Category: primary dealers

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Could it be more about where the banks want to go versus where traders think the Fed wants to go?

Over the weekend, I spoke to my contacts in the banking industry trying to get a feel for banker sentiments on the Fed’s interest rate policy. The sentiments boiled down to the banks taking whatever the Fed decides in stride. As one contact put it, it’s about the money and the banks will take what … Continue reading Could it be more about where the banks want to go versus where traders think the Fed wants to go?

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Binary options: Mitigating risks from information barriers in the foreign exchange markets.

When trading binary options, I am trading my expectations on certain events. I am entering contracts where one side of the contract has an expectation of some event, x, occurring and the other side of the contract has an expectation of some event, y, occurring. I am not trading a commodity, share, or currency. I … Continue reading Binary options: Mitigating risks from information barriers in the foreign exchange markets.

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EUR/USD, the euro: Europe’s yearning for world war days does not impress me.

Should I bet against the euro? At 1.0959 and not too cheery attitude out of the Eastern Central Bank, maybe I should find a contract and take the sell side. Reuters cited ECB policymaker Isabel Schnabel’s belief that Europe is facing structural headwinds exacerbated by a surge in uncertainty that could get worse with U.S. … Continue reading EUR/USD, the euro: Europe’s yearning for world war days does not impress me.

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The chances of a 50-basis point hike in fed funds rate higher than reported.

The CME FedWatch tool is reporting a 59% chance that the Federal Open Market Committee will reduce the federal funds target range to 4.75%-5.00% from the current 5.25%-5.50% range. Business media has been reporting sentiment leaning toward a 25-basis point cut versus the sentiment reported in CME data. For traders, this should signal a bump … Continue reading The chances of a 50-basis point hike in fed funds rate higher than reported.

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I heard you should trade like a central bank. Let’s see what the Federal Reserve trading desks are waking up to on 5 September 2023.

The old adage is that 99% of retail traders fail. I believe that we are failing because we are not good at obtaining and trading the most valuable commodity: information and knowledge. That failure is compounded when we push up against the hourglass of time. Continue reading I heard you should trade like a central bank. Let’s see what the Federal Reserve trading desks are waking up to on 5 September 2023.

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What interest rates are staring back at the Federal Reserve. 12:26 am EST 30 August 2023.

Fed Funds Futures. 30-Day Federal Funds Futures rate=94.56 Source: CME Group. Federal Reserve Reference Rates. Discount window rate=5.50% Interest on reserve balances=5.40% Effective federal funds rate=5.33% Overnight reverse repo rate=5.30% Source: Board of Governors of the Federal Reserve System. Federal Reserve Bank of New York. Treasurys. 30-year rate=4.29% 10-year rate=4.20% Source: Board of Governors of the Federal Reserve System. … Continue reading What interest rates are staring back at the Federal Reserve. 12:26 am EST 30 August 2023.