) said oil demand is on track to hit pre-pandemic levels. Industrial metals have also been rallying recently, aided by China’s pledge for more support and dollar weakness. Nickel is up more than 11% so far this year.

Commodities are regarded by some as a hedge against inflationary pressures and the current multi-decade highs seen in CPI data across the globe is certainly helping to fuel the rally. Supply chain bottlenecks have also done little to improve supply and demand dislocations.

Brent daily chart

Gold breaks out above key resistance

The shiny metal has risen to its highest level in two months as some investors bought in to hedge against higher inflation. Gold has been fairly rangebound recently caught between the rising dollar and surging real yields.

Yesterday’s breakout above the resistance area around the July and September 2021 highs at $1834 could see bugs push on the November top at $1877. As wages and energy prices continue to climb, increased stock market volatility and geopolitical concerns all support the potential for higher prices.

Gold daily chart

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Mid-Week Technical Outlook: Oil Hits Fresh 7 Year High

Buying sentiment towards the global commodity was boosted by supply disruptions coming from Turkey, while the International Energy Agency’s (IEA) bullish outlook on oil markets fuelled upside gains. As fears fade over the demand impact from Omicron and supplies are tightened by a range of outages across the globe, this could propel prices higher. We are just three weeks into the New year but both benchmarks are up almost 15%! It will be interesting to see whether the current upside momentum and fundamentals inspire a move towards $100.

Speaking of prices levels, oil remains bullish on the daily, weekly, and monthly timeframe.

Brent journeys towards $100…

Brent is trading around $87.90 as of writing. This is roughly $12 away from the big $100 level. It is worth keeping in mind that the last time Brent saw $100 was back in 2014.

Looking at the technical picture, there have been consistently higher highs and higher lows. The technical and screaming further upside but it may be worth keeping a close eye on the fundamentals. A solid breakout above $90 could open doors towards $92.40 and $97.00 before the big $100.

Should bulls lose steam before reaching $90, a decline back below $85.80 could be a possibility.

Brent daily chart

WTI Crude not far behind

We see a similar story on WTI Crude as bulls push prices closer to the $100 level.

Prices are trading above the 50, 100, and 200-day Simple Moving Average while the MACD trades to the upside. A strong move above $90 could signal an incline towards $94 and $98 before testing $100.

Alternatively, a drop back below $84.20 may inspire bears to target $78.00.

WTI daily chart

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Key Milestones of the Financial Market in 2021

The year 2021 was packed with exciting developments and meaningful circumstances in world affairs—its economy, politics, and policies—impacting the financial sector as a whole. With the help of its analytics team, the international Forex broker OctaFX compiled a basic rundown to deliver some of the more critical, vital events which it deemed especially important.

The U.S. dollar’s tumultuous journey through quantitative easing (QE)

During the COVID-19 crisis, the U.S. Federal Reserve (Fed) and the European Central Bank (ECB)—the central banks that issue the world’s reserve currencies—flooded the financial markets with new money. The official reason stated was helping the suffering economy because of the pandemic.

Therefore, U.S. president Joe Biden’s proposal of a 1.9 trillion USD stimulus package to Congress arrived on 21 January. The Republican Party was highly sceptical about this approach—some congressmen even recalled the already worrying, continual growth of the national debt (a mass total of 21.6 trillion USD at the time). It is a long-term development whose lack of resolution as of yet does not shake the market’s firm belief in the reliability of the U.S. dollar.

Biden follows suit by signing stimulus plan

Fast forward two months, the U.S. Senate (6 March) and the U.S. House of Representatives (10 March) both approved the stimulus plan before Biden signed it on 11 March as a 1.9 trillion USD economic rescue package. Far from being a bipartisan undertaking, no Republican approved the new order. Although, the document was amended, for example, the clause on raising the minimum wage was removed. New money flooding the market like this filled most market participants with a bullish sentiment.

Another 1.2 trillion USD for ‘infrastructure spending plan’

Towards the end of June 2021, expectations for a tight monetary policy were running high but then the U.S. Senate agreed on and approved a new ‘infrastructure spending plan’, totalling another 1.2 trillion USD. The reason was a sharp increase in inflation in the months prior to June.

Both institutions—the Fed and the ECB—have kept rates at zero or negative and implemented quantitative easing (QE) throughout 2021, increasing their balance sheets and buying bonds with that money. Because of this, their yields fell, which encouraged investors to put capital into companies’ stocks and look for other projects.

Fed announces the end of bailout measures

In September, the U.S. Federal Reserve officially declared that it is ready to end its quantitative easing programme and may raise the base rate already from 2022 rather than 2023, as previously assumed. The Fed further added it would continue to buy 120 billion USD worth of assets each month for the time being: 80 billion USD in treasuries and 40 billion USD in mortgage-backed bonds.

The regulator’s rhetoric initially spooked investors, but overseas markets moved higher on 23 September. The American S&P 500 was recovering from a marginal fall and rose by 1%. Finally, the U.S. monetary regulator started winding down asset purchases from the market to 105 billion USD in November (from 120 billion USD previously) and to 90 billion USD in December—strong signals for the market that the economy starts to revitalise itself.

Bitcoin reaches historic ATH in April before falling again by 53%

The whole of April, the crypto industry radiated with enthusiasm over an ongoing bull market before bitcoin—surprisingly to most—started a steep correction from a historical all-time high of 63,500 USD (13 April 2021) to 34,600 USD (29 May 2021). In those first initial waves downward, due to triggered margin calls, around 8 billion USD in position liquidations took place. This process had put most of the trading community on a new kind of alertness.

This downtrend continued up to 20 July 2021, reaching a price of 29,600 USD per bitcoin (that’s over 53% from the previous all-time high). Only after that point did an uptrend start with a late-summer high of 52,600 USD (6 September 2021). Most were sure the bottom for bitcoin back then had been hit and more frequent but careful trading resumed during that time.

Ethereum stays strong but stable while bitcoin tops twice more

Six weeks later, the mother of all cryptocurrencies topped off its previous all-time high twice in close succession—65,990 USD (20 October 2021) and 67,500 USD (8 November 2021), vindicating a suspected bull market across market observers, retail investors, and legacy institutions once again. All the while, the altcoin market soldiered on with a fluctuating performance, seeing Ethereum’s persistence and some success stories such as the Solana smart-contract platform.

The latter rose from 1.84 USD on 1 January to its all-time high of 258.93 USD on 6 November, gaining 13,972%. Many opportunities for lucrative trades and initial long-term investments were realised. At the same time, some solid altcoin projects stagnated during this period, only showing that their turn for growth has yet to come.

U.S. and E.U. prioritise the basic materials sector

In autumn, the E.U. and the U.S. have agreed to suspend duties on steel and aluminium products. During a speech, the President of the European Commission, Ursula von der Leyen, stressed that her institution planned to develop proposals to suspend duties imposed on goods from the U.S. She elaborated that this would bring trade in steel and aluminium products back to their levels before these tariffs were imposed in 2018.

U.S. President Joe Biden reiterated the intentions of the European Union and the United States jointly committing to a carbon-based agreement on steel and aluminium trade. After President Trump’s era of ‘economic isolationism’, many investors in the relevant industries understood this development as a bullish long-term sign.

European Union at a crossroads

In 2021’s fourth quarter, the euro fell to its lowest value since the start of July 2020. The reason for the plunge was the worsening business climate in the E.U.

In Germany, supply problems within most industries have worsened. Berlin, as the fourth-biggest economy in the world, also inaugurated its new government in December. One important aim of the new coalition is to introduce a wide variety of new taxes on secondary homeownership and carbon emissions on all levels, be it corporate or private. Germany is a major player in the European Union’s power dynamics structure. Its new government in Berlin will have much to say about the way onwards in terms of the continent’s financial and political development.

What the future holds

As Powell hinted throughout the year, in January 2022 there will be a monthly quantitative easing cap of 60 billion USD, halving the 2021 rate and initiating a probable and gradual farewell to the emergency policy. A process that market participants of all shapes and sizes (private and corporate) will have to pay close attention to.

All of the dynamics above will have exciting new developments in 2022 and the years after—many of which will hit most by surprise. So, financial education and constant research and training towards economic and financial literacy are paramount to navigating through these fast-paced markets. This plain truth applies just as much to Foreign Exchange as it does to the stock market or the cryptocurrency domain.

About OctaFX

OctaFX is a global broker that provides online trading services worldwide since 2011. It offers a state-of-the-art trading experience to over 7.5 million traders worldwide. The company is well-known for its financial expertise, analytics, and educational programme. It maintains a high emphasis on financial literacy in its trading community. OctaFX has also won more than 45 awards since its foundation, including the 2021 ‘Best Forex Broker Asia’ award and the 2020 ‘Most Transparent Broker’ award from Global Banking & Finance Review and Forex Awards, respectively.

 

RoboForex Received 3 Awards at the Traders Union Awards 2021

January 18, 2022

Belize City, Belize

RoboForex, an international broker, received 3 awards at once within the frameworks of Traders Union Awards 2021. The company was recognised as the best in the following nominations – “BEST BROKER OF THE YEAR”, “BEST TRADERS UNION PARTNER”, and “MOST PROFITABLE BROKER”.

Annual voting was held by the Traders Union Awards from 1 to 30 December 2021. The nominees are brokerage companies, the best of which were chosen by over 200,000 participants of the Traders Union and visitors of its website.

Robert Stephenson, Chief Business Officer at RoboForex: “We’re very pleased that so many participants of the Traders Union highly appreciate our work and name us the best in several categories at once. We’ve won awards from the Traders Union on many occasions. The company takes incredible delight in this success because it means that the world’s biggest community of traders recognised us as the best among providers of financial services in the global market. We put a high value on this attention and are very thankful to our clients for their choice.”

The event is organized by the IAFT (Traders Union), which attracted a record number of the market participants, such as forex brokers and crypto exchanges, to become its partners. Awards received by the winners confirm their leading positions in the industry and recognition of the professional traders’ community.

About RoboForex

RoboForex is a company, which delivers brokerage services. The company provides traders, who work on financial markets, with access to its proprietary trading platforms. RoboForex Ltd has the brokerage license IFSC 000138/210. More detailed information about the Company’s products and activities can be found on the official website at roboforex.com.

Media contact:

Timofey Zuev, PR Manager at RoboForex

E-mail: mkt-pr@roboforex.com

Markets Wary Of Oil And Bond Yield Highs, As Focus Shifts To Corporate Earnings

Asian shares were a mixed bag on Tuesday due to the absence of cues from Wall Street following a national holiday in the United States. But European and U.S. equity futures are flashing red amid a jump in Treasury yields, as investors brace for the Federal Reserve to raise interest rates four times this year to tame inflation.

Brent crude ventured to its highest level since 2014 due to geopolitical tensions in the Middle East, while gold struggled for direction above $1810. In the currency arena, king dollar pushed higher while the yen weakened this morning after the Bank of Japan concluded a two-day policy meeting with no major changes.

This will certainly be a big week for financial markets as investors juggle the various themes influencing global sentiment. Equity markets will look to company results for some direction as the fourth-quarter earnings season gets into full swing. Reports from the US banks who have so far reported paint a mixed picture with JP Morgan Chase, a financial bellwether, closing down more than six per cent on Friday after the bank said rising costs would curtail profits in 2022 even as it posted record full-year earnings. Heavyweights such as Goldman Sachs and Bank of America, as well as Netflix among many others will be under the spotlight this week.

The burning question on the minds of investors could be what impact rising inflation and the emergence of the Omicron variant will have on final quarter earnings. Should we witness another mixed or disappointing week of results, this could sap more confidence from stock market bulls, especially when considering that the broader S&P500 index is already down over 2% so far this year.

A wild week ahead for the Pound?

The British pound could be injected with volatility this week due to the series of key economic reports and potential political drama at Westminster.

Market expectations already remain elevated over the Bank of England raising interest rates next month, with traders pricing in around an 91% chance of a 25bp rate hike. The argument for higher rates may be reinforced this week if the pending data meets or exceeds forecasts.

On the political front, Prime Minister Boris Johnson remains under pressure to resign over ‘partygate’. Given how it has been reported that as many as 30 letters of no confidence in Boris Johnson have been submitted by Tory MPs, things are bound to get heated. A total of 54 letters of no confidence would have to be submitted to Sir Graham Brady, chairman of the 1922 Committee of backbench MPs, for a vote to be held.

Looking at the technical picture, GBPUSD remains bullish on the daily charts. However, there seems to be resistance around the 200-day Simple Moving Average at 1.3734. A decline towards 1.3600 could be on the cards after such a strong run since the December lows, before bulls snatch back momentum for a push towards 1.3700 and 1.3830.

Commodity spotlight – Oil

Brent crude marched into Tuesday’s session, with prices climbing to fresh seven-year highs as geopolitical tensions bubbled in the Middle East. Iran-backed Yemini fighters claimed to have launched drone strikes on the United Arab Emirates, the third-biggest OPEC producer. Brent is up almost 2% this week and has appreciated close to 13% since the start of 2022. Prices are above $87.70 this morning, with bulls eyeing $88 and $90 as upside targets.

Commodity spotlight – Gold

Gold could be flung into the firing line this week if the dollar regains its mojo and Treasury yields rally. The precious metal has displayed resilience in recent sessions and even took advantage of a softer dollar to push back above $1810.

However, given gold’s zero-yielding nature, the path ahead could be bumpy and perilous for the precious metal as interest rate rises become a reality. Although other factors such as inflation risks and Omicron uncertainty may support gold bugs, the pressure is piling up on gold.

Looking at the technical picture, prices remain within a choppy range. A breakdown below $1810 could open the doors towards $1800, 1786, and $1770. Should $1810 prove to be reliable support, bulls may eye $1831 and $1845.

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Tickmill Live Webinar Jan 19: What’s in Store for 2022 – LIVE Panel

Join this star-studded panel to learn from the pros and get insight into the possible developments of the financial markets for the upcoming year!

The webinar series is for information purposes only and should not be considered as investment advice or research.

Date: 19 Jan 2022 18:30 GMT +00:00

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Crude Oil is Heading Towards Highs

So, the oil is trading close to its 7-year highs and market players are focused on nothing but positive news. On one hand, the oil price is supported by the fact that investors are absolutely sure of the stable and strong demand for energies. Some OPEC+ members are really behind the previously approved oil extraction plans – this is another reason for buying oil right now. on the other hand, Libya is back to its normal pace of oil production after repairing the pipelines. In addition to that, the rumour has it that China will sell oil from its strategic resources closer to the Lunar New Year. This news is rather negative for the commodity market.

Last Friday’s report from Baker Hughes showed that the Oil Rig Count in the US added 11 units, up to 492. The same happened in Canada, with +43 units.

In the H4 chart, having completed the ascending structure at 83.96 and broken this level, Brent continues trading upwards. Today, the asset may reach 87.55 and then start a new correction towards 80.00. Later, the market may form another ascending structure with the target at 91.00. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving above 0 inside the histogram area, thus indicating a further uptrend in the price chart.

As we can see in the H1 chart, after forming a new consolidation range around 84.12 and breaking it to the upside, Brent continues growing with the short-term target at 87.65. After that, the instrument may correct to return to 84.12 and then resume growing with the target at 91.00. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: its signal line is moving upwards to break 50 and may later continue growing to reach 80.

By Dmitriy Gurkovskiy, Chief Analyst at RoboForex

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Key Events This Week: Busy Week of Asian policy Meetings Amid Policy Tightening Angst

Here are the key economic events and data releases to look out for this week:

Monday, January 17

CNH: China 4Q GDP, December industrial production and retail sales
US markets closed for Martin Luther King Jr. holiday

Tuesday, January 18

JPY: Bank of Japan decision
EUR: Germany ZEW survey expectations
GBP: UK November jobless claims, December unemployment
Goldman Sachs Q4 earnings

Wednesday, January 19

EUR: Germany December inflation
GBP: UK December inflation
GBP: Bank of England Governor Andrew Bailey speech
Bank of America Q4 earnings
Morgan Stanley Q4 earnings

Thursday, January 20

CNY: PBOC loan prime rate decision
JPY: Japan December external trade
AUD: Australia December unemployment
EUR: European Central Bank publishes Dec meeting account
USD: US weekly initial jobless claims
US crude oil: EIA inventory report
Netflix Q4 earnings

Friday, January 21

JPY: Japan December inflation
GBP: BOE policy maker Catherine Mann speech, UK December retail sales
EUR: Eurozone January consumer confidence

The potential for the removal of the liquidity punchbowl (aka monetary policy tightening) is dominating the market’s thinking at present.

The strong US CPI report released last week added more pressure on the US Federal Reserve to stat lifting rates earlier than once thought, potentially as soon as March. We’ve had numerous FOMC members recently marking a more hawkish bias to the committee’s views, including notably, the fabled dove Brainard in her Fed chair nomination appearance before the Senate.

Another Fed official, Waller, also mentioned the chance of five rates hikes this year, although he doesn’t favour a 50bp hike in March. It’s worth remembering that it is a US holiday on Monday, so their markets are closed, and the blackout period has started before the next Fed meeting on 26 January so there won’t be any more Committee members to listen out for on the wires.

Company earnings also continue with more bulge bracket US banks releasing their fourth quarter results. US stocks notched their second straight weekly decline, pushed lower by disappointing earnings from financial industry bellwether JPMorgan Chase which has clouded an already mixed outlook for the US economy.

S&P 500 daily chart

Asian policymakers in focus

We kick off the week with Chinese fourth quarter GDP (4% y/y vs. 3.3% est.), as well as December’s industrial production (4.3% vs. 3.7% est.) and retail sales (1.7% vs. 3.8% est.). The full-year GDP came in at 8.1%, slightly above the median estimate by economists but well above the government’s 2021 target of over 6%. Still, the data confirmed that the final quarter was losing momentum but the real test for the domestic economy will come in the first quarter of this year, due to current regional lockdowns on top of the ongoing woes in the property sector.

With this in mind, the PBoC lowered both the one-year medium-term lending facility rate abd the seven-day reverse repurchase rate by 10 basis points respectively, a move not seen in nearly two years, and also injected more liquidity into the financial system via US$110 billion in loans.

The Bank of Japan meeting on Tuesday is also getting some airtime after “sources” said it is thinking of a rate hike at some point beyond this year and debating how to manage the messaging. Inflation is picking up and possibly risks to prices may now be described as “balanced” but hitting the 2% inflation target is still a long way off.

USD/JPY daily chart

UK data to add pressure to the BoE

We get the usual mid-month data dump in the UK with signals about labour market strength, the pace of consumer price inflation and retail sales. These are the last official updates before the BoE meeting on 3 February, with CPI expected to rise above the forecast 5% going forward and a labour marker remaining tight.

GBP/USD daily

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

What the Year of the Tiger Will Bring for the Asian Markets – A Conversation with Finalto’s Alex Yap

From a major rebranding exercise to upheavals in the Asian markets throughout the year, it was busy 2021 for Finalto. Who would know better about this than Alex Yap, Head of Institutional Sales for Asia at Finalto? Today, we are in conversation with Alex about how last year treated the leading fintech company and what his expectations are for 2022, the Chinese Year of the Tiger.

How has 2021 treated you and Finalto?

In general, we’ve done pretty well this year, despite the spread of the Delta variant during the first half of 2021. Without the luxury of travelling and meeting clients face-to-face, we’ve had to adapt quickly to new ways to connect with our clients. Our strong customer relationships and Finalto’s branding helped us grow even during this difficult year. I think it has been a good test for all of us, teaching us to respond to changes with agility and innovation. At this point, we’re more equipped than ever to continue on our growth path.

A lot of business in Asia is done face to face, how has this changed during these times?

Yes, Asia is known for its love of in-person conversations, which meant that we used to travel extensively. But now we and our clients have had to adapt to the new normal, relying on online interactions. Even simple Zoom calls have helped us stay in touch with our clients. It has only been thanks to tech innovations that we were able to effortlessly continue our services.

When the pandemic began in 2020, a lot of our clients were not initially comfortable with a completely digital approach. But people are resilient, and they have become much more comfortable over time with the new way of communicating, which is completely online. I can safely say that the pandemic has transformed the industry in Asia.

The Asian markets went through a lot last year, with the raging Delta variant in the first half and the energy crisis in China in the second. What’s your take on the Asian markets in 2021?

Yes, it was an eventful and extremely busy year for us. The Delta variant brought massive volatility back to the financial markets. But after the volatility of 2020, the markets adjusted quickly and settled down much faster in 2021. In fact, there were several months of low volatility last year, unlike in 2020. Even the news of the Omicron variant led to only a couple of weeks of higher volatility, after which the markets seem to have taken this fresh spread of Covid-19 in its stride. On the whole, volatility was lower than in 2020 and did not last as long. The markets adapted quickly.

Again, if you see the downgrade of the Asian markets by the IMF, it was much better than in 2020. They cut their outlook for Asia by about 1% to 6.5% in October. With economies reopening, demand grew but supply constraints continued, with OPEC deciding to continue with its production restrictions. As a result contracts for natural gas for November delivery rose to $6.466/MMBtu on October 5, the highest since December 2008. Natural gas prices in Europe rose fivefold, while in Asia, they were up 1.5 times. WTI rose to $80/bbl by the end of the first week of October, its highest since November 2014, while Brent was at its highest since 2018.

Global energy prices have normalised since then and had little to do with the energy crisis in China. China is aiming at becoming carbon neutral by 2060 and has set a challenging carbon dioxide emissions peak target to be met by 2030. The nation has been investing significantly in renewable energy. Plus, it has immense nuclear power capabilities. However, although it is the world’s third-largest user of nuclear power, this energy source accounts for only 5% of its energy mix as of 2020. Compare this to the 70% in France. So, the energy crisis can be averted by raising nuclear power consumption.

Where does Finalto see itself in the financial markets of the Asia-Pacific region?

Asia is a very diverse market. Not only does the level of sophistication differ from country to country, the needs and preferences also vary significantly. But, Finalto is a very strong brand, with a revolutionary 360 suite or what we like to call a “solution in a box.” It is highly customisable, offering multi-asset capabilities to our clients. Despite our marketing not being too aggressive last year, we were able to garner clients through our flexible pay-as-you-go subscription model, with customised pricing and product delivery.

This is a solution we have tailored specifically to offer powerful features, that our clients in Asia have yet to fully discover. So, for 2022, it is key for us to communicate the advantages we offer. This includes a complete end-to-end platform, with front-end and back-office administration capabilities, robust trading and pricing tools and cutting-edge connectivity. With our pay-as-you-go model, clients can either choose the full suite or select from individual components to enhance their current capabilities.

For instance, ClearVision is a leading tech solution for institutional investors worldwide and is gaining popularity among proprietary trading firms and brokers focused on global growth. Its various components include the ClearPro trading platform for professional traders, the ClearWeb cloud-based trading platform, the ClearMobile mobile trading platform and FIX Connectivity for custom needs.

How are the needs of fintech firms and traders in Asia different from the other regions where you offer your services?

As I mentioned before, this is a very diversified market. The level of tech sophistication in the region ranges from novice to very advanced levels. So, Finalto 360 is the ideal tool to cater to such diverse needs. Fintech is still in its nascent stages in many parts of Asia and the sector is still trying to establish a strong footing.

Then we have the huge cultural and language differences. To serve clients from Singapore as efficiently as those from Thailand or Indonesia, we need to provide localised services. With a pan-Asian team, we understand the way they run their business across these different nations and what they need. We can offer services and support in the language they prefer through Finalto 360. This is where we have an edge in the market.

With Finalto 360, we offer our clients a turnkey trading system based on a set of 5 cutting-edge modules developed by highly experienced industry experts, which offers complete support and scales with the client’s business.

What are your predictions for the Asian financial markets for 2022?

The markets across Asia will see economic recovery through 2022, although the pace will differ across nations. South Asia is expected to grow at the fastest rate in the region, with East Asia coming in a close second. This could be due to the regulatory reset in China, which could impact the 2022 GDP.

The Hang Seng contracted about 17% in 2021, while most key indices in Asia saw positive growth. In fact, it is the only one that has been on a downward spiral through last year, reaching a low of 23,192.63 on December 17. But I won’t be surprised if it bounces back strongly in 2022, so investors should keep a close watch.

The People’s Bank of China is unlikely to revise its interest rate policy anytime soon. On the other hand, it set a significantly weaker-than-expected midpoint for the yuan exchange rate in early December. The central bank indicated that this was in response to the high levels of foreign exchange reserves. This move could lead to greater liquidity in the economy, which will need to find outlets. In which case, we might see more interest in the stock markets from investors, especially true of Hong Kong, which is a key financial centre in the region.

On the other hand, inflation is likely to continue to be a key challenge in Asia in 2022. With the economies in recovery mode, demand could well outstrip supply, which will drive inflation up. And this is against the backdrop of supply chain disruptions.

Central banks, including the US Fed, are unlikely to moderate their policy tightening any time soon, which will also put pressure on assets. Central banks in Asia will, therefore, be keeping their eye on the Fed. Core prices have remained fairly flat so far, but this could change depending on how the interest rates are revised. In fact, if the Fed makes a drastic shift in its stance, we could see a rise in volatility in the financial markets.

Given the current inflation scenario in the US, I believe the FOMC could decide to make 2, 3 or even 4 rate hikes through 2022. We are likely to see some hikes very soon and I won’t be surprised if we see larger than expected rise. So, investors should also keep an eye on the Fed’s decisions, since it would affect markets globally.

Week In Review: Dollar Dips, Red Hot CPI, Disappointing Retail Sales

The mood across financial markets turned cautious on Monday as traders pondered the possibility of the Federal Reserve raising interest rates sooner than expected. Surging Covid-19 cases across the globe also weighed on sentiment, hitting appetite for riskier assets.

Our trade of the week was gold. We questioned whether the precious metal would be in trouble as rising inflation boosted expectations around for higher interest rates. On Tuesday, king dollar weakened, even after Federal Reserve Chairman Jerome Powell stated during his Senate confirming hearing that the central bank was likely to raise interest rates this year.

Mid-week, the US December inflation report showed prices rising at their fastest rate in almost 40 years! The consumer prices index (CPI) jumped to 7% year-on-year, up from 6.8% in November while matching the median forecast from economists surveyed by Bloomberg. We saw the Dollar Index (DXY) slam into 95.00 following the inflation report. Although markets initially offered a calm reaction to the CPI, equity bulls felt the burn on Thursday as rate hike bets rose.

Gold regained its mojo, deriving strength from a weaker dollar and slight pullback in Treasury yields. After experiencing sharp losses last week, the precious metal concluded this week roughly 1.2% higher.

All eyes were on the US retail sales on Friday which disappointed expectations. Sales fell by 1.9% in December, as worries over the Omicron variant and rising inflation hit spending. With this terrible combination hitting household consumption, this could weigh on economic growth in the final quarter of 2022. Interestingly, the probability of a rate hike in March stands at 91.5% as of writing.

In the FX space, the dollar staged a rebound on Friday but still ended the week lower against all G10 currencies. Oil posted a fourth straight weekly gain amid signs that the market is tightening as global consumption remains resilient in the face of Omicron.

In other news, earnings season kicked off with major banks under the spotlight. JPMorgan Chase, the Number 1 U.S. bank by assets showed profit and revenue that topped estimates. Citigroup beat revenue estimates but showed a 26% plunge in profits while Wells Fargo reported better-than-expected fourth-quarter results. With earnings season set to kick into higher gear in the week ahead as more companies publish their fourth-quarter results, it may be wise to fasten your seatbelts for potential volatility!

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Finalto Continues Its Expansion in Asia With the Appointment of Alex Wijaya as Finalto Asia Sales Director.

“I am really happy to join Finalto at this stage of expansion into the Asian market,” Alex says. “I feel my experience in the sector will really help to drive business and take Finalto Asia to the next level.”

Alex adds: “The Asia Pacific region will continue to grow in 2022. There will be plenty market opportunity in a year where the Fed raise the interest rates.”

Alex Mackinnon CEO Finalto Asia, comments,

“We’re delighted Alex is joining Finalto at this exciting moment for the company. With our incredibly strong product offerings in risk management, liquidity, trading and tech, we are making strong inroads in the Asian market and Alex will be a key player in our expansion here.

Alex will grow our Asian business from our Singapore office, where we already have an experienced sales and support team. Alex brings with him huge experience and industry knowledge and is an excellent fit for the Finalto family.

“Asia is a key focus for us this year as evidenced by the fact we recently added 32 leveraged equities belonging to some of the most prestigious companies listed on the Singapore Stock Exchange (SGX) to our already impressive list of offerings. The addition of the Singapore leveraged equities further establishes Finalto as a leader in the Asian market.”

Alex Wijaya has over a decade of experience working in forex. In the previous five years, he was instrumental in helping expand Axicorp’s Asia Pacific business. Prior to that, Alex handled high net worth clients at CMC.

Finalto are here to make the global financial marketplace work for you.

From liquidity, trading, and tech for businesses like hedge funds, brokers, and all types of financial institutions, to trading and investments for professional clients we have the scale and the expertise to give you total access to every part of the world’s markets.

 

Meet Nobility Token, a New Coin With Plans to Raise the Standard of Esports

This year, however, there’s a new buzzword coming to stake its claim. Gamefi is set to be the new rock and roll of the gaming community in 2022. The term is a mashup of blockchain technology, esports, and gamification and experts are predicting it will be a household name by the end of the year. One project hoping to be among the flagship Gamefi contenders is Nobility Token. The heraldic-themed altcoin, NFT, and play-to-earn project is just about to drop their white paper and has opened its whitelist which gives backers a guaranteed path to minting an NFT.

Nobility Token is the next logical step in the eSports arena. We’ve had in-game currencies for years now and there are now many professionals who make their living playing video games. Nobility Token is simply the common thread that connects those dots.” Kyle McDougal, CEO, Nobility Token

A noble benefactor

The team plan to use the proceeds from their launch to purchase and set up their game world in Decentraland and the Sandbox Metaverse. Once complete, it’s here that players from all over the world will compete in sponsored tournaments for real-world rewards. The knight-based theme behind Nobility Token will also play a big part in the gameplay and the token’s universe. The team is looking to launch their first play-to-earn, android-based, beta in the summer, with a full game launch planned for the last quarter.

A knight’s tale

The first step on the road to Camelot, so to speak, was $NBL’s successful ICO in June of last year. The developers added a nifty rewards tax built into each transaction. This pool forms the prize fund with which they hope to attract the world’s best gamers to their tournaments. Further down the line, there’s talk of actual bricks and mortar gaming centres as well as sponsorship and merchandising deals for the big players in the leagues. There’s even a knight-based animated series in the pipeline.

Join the crusade

The Nobility Token is about to release their white paper and they have opened their whitelist. So, if you’d like to make sure you get a shot at minting of their Noble Knight NFTs you can grab a White Shield Pass in advance. Right now, the team is inviting interested parties to make themselves known and join the project’s active social media channels and discussion groups.

You can find out more about the project here.

https://discord.com/invite/nobilitytoken

https://t.me/thenobilitytoken

https://www.reddit.com/user/nobilitytoken

https://www.instagram.com/nobilitytoken/

https://github.com/Nobility-Token

https://twitter.com/nobilitytoken

https://www.youtube.com/c/NobilityToken

 

OneRoyal Strengthens Its C-suite With Four Industry Professionals

In the strategic move, the broker, who holds CySec, ASIC, VFSC and FSA licenses, is bringing onboard Michael Karakatsianis for the position of the Group Chief Operating Officer. Prior to joining OneRoyal, Michalis had spent 3 years working as a COO for Skilling, and had worked for NAGA and FxPro before that.

OneRoyal’s new Chief Financial Officer, Stelios Christodoulou, is joining the team after spending more than 6 years as a CFO of FXPRIMUS. Stelios started his career with PWC, before switching over to forex and CFD firms, adding to over 15 years of industry experience.

As a Chief Marketing Officer, OneRoyal has tapped Sofia Mashovets, who left the position of CMO at Axiance in the fall 2021. Before spearheading the Axiance brand launch and leading the marketing team for a year, Sofia worked on a variety of fintech projects under the Axios Holding, as well as other blockchain and crypto projects, including PumaPay, one of the top ICOs in 2018.

For the Chief Technology Officer role OneRoyal tapped Panayiotis Annivas, who previously worked at TTCM Traders Trust, after holding C-level positions within the London Capital Group  and FXPro, bringing over a decade of technology experience.

Our newly hired professionals bring nearly 50 years’ of combined experience to OneRoyal as the broker gears up towards celebrating its 15 years of operation in 2022. The new hires join the Board of Executives who will have the authority to decide on the Company’s strategy.

“We have hired the new C-Level suite to help us implement our new vision and propel the company to the next level of success. As we celebrate our 15th anniversary this year, we look back on the success we have achieved, we reflect on where we could have done better, and set our sights on the next milestones” – says OneRoyal founder and Chairman Rayan Al Annan.

All new members of the team will be based in Cyprus, as OneRoyal is upgrading its Limassol office to transform it to the global headquarters of the retail arm of the business. The institutional arm of the firm will remain headquartered in Sydney, Australia, where the broker holds an ASIC licence.

__________

About OneRoyal

Founded in 2006, OneRoyal is a multi-licence broker offering a wide range of CFD products for retail and institutional traders. The company holds CySec, ASIC, VFSC and FSA licenses and is headquartered in Limassol, Cyprus (retail arm) and Sydney, Australia (institutional arm). With the vision to lead the way in safe and innovative brokerage, OneRoyal builds on its core values of stability and trust. Visit oneroyal.com for more information.

 

OneRoyal Chairman Rayan Al-Annan on Making 2022 a Royal Year

Not all success stories are loud, and OneRoyal is a prime example of that. Founded in the US in 2006, the broker saw global expansion and opening offices from Europe to Australia. In 15 years of successful operation, the company did not actively pursue PR and media exposure, opting to focus on providing its clients with premium trading experience instead. Now, the broker is stepping up its visibility. Today, we sat down with OneRoyal founder and Chairman Rayan El Annan to look at the company today, and the vision for success in 2022 and beyond.

From Florida to Australia, Cyprus, Lebanon – how did you end up with such geography?

I launched the company in 2006 in Florida. Regulated by the USA financial authorities (CFTC) and a member of the NFA at the time, it did exceptionally well. In mid-2008, we made a strategic decision to move the “ROYAL-RFXT.COM” brand to the Middle East (while maintaining the Global Support Office in the US). Driven by organic growth of the company and the ambition to expand globally, we acquired our CySec, ASIC, VFSC and FSA licenses. With our Market Research and Training arm based in Cairo, Egypt, we are exceptionally well positioned to service traders worldwide.

What have been the highlights of the year 2021 for OneRoyal?

This year, we uplifted the brand from Royal to OneRoyal, to emphasize that we are THE ONE broker that our clients need. Our ambition is to be “the last broker our clients will ever register with” – simply because the trading experience and the products we provide meet and exceed their expectations. To reflect this ambition, we have updated our logo and are now gearing up towards the launch of the new website and the client areas, with a shortened and streamlined onboarding process.

When it comes to the product offering, we introduced 15 ETFs in May. We also expanded our deposit methods by adding crypto (USDT, BTC, ETH and XRP) to meet the demand of crypto-focused traders. Later in the year, we went further on crypto by adding Dash and Bitcoin Cash to our CFD offering. And recently, we have introduced Bitcoin as an account base currency on the MT4 platform.

What are OneRoyal’s plans for 2022?

2022 feels very special as this is our anniversary year, and we start it by reflecting on our 15 Years of Excellence as we keep going forward with new projects and goals that will propel us to further growth. Our website and refreshed client areas are in the making. We are updating our onboarding flow, so clients could start trading in 60 seconds, while also stepping up our offering for institutional clients. In the coming weeks, we will be moving to the new premises in Limassol, which will be our global hub, and gaining a more prominent exposure on the scene, as well as in the media and industry events.

Does the new HQ mean more hiring in Cyprus?

Yes, we have been actively hiring lately, mostly with the purpose to upgrade our top management team and set the company up for strategic growth. We have hired key players to our C-suite and I personally have faith in our renewed vision and the team’s capabilities of executing it.

What is this renewed vision exactly?

Internally, we have formulated our vision as redefining the relationship between brokers and traders towards stability and trust, while building an environment where it becomes a norm for brokers to give back to their community through supporting education and growth, creating a better future for the next generations. Our future decisions regarding potential partnerships, sponsorships and CSR initiatives will be made to foster this vision.

It makes sense that OneRoyal puts emphasis on stability and trust between brokers and traders. In over 15 years in the market, the company did not have any regulatory controversies and accusations – which is uncommon in the industry known for its bad reputation. What is the secret of that?

I don’t believe there’s any secret. I founded OneRoyal when I was 25, and I have always been determined to build a company that lasts over 100 years. Hence, regulatory compliance has always been among our core values, and we take it very seriously. That said, I do not believe that OneRoyal is unique in that, and being compliant is not a special secret. In fact, there are a lot of honest and reliable players in the industry. It’s unfortunate that there are some “bad apples”, be it companies or individuals, who mislead clients, thus contributing to the industry’s bad reputation. On a personal note, it is vital for me that we do things right, and I will always sacrifice short-term gains, no matter how big, for the long-term stability and future of OneRoyal.

Equity Bulls Jittery, Dollar Sinks as Investors Digest Inflation Data

The U.S. consumer price index (CPI) jumped 7% year-on-year, matching the median forecast from economists surveyed by Bloomberg and up from 6.8% in November. Core inflation, which strips out volatile items like food and energy, rose 5.5%, well above the 4.9% reported in the previous month.

Markets initially offered a calm reaction to the hot report with Wall Street closing modestly higher on Wednesday. The most notable price action was seen in FX markets, with king dollar breaking down as Treasury yields pulled back, while gold bugs were injected with renewed confidence. The December CPI report has presented further evidence of persistent price pressures, especially with inflation registering its biggest annual gain since 1982.

As expectations intensify over the Fed raising interest rates as soon as March, this may weigh more heavily on global stocks. while supporting the dollar and Treasury yields in the medium term. Given how markets remain sensitive to comments from Fed officials, today could see more volatility with numerous Fed speakers on the roster.

Dollar Index (DXY) slams into 95.00

The dollar tumbled to a two-month low against a basket of currencies yesterday after the inflation figures for December matched expectations. Investors may have seen this data as bearish for the world’s reserve currency as they were possibly expecting the figures to be even hotter. Nevertheless, the headline surged 7% last month, its biggest year-on-year increase since June 1982 and seven of the last nine releases have now come in above consensus. Traders are currently pricing in an 84% probability of at least one rate hike by mid-March 2022.

Looking at the technical picture, the Dollar Index remains under pressure on the daily charts. A breakdown below 95.00 could open the doors towards 94.56 and 94.00, respectively.

Commodity spotlight – Gold

After notching its sharpest weekly loss since November, gold bulls have returned with a vengeance this week.

The precious metal continues to draw strength from a weaker dollar and slight pullback in Treasury yields with prices trading around $1826 as of writing. Inflation risks could also be supporting upside gains for gold which has often been considered a hedge against rising prices. With inflation in the United States jumping in December, this could encourage some investors to hold onto their gold investments.

However, the precious metal is certainly not out of the woods yet. The zero-yielding asset tends to perform poorly in a high interest rate environment. So, with the Fed expected to hike as soon as March, the road ahead for gold bugs could be filled with bumps and obstacles. On top of this, the dollar may regain its mojo on rate hike bets with Treasury yields pushing higher. Should this become a reality, gold could be in store for fresh pain down the road.

Technically, the precious metal has the potential to push higher towards $1845 if a daily close above $1831 is achieved. Alternatively, a decline back below $1810 could prices move lower towards $1800, $1786 and $1770.

For a look at all of today’s economic events, check out our economic calendar.

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

U.S. Inflation Hits Near 40 Year High…What Next?

The consumer prices index (CPI) jumped to 7% year-on-year, up from 6.8% in November while matching the median forecast from economists surveyed by Bloomberg. Core inflation, which strips out volatile items like food and energy rose 5.5%, well above the 4.9% reported in the previous month. This hot report should provide investors further evidence of persistent US inflation and reinforce speculation over the Federal Reserve raising interest rates sooner than expected.

However, the market reaction was interesting as traders shrugged off the data. US equities rose, the dollar tumbled against most currencies and Treasury yields pulled back slightly despite US inflation rising at its fastest pace since June 1982. While the positive reaction to the report could be based around the figures matching estimates, they will still fuel expectations over the Fed taking action in the face of rising inflation.

The mighty dollar was not so mighty on Wednesday afternoon with the Dollar Index (DXY) sinking towards the 95.00 level. A solid breakdown below this support may trigger a decline towards 94.56.

US Dollar Index daily chart

A weaker dollar propelled the EURUSD above the 1.1370 resistance level. This breakout could signal a move higher towards 1.1460 and 1.1530.

EUR/USD daily chart

Looking at the USDJPY, prices tumbled lower with bears eyeing 114.50.

USD/JPY daily chart

Earlier in the week, we asked whether gold was in trouble…well the precious metal looks to be in a good place with bulls hungry for $1831. If the dollar remains shaky for the rest of the week and Treasury yields continue to retreat, this could provide the precious metal a tailwind to push beyond $1831.

Gold daily chart

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Dollar Softens Ahead Of CPI Data

USD 11 January

Dollar bulls were missing in action, even after Federal Reserve Chairman Jerome Powell stated during his Senate confirming hearing that the central bank was likely to raise interest rates this year. Given all the hype and mounting anticipation around the U.S. inflation data on Wednesday afternoon, the next few hours could become tense and nervy. We could experience a calm before the raging storm with dollar volatility certainly on the cards. In the meantime, this will be another evening where I wear my technical analysis hat, searching for potential trading setups on dollar crosses before the big event tomorrow!

Dollar Index (DXY) approaches support

The DXY is inching closer to the 95.50 support level on the daily charts. A strong daily close below this level may open the doors towards 95.00 and 94.56. Should 95.50 prove to be reliable support, a rebound back towards 96.40 and 96.60 could become reality.

US Dollar Index daily chart

EURUSD same old story…

It pretty much felt like watching paint dry when looking at the EURUSD’s recent price action.

The currency pair remains trapped within a range with support at 1.1200 and resistance at 1.1370. A breakout could be on the horizon with a fresh fundamental catalyst getting the gears moving. Should bulls break above 1.1370, prices could test 1.1460 and 1.1530, respectively. A decline back below 1.1280 could signal a selloff towards 1.1200.

EUR/USD daily chart

GBPUSD pushes higher

The GBPUSD has hit its highest level since November 4th.

Pound bulls remain supported by expectations over the Bank of England raising interest rates as early as next month. Talking technical, the upside momentum may push prices towards 1.3670 and 1.3750. Should 1.3570 prove to be unreliable support, prices may decline back towards 1.3500 and 1.3410.

GBP/USD daily chart

AUDUSD set to head north?

After creating a new higher low at 0.7129, bulls seem to be back in action.

However, the road ahead could be rocky and filled with a couple of obstacles. The MACD remains flat while resistance can be found at 0.7280 which is just above the 100-day Simple Moving Average. If bulls tire before reaching this point, prices may decline back towards 0.7180 and 0.7129.

AUD/USD daily chart

USDJPY lingers below 115.50

It will be interesting to see whether the USDJPY can push back above 115.50 or use this level as resistance to trade lower.

Sustained weakness below 115.50 could trigger a selloff towards 114.50, 114.00, and 113.360, respectively. Should bulls break above 115.50, this could suggest the resumption of the uptrend. Such an outcome may open doors towards 116.00, 116.30, and 117.40.

USD/JPY daily chart

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

OctaFX Copytrading Redesigns Its Copying Settings 

The new year means new beginnings. Global broker OctaFX decided to jumpstart 2022 by updating some crucial settings of its copy trading service.

OctaFX Copytrading is a top-rated service among the company’s clients. There are two great reasons for its popularity. First, you can easily access the service through the OctaFX Copytrading App or desktop. Second, you need little Forex expertise to start making a profit.

Wondering how it works? The clients, known as copiers, choose professional traders to copy orders from them. Whenever a Master Trader opens an order, the same order opens in a copier’s account automatically. This way, a copier can simply trust a Master Trader’s expertise and profit with minimum effort.

Recently OctaFX Copytrading has been working on making the subscription process to Master Traders more transparent for the copiers. They updated the parameters a copier can set when subscribing to a professional trader.

Firstly, a copier can choose to copy a Master Trader’s orders in equal (×1), double (×2), triple (×3), or any other volume. Upon selecting a copying mode, a copier will see the investment required to start copying this Master Trader in this mode.

Another new feature for the Copiers is the support funds. Copiers can choose to add support funds to protect their investments from unexpected market movements. This amount will only be used to support the trading strategy when the market fluctuates.

The required investment for each Master Trader is calculated automatically. An algorithm calculates this optimal amount from a pro’s trading history. This way, copiers can choose Master Traders based on how much they are ready to invest. It comes down to the most significant of the service’s recent improvements.

Traders utilise various trading strategies that involve different investment minimums for the Copiers. In the Master Rating, Copiers can filter Master Traders by the minimum amount required to invest with them. The system suggests Master Traders with strategies matching Copiers’ financial opportunities.

In 2021, the TradeForexSA magazine, a prominent South African guide to Forex trading, named OctaFX the Best Forex Copy Trading Platform. As it can be seen from the company’s performance, this and other awards only inspired its’ developers to work harder and deliver the best trading experience for their customers. We will probably hear of more improvements soon.

About OctaFX

OctaFX is a global broker providing online trading services worldwide since 2011. It offers a state-of-the-art trading experience to over 7 million users globally. OctaFX has won more than 40 awards since its foundation, including the ‘Best Forex Broker Asia’ from the Global Banking and Finance Review and the ‘Best Trading Platform’ from Fx Daily Info in 2021. The company is well-known for its social and charity activities.

Tech Tanks as Investors Rue the End of the Liquidity Punchbowl

Written on 11/01/2022 by Lukman Otunuga, Senior Research Analyst at FXTM

The tech-focused Nasdaq Composite has shed close to 7% already this year, the worst annual debut since fears of a slowdown in China sent shockwaves across global financial markets six year ago.

It is the sharp rise in bond yields that has grabbed every investor’s attention and a potentially more hawkish US Federal Reserve who the market now thinks will raise rates at its March meeting and three more times across the new year in order to tame hot inflation. In turn, sector rotation out of tech stocks and into value sectors has been the name of the game, though a more severe selloff across all sectors can’t be ruled as the liquidity taps run dry. It seems that the fabled punchbowl of endless central bank stimulus really is going to be taken away, and much sooner than many have previously thought.

The prospect of higher rates lowers the appeal of the tech sector as high growth stocks are particularly sensitive to policy tightening that crimps future earnings potential, in turn knocking the sector’s high valuations. Big cash flows far into the future are worth relatively less when rates rise, so growth stocks and especially more speculative areas of the market which carry high expectations for distant cash flows, get hit harder.

The S&P500 Information Technology index, made up of the some of the biggest names in Silicon Valley, has fallen nearly 7% already this year, while recent initial public offerings are down nearly 12%, according to indices collated by top investment bank, Goldman Sachs. The flagship “Ark” fund run by once market darling Cathie Wood has been caught in the epicentre of the tech selling. It has dropped around half its value, a fall worse than the one the fund saw in March 2020 during the low of the pandemic.

As yields have risen, those previously unloved value stocks more linked to the reopening phase have been bought into, as investors shunned high-growth companies that were all the rage at the height of the crisis. Shares of banks, energy stocks and major industrial groups – those set to benefit with the opening up of the US economy – have taken off. The S&P bank index hit a record high yesterday and value stocks as a whole even managed to eke out a gain last week while the broader all closed in the red for the year.

The bumpy ride may continue as focus is fully on the Fed, with its recent hawkish minutes pushing markets into pricing a material chance of a rate hike this month. Perhaps Fed Chair Powell’s Senate testimony, as part of his re-nomination process, could douse the hawkish atmosphere and heal some of the carnage in the more speculative parts of the market if he said that policy adjustment might be more gradual. Then again, Wednesday’s US CPI is expected to hit near 40-year highs and potentially add to expectations of an imminent Fed lift-off.

For more information, please visit: FXTM

Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Key Events This Week: Inflation Data Ahead

Here are the scheduled economic data releases and events that could trigger even more volatility in the coming days:

Monday, January 10

  • EUR: Eurozone November unemployment rate
  • USD: Atlanta Fed President Raphael Bostic speech

Tuesday, January 11

  • AUD: Australia November external trade and retail sales
  • USD: Fed Speak – Kansas City Fed President Esther George, St. Louis Fed President James Bullard

Wednesday, January 12

  • CNH: China December CPI and PPI
  • JPY: BOJ Governor Haruhiko Kuroda speech
  • EUR: Eurozone November industrial production
  • USD: US December CPI and Fed Beige Book

Thursday, January 13

  • USD: US initial weekly jobless claims and December PPI
  • USD: Fed Speak – Richmond Fed President Thomas Barking, Philadelphia Fed President Patrick Harker, Chicago Fed President Charles Evans

Friday, January 14

  • CNH: China December external trade
  • GBP: UK November industrial production and trade balance
  • USD: US December retail sales, industrial production, and January consumer sentiment
  • USD: New York Fed President John Williams speech

US CPI the must-watch data

Hot inflation will no doubt grab the headlines this week with the release of the latest US CPI figures for December on Wednesday. Numerous analysts expect a headline print above 7% with the usual suspects continuing to drive prices higher ie. shelter costs, wage inflation and vehicle prices.

With the labour market pretty much inline with the Fed’s maximum-employment goal, any surprises in the data could reinforce or reverse some of the year’s market momentum, depending on their direction. Also out of the US, the University of Michigan Sentiment survey and retail sales might attract some attention. The consumer inflation expectations part in the former will be key for economists, with all the market’s current attention on price pressures.

Pace of rising rates hits markets

A first rate hike by the Fed in March is now priced in at around 90% with a total of four 25bps moves for the whole of the year. It is not so much the level of where bond yields are, but the speed at which they are rising that has shocked some areas of the market. Equities, and tech stocks in particular, have taken a hit as investors rotate out of growth companies and into value stocks like financials, which generate cash flows now rather than yet-to-be proven cash flows.

This environment should be supportive for the dollar given that the Fed is now fully behind the more hawkish narrative and in lift-off mode. Rising real rates and the risk-off environment have so far cancelled each other out in EUR/USD this year.

EUR/USD Daily

Commodity and high yield FX should also be bid, but this might be easily undone if stock markets start to selloff more sharply than just a wobble.

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.