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MongiIG

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  1. MongiIG
    INTRODUCTION TO MOVING AVERAGES:

    Moving Average – Talking Points:
    What is a moving average? How do you calculate moving average? What is the purpose of moving averages? How do you interpret moving averages? WHAT IS A MOVING AVERAGE?
    In technical analysis, the moving average is an indicator used to represent the average closing price of the market over a specified period of time. Traders often make use of moving averages as it can be a good indication of current market momentum.
    The two most commonly used moving averages are the simple moving average (SMA) and the exponential moving average (EMA). The difference between these moving averages is that the simple moving average does not give any weighting to the averages in the data set whereas the exponential moving average will give more weighting to current prices.

    HOW DO YOU CALCULATE MOVING AVERAGE?
    As explained above, the most common moving averages are the simple moving average (SMA) and the exponential moving average (EMA). Almost all charting packages will have a moving average as a technical indicator.
    The simple moving average is simply the average of all the data points in the series divided by the number of points.
    The challenge of the SMA is that all the data points will have equal weighting which may distort the true reflection of the current market’s trend.
    The EMA was developed to correct this problem as it will give more weighting to the most recent prices. This makes the EMA more sensitive to the current trends in the market and is useful when determining trend direction.
    The mathematic formula for each can be found below:
    Simple Moving Average:
    SMA =

    Where:
    A= Is each of the data points
    n = Number of time periods
    For example, looking at a 5-day SMA on a daily chart of EUR/USD and the closing prices over the 5 days are as follows:
    Day 1: 1.321
    Day 2: 1.301
    Day 3: 1.325
    Day 4: 1.327
    Day 5: 1.326
    SMA = (1.321 + 1.301 + 1.325 + 1.327 + 1.326)/5
    SMA = 6.6/5
    SMA = 1.32
    Exponential Moving Average:
    EMA =

    Where:
    EMAt= EMA today
    Vt= Value today
    EMAt = EMA today
    s =smoothing
    d = number of days
    Steps for calculating EMA:
    1. Calculate the SMA for the particular time period
    2. Calculate the multiplier for weighting the EMA using the formula:
    [2 ÷ (selected time period + 1)]. So, for a 10-day moving average, the multiplier would be [2/(10+1)]= 0.01818.
    3. Use the smoothing factor combined with the previous EMA to arrive at the current value.
    For example, looking at a 10-day EMA for a share, the table below displays how the EMA would be calculated:
      DATE
    PRICE
    10-DAY SMA
    SMOOTHING CONSTANT 2/(10 + 1)
    10-DAY EMA
    1
    24-Apr-18
    23.24
          2
    25-Apr-18
    22.99
          3
    26-Apr-18
    22.85
          4
    27-Apr-18
    23.00
          5
    28-Apr-18
    22.96
          6
    29-Apr-18
    22.21
          7
    30-Apr-18
    21.99
          8
    1-May-18
    22.43
          9
    2-May-18
    22.24
          10
    3-May-18
    22.55
    22.65
      22.65
    11
    4-May-18
    22.15
    22.54
    0.1818
    22.56
    12
    5-May-18
    22.39
    22.48
    0.1818
    22.53
    13
    6-May-18
    22.38
    22.43
    0.1818
    22.50
    14
    7-May-18
    22.61
    22.39
    0.1818
    22.52
    15
    8-May-18
    23.36
    22.43
    0.1818
    22.67
    16
    9-May-18
    24.05
    22.62
    0.1818
    22.92
    17
    10-May-18
    23.75
    22.79
    0.1818
    23.07
    18
    11-May-18
    23.83
    22.93
    0.1818
    23.21
    19
    12-May-18
    23.95
    23.10
    0.1818
    23.35
    20
    13-May-18
    23.63
    23.21
    0.1818
    23.40
     
    WHAT IS THE PURPOSE OF MOVING AVERAGES?
    The main purpose of the moving average is to eliminate short-term fluctuations in the market. Because moving averages represent an average closing price over a selected period of time, the moving average allows traders to identify the overall trend of the market in a simple way.
    Another benefit of the moving average is that it is a customizable indicator which means that the trader can select the time-frame that suits their trading objectives. Moving Averages are often used for market entries as well as determining possible support and resistance levels. The moving average often acts as a resistance level when the price is trading below the MA and it acts as a support level when the price is trading above the MA.
    HOW DO YOU INTERPRET MOVING AVERAGES?
    There are 3 ways in which trader’s use the moving average:
    To determine the direction of the trend To determine support and resistance levels Using multiple moving averages for long- and short-term market trends 1. To determine the direction of the trend:
    When prices are trending higher, the moving average will adjust by also moving higher to reflect the increasing prices. This could be interpreted as a bullish signal, where traders may prefer buying opportunities.
    The opposite would be true if the price was consistently trading below the moving average indicator, where traders would then prefer selling opportunities due to the market signaling a downward trend.
    2. The moving average for support and resistance levels:
    The moving average can be used to determine support and resistance levels once a trader has placed a trade.
    If the trader sees the moving average trending higher, they may enter the market on a retest of the moving average. Likewise, if the trader is already long in an uptrend market, then the moving average can be used as a stop loss level. The opposite is true for down trends.
    The charts below are examples of how the moving average can be used as a both a support and a resistance level.

    3.Making use of multiple moving averages
    It is common for traders to make use of multiple moving average indicators on a single chart, as depicted in the chart below. This allows traders to simultaneously assess the short and long-term trends in the market. As price crosses above or below these plotted levels on the graph it can be interpreted as either strength or weakness for a specific currency pair. This method of using more than one indicator can be extremely useful in trending markets and is similar to using the MACD oscillator.
    When making use of multiple moving averages, many traders will look to see when the lines will cross. This phenomenon is referred to as ‘The Golden Cross’ when a bullish pattern is formed and ‘The Death Cross’ when the pattern is bearish.
    A Golden cross is identified when the short-term moving average (such as the 50-day moving average) crosses above the long-term moving average (such as the 200-day moving average), while the Death cross represents the short-term moving average crossing below the long-term moving average. Traders that are long, should view a Death Cross as a time to consider closing the trade while those in short trades should view the Golden Cross as a signal to close out the trade.

    MOVING AVERAGE INDICATOR: A SUMMARY
    In summary, the Moving Average is a common indicator used by traders to determine trends in the market. Many traders use more than one Moving Average at a time as this gives a more holistic view of the market. Moving averages are often used to determine market entries as well as support and resistance levels.
    BECOME A BETTER TRADER WITH OUR TRADING TIPS
    Learn more about the moving average and other technical indicators Learn more about how to be a successful trader with the Traits of a successful trader training guide Get tips on how to create trading plan  
    Article by Tammy Da Costa, Markets Writer, 12th July 2021. DailyFX
  2. MongiIG
    Hard lockdown extension and political unrest weigh on the rand
    Source: Bloomberg   Hard lockdown extension and political unrest weigh on the rand.
    The rand has found itself under renewed duress, this time predominantly from factors domestic rather than those external.
    While an extended hard lockdown in South Africa will have provided some domestic excuse for ZAR weakness, looting and violence in Kwazulu-Natal (KZN) and Johannesburg have further decreased short term appetite for the currency, which reflects Africa’s most advanced economy.
    Violence and destruction of property in KZN, and to a lessor extent in Johannesburg, appears to have stemmed from political activism from those protesting the recent incarceration (for contempt of court) of former South African president Jacob Zuma. The rioting has caused many factories and businesses in KZN to shut down temporarily, as fear and the unavailability of public transport disrupt economic activity in lieu of safety.
    The South African National Defense Force (SANDF) has now released a public statement in which it has guided that the process of deploying military to assist law enforcement in regions affected has begun.
    Political unrest and violence is expected to continue to weigh on the rand until such time as government and its authorities can gain some control over the matter. The need to deploy military assistance to the matter highlights the severity thereof.
    Dollar strength another risk to the ZAR
    The new week sees two key catalysts which could affect the dollar and in turn its crossing with the ZAR. External themes such as the path of monetary policy in the US remain prevalent in the longer term outlook for movements against the ZAR. The US will release inflation data on Tuesday a key metric for Federal Reserve policy and the timing of rates and stimulus unwinding. The inflation data is followed by commentary on Wednesday from Federal Reserve Chairperson Jerome Powell.
    The USD/ZAR – Technical Analysis
    Source: IG Charts The USD/ZAR has now started to move aggressively towards our previously guided target of R14.55/$. The move higher starts to further validate our assumptions that this could be the start of a longer term trend reversal (from down to up).
    A break of the R14.55/$ level sees R14.70/$ and R15.10/$ as further upside resistance targets from the move. Traders who are long might consider using a close below R14.13/$ as a stop loss indication.
    In Summary
    - Violence and looting in KZN and Johannesburg couples with an extended lockdown to see rand underperforming emerging market peers
    - Business activity in KZN has been severely disrupted as public transport grinds to a halt and factories and businesses address safety concerns
    - The SANDF is in the process of deploying military to support law enforcement agencies
    - The civil unrest could continue to weigh on the rand until such time as the Government can regain control of the situation
    - US inflation data on Tuesday and commentary from Fed Chair on Wednesday is likely to affect short term ZAR movements
    - Short term trend for USD/ZAR is up with R14.55/$ and R14.70/$ initial resistance targets
     
    Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Monday 12 July 2021 17:29. IG news
  3. MongiIG
    Earnings season provides a great opportunity for equity traders to gain insight on stocks they have invested in, while also offering context to potential share price moves. Read on for more on what earnings season is, earning announcement dates to know, and what to look for in an earnings report.
    WHAT IS EARNINGS SEASON & WHY IS IT IMPORTANT?
    Earnings season is a period each fiscal quarter, usually lasting several weeks, where many of the largest listed companies announce their latest financial accounts. An earnings report consists of revenue, net income, earnings per share (EPS) and forward outlook, amongst a bevy of other data points, which can help to provide investors with insight relating to the current health and outlook for the company. This information can be found on sec.gov, various financial publications, and individual companies' websites.
    Earnings season is important because it helps market participants glean information from the companies that they are monitoring along with the broader index. For example, a strong Apple (AAPL) earnings report may see investors bullish on Nasdaq 100 futures, a concept discussed further below when looking at bellwether stocks.
    Something else that can accompany an earnings release is an earnings call. This is a conference between the company and analysts, press and investors which discusses the outcome of an earnings report and, in many cases, opens the floor for questions to company management. Such scrutiny of the reports can enable traders to access more information to further inform their decisions, although not all companies hold earnings calls.
    WHEN IS EARNINGS SEASON & WHEN DO REPORTS COME OUT?
    Earnings season takes place typically a few weeks after each quarter ends (December, March, June, September). In other words, earnings seasons begins around January-February (Q4 results), April-May (Q1 results), July-August (Q2 results) and October-November (Q3 results), with the unofficial start of earnings season usually marked by when the major US banks report results.
    This typically coincides with an increase in the number of earnings being released, while the unofficial end of earnings season is usually around the time that Walmart (WMT) announces its earnings report.
                                                             
     
     
    3 THINGS TO LOOK FOR IN COMPANY EARNINGS REPORTS
    There are a number of factors to look for in company earnings reports. Traders should be most mindful of the performance of the largest ‘bellwether’ stocks, understand the significance of an earnings recession in a given stock, and grasp how a stock’s earnings announcement might impact a relevant index, depending on the weighting of the given security.
    1) Performance of bellwether stocks
    When analyzing company earnings, it is important to look out for ‘bellwether’ stocks which can be seen as a gauge for the performance of the macro-economy. While the status of a bellwether stock can change over time, the largest and most-established companies are typically considered a bellwether stock.
    Examples of Bellwether stocks are:
    FedEx (FDX): Ships goods for consumers and businesses across the globe Caterpillar (CAT): World’s largest heavy-duty machinery maker has been viewed as a bellwether given its large exposure to construction, manufacturing and agricultural industries, particularly in China 3M (MMM): Gauge for the health of the manufacturing sector Apple (AAPL): Among the world’s largest companies. Important for key suppliers, in particular, chipmakers. 2) Earnings recession
    An earnings recession is characterized as two consecutive quarters of year-on-year declines in company profits. However, while earnings are an important factor in stock market returns over the long term, an earnings recession does not necessarily coincide with an economic recession.
    The chart below shows that in the past six earnings recessions witnessed in the US, only two had coincided with an economic recession. The blue circles show where there was an earnings recession without an economic recession, while the red circles represent where both an earnings and economic recession occurred.

    3) Earnings and stock index weighting
    Traders should understand that when trading earnings, certain stocks will have a greater impact on the wider index according to their index weighting. For example, when trading the Dow Jones, Boeing releasing its earnings will be highly influential on the index, while Visa likely won’t be as influential, due to the former’s 9.49% weighting compared to the latter’s 4.41%, as shown in the table below. This highlights the importance of paying close attention to bellwether stocks and how they may impact a broader equity index.

    TRADING DURING EARNINGS SEASON: TOP TIPS
    We have an in-depth guide on how to trade earnings season, but the important things to remember are:
    1) Know the ‘expected’ results
    Being cognizant of what is ‘expected’ with regards to the revenue/sales and earnings per share (EPS) figures are important because a company’s share price reaction can often be determined by the amount by which they beat/miss an aggregate of analysts’ expectations.
    2) Stay alert to surprise announcements
    Any surprise announcements that coincide with an earnings report can also impact the share price of a company. These may include stock buybacks/share repurchase programs as well as company guidance.
    3) Be aware of spillover effects between stocks
    An example of spillover impact could be if an investor has a chipmaker stock within their portfolio (EG Dialog Semiconductor), earnings from Apple could have a sizeable impact on the stock. Consequently, it is important to assess related stocks, given that they may reveal the outlook for a sector, thus sparking a possible sector rotation.
    4) Consider volatility over the bearing of an expected move
    Working out the ‘expected move’ on a directional basis for a stock in reaction to the binary earnings event can be a fraught endeavor. Alternatively, a view taken with volatility in mind instead can prepare investors for significant movement without positioning on the wrong side of the eventual outcome.
     
     
    EARNINGS SEASON: KEY TAKEAWAYS FOR INVESTORS AND STOCK TRADERS
    In summary, earnings season can be an influential driver in a trader’s experience. Make sure you keep up to date on the when the key earnings are released for individual companies in order to proactively plan. Be aware of how bellwether stocks, potential earnings recessions and stock index weightings can influence price movements. Keep a handle on what results are expected for each stock, be mindful of greater potential volatility for either analytical or strategic purposes and understand how one stock’s performance can impact another’s (or an index as a whole).
    Following these key tips can help the trader to attempt to weather earnings season and navigate the period more consistently.
    EARNINGS SEASON FAQS
    What does earnings season tell us about the global economy?
    Earnings season’s impact on the global economy is dependent on a range of factors, from the performance of given sectors to a variety of fundamental factors. While bellwether companies meeting or exceeding expectations can reflect a strong corporate environment, the stock market interacts with the economy in many different ways – so there isn’t always a predictable relationship between the two.
    How is earnings season impacted by financial downturns?
    Financial downturns may impact earnings season in a significant way – dampened demand for products and services caused by a downturn or more prolonged recession can naturally mean earnings failing to hit expectations in multiple sectors. However, perceived defensive stocks such as those in consumer staples or healthcare may weather downturns better or perhaps even become more attractive in such a backdrop.
    Is earnings season the same dates in the US and UK?
    When it comes to the US/UK earning season dates, UK and European companies tend to get the bulk of their earnings about two to three weeks after the US.
    MORE ON EQUITIES
    Want to build your equities knowledge further? Make sure to check out our stock market articles, with useful, straightforward insight on analyzing the most common capital market assets. Here are a few articles to get you started.
    Beginner’s Guide to Stock Trading Types of Stocks How to Invest in Dividend Stocks  
    Article by Ben Lobel and Peter Hanks, Strategist. DailyFX
    12th July, 2021.
  4. MongiIG

    The Week Ahead

    By MongiIG,


    Market News
    Read about upcoming market-moving events and plan your trading week
    Week commencing 12 July
    Chris Beauchamp’s insight
    US earnings season begins this week, with banks at the top of the list, providing an insight into their own performance in Q2 but also into the US economy’s ongoing recovery. Meanwhile, Chinese GDP, US CPI and UK CPI are key economic events, along with decisions from the Bank of Canada and the Bank of Japan.
    The week ahead video
    Economic reports
    Monday Tuesday Wednesday Thursday Friday Weekly view None  
     
      Company announcements
     
    Monday
    12 July
    Tuesday
    13 July
    Wednesday
    14 July
    Thursday
    15 July
    Friday
    16 July
    Full-year earnings           Half/ Quarterly earnings   Goldman Sachs,
    JPMorgan,
    PepsiCo Bank of America,
    Wells Fargo,
    Citigroup,
    Delta Morgan Stanley,
    Alcoa,
    BNY Mellon   Trading update Dechra Pharmaceuticals Kier Big Yellow,
    Dunelm,
    PageGroup,
    Barratt Developments,
    Tullow Oil Hays,
    ASOS,
    Severn Trent,
    Experian,
    Galliford Try Burberry  
      Dividends
    FTSE 100: None
    FTSE 250: BMO Smaller Companies Trust, F&C Investment Trust
    Dividends are applied after the close of the previous day’s session for each market. So, for example, the FTSE 100 goes ex-dividend on a Thursday, but the adjustment is applied at the close of the previous day, e.g. Wednesday. The table below shows the days in which the adjustment is applied, not the ex-dividend days.
     

    Open an account no
  5. MongiIG

    The Basics of Technical Analysis

    By MongiIG,


    Analyst piece
    AN INTRODUCTION TO TECHNICAL ANALYSIS
    Technical analysis is becoming an increasingly popular approach to trading, thanks in part to the advancement in charting packages and trading platforms. However, for a novice trader, understanding technical analysis – and how it can help predict trends in the market - can be daunting and challenging.
    Technical analysis is the study of price movements in a market, whereby traders make use of historic chart patterns and indicators to predict future trends in the market. It is a visual representation of the past and present performance of a market and allows the trader to use this information in the form of price action, indicators and patterns to guide and inform future trends before entering a trade.
    This technical analysis beginners guide will introduce you to the basics of this trading approach, and how it can be used to trade the financial markets.

     
    UNDERSTANDING TECHNICAL ANALYSIS
    Technical analysis involves the interpretation of patterns from charts. Trader’s make use of historic data, based primarily on price and volume and use this information to identify trading opportunities based on common patterns in the market. Different indicators are applied to charts to determine entry and exit points for traders to maximize a trades potential at good risk-reward ratios.
    The below chart is an example of a chart with the use of the MACD and RSI indicator.

    While advocates of fundamental analysis believe that economic factors are the main contributors to movements in the markets, technical analysis traders maintain that past trends can assist in predicting future price movements. Although these trading styles can vary, understanding the differences between fundamental and technical analysis – and how to combine them - can be extremely beneficial.
    Learn more about combining fundamental and technical analysis
    HOW TECHNICAL ANALYSIS CAN HELP TRADERS
    Many traders have found technical analysis to be a useful tool for risk-management, which can be a key stumbling block. Once a trader understands the concepts and principles of technical analysis, it can be applied to any market, making it a flexible analytical tool. Where fundamental analysis looks to identify intrinsic value in a market, technical analysis looks to identify trends, which conveniently can be caused by the underlying fundamentals.
    Benefits of using technical analysis include the following:
    Can be applied to any market using any timeframe Technical analysis can be used as a standalone method Allows traders to identify trends in the market USING CHARTS IN TECHNICAL ANALYSIS
    The below chart is an example of a candlestick chart for the EUR/USD currency pair.

    Charts are key to technical analysis. This is because the most important measure of a market’s past and current performance is the price itself; this is the starting point when delving into analyzing the potential of a trade. Price action can be represented on a chart as this is the clearest indication of what the price is doing.
    Charts assist in determining the overall trend, whether there's an upward or downward trend, either over the long or short term or to identify range bound conditions. The most common types of technical analysis charts are line charts, bar charts and candlestick charts.
    When using a bar or candlestick chart each period will give the technical analyst information on the price from where it opened, the high or low of the period as well as the close. Candlestick analysis is especially useful as the patterns and relationship within them can assist in making forecasts about the future direction of the price.
    Once a trader has mastered the basics of charting, they can then make use of indicators to assist in determining the trend.
    TECHNICAL ANALYSIS INDICATORS
    Indicators are used by technical traders when looking for opportunities in the market. Although many indicators exist, traders often make use of volume and priced-based indicators. These assist in determining where the levels of support and resistance are, how often they are maintained or breached as well ascertaining the length of a trend.
    A trader can view the price or any other indicator using multiple time frame analysis, ranging from one second to a month which gives the trader a different perspective of the price action.
    The more popular indicators for technical analysis include:
    Moving Averages Relative strength index (RSI) Moving average convergence divergence (MACD) The EUR/USD chart below shows how to make use of different indicators.
    Moving averages and MACD are often used to identify trends in the market while the RSI is typically used to determine possible entry and exit points. Indicators assist traders in analyzing the market, validating trade set ups and determining entry points.

    LEARN MORE ABOUT TECHNICAL ANALYSIS
    Review the three most common types of technical analysis charts to compare techniques. Bookmark our technical analysis news feed to stay up to date with the latest insights on current market trends. Join our in-house experts as they explore the main issues affecting trades in the live daily webinars. Look at what makes a trader successful in the Traits of Successful Traders manual. Learn the basics of Forex technical analysis and the benefits of applying it in trading  
    By Tammy Da Costa, Market Writer. 9th July 2021. DailyFX
  6. MongiIG
    NEW YORK (Reuters) -Pfizer Inc plans to ask U.S. regulators to authorize a booster dose of its COVID-19 vaccine within the next month, the drugmaker's top scientist said on Thursday, based on evidence of greater risk of reinfection six months after inoculation and the spread of the highly contagious Delta variant.
     

     
    The U.S. Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) said, however, in a joint statement that Americans who have been fully vaccinated do not need a booster COVID-19 shot at this time.
    Some scientists have also questioned the need for booster shots. Pfizer (NYSE:PFE)'s chief scientific officer, Mikael Dolsten, said the recently reported dip in the vaccine's effectiveness in Israel was mostly due to infections in people who had been vaccinated in January or February. The country's health ministry said vaccine effectiveness in preventing both infection and symptomatic disease fell to 64% in June.
    "The Pfizer vaccine is highly active against the Delta variant," Dolsten said in an interview. But after six months, he said, "there likely is the risk of reinfection as antibodies, as predicted, wane."
    Pfizer did not release the full set of Israeli data on Thursday, but said it would be published soon.
    "It's a small data set, but I think the trend is accurate: Six months out, given that Delta is the most contagious variant we have seen, it can cause infections and mild disease," Dolsten said.
    The FDA and CDC, in their joint statement, said: "We are prepared for booster doses if and when the science demonstrates that they are needed."
    Pfizer's own data from the United States showed an erosion of the vaccine's efficacy to the mid-80s after six months, Dolsten said, against the variants circulating there in the spring.
    He stressed that data from Israel and Britain suggests that even with waning antibody levels, the vaccine remains around 95% effective against severe disease.
    The vaccine, developed with German partner BioNTech SE, showed 95% efficacy in preventing symptomatic COVID-19 in a clinical trial the companies ran last year.
    Dolsten said early data from the company's own studies shows that a third booster dose generates antibody levels that are five-to-10-fold higher than after the second dose, suggesting that a third dose will offer promising protection.
    He said multiple countries in Europe and elsewhere have already approached Pfizer to discuss booster doses, and some may begin administering them before a potential U.S. authorization.
    Dolsten said he believes booster shots are particularly important in older age groups.
    Dr. Eric Topol, a professor of molecular medicine and director of the Scripps Research Translational Institute in La Jolla, California, said basing the decision on waning antibody protection ignores the role of important other parts of the immune response, including memory B cells, which can make antibodies on demand when challenged by the virus.
    "You need better studies to be able to assert that. It isn't just neutralizing antibodies," Topol said.
    Pfizer has previously said people will likely need a booster dose, though some scientists have questioned when, or whether, boosters will be needed.
    Pfizer plans to launch soon a placebo-controlled efficacy trial of the booster with 10,000 participants. The study will run throughout the fall, Dolsten said, meaning it will not be completed ahead of the company's filing with the Food and Drug Administration.
    Dr. William Schaffner, a vaccine expert at Vanderbilt University Medical Center, said even if Pfizer succeeds in getting its booster authorized by the FDA, that would be only the first step. The booster would still need to be reviewed and recommended by advisers to the CDC.
    "It's not automatic by any means," he said. Schaffner said realistically, most of the public health bandwidth in the United States is still focused on encouraging Americans to get their first and second doses of the vaccine.
    Because boosters would drive increasing demand for vaccines while much of the world is still unvaccinated, Dolsten said Pfizer is looking at ways to boost production.
    It is already targeting production of 3 billion doses this year and 4 billion doses next year. Dolsten declined to give a forecast of exactly how many more doses the company could add, but said, "We can step up billion after billion in '22."
    Dolsten also said Pfizer and BioNTech are designing a new version of the vaccine targeting the Delta variant, but said the companies do not believe that the current version will need to be replaced in order to combat the variant.
    Pfizer expects the COVID-19 vaccine to be a major revenue contributor for years and has forecast sales of $26 billion from the shot in 2021. Global spending on COVID-19 vaccines and booster shots could total $157 billion through 2025, according to U.S. health data firm IQVIA Holdings.
     
    By Michael Erman and Julie Steenhuysen (Reuters), 9th July 2021. Investing.com
  7. MongiIG
    Investment funds: Julian Cane, manager of BMO Capital and Income Trust, speaks about opportunities presented for the fund in the context of inflation, easy monetary policy, recovery from the global pandemic and the need to continue paying dividends.
     
                                      
     
    Why we make Podcasts
    Podcasts are a great way to develop your trading knowledge and prepare for your time on the markets. You can explore different trends and events with our market deep dives as well as gain incite from our in-house experts and guests. 
     
    Where can you find them?
    Our Podcasts are now available on Spotify, Apple Podcasts, Google Podcasts and Deezer Podcasts. You can also find more information by following the link here.
     
    What Podcasts have we made so far?
    The IG Trading the Markets podcasts cover a range of topics on current market trends and educational material. Below you can find a list of the podcasts available so far.

     

     

    If you have anything you would like us to talk about, let us know by commenting so we can priorities your topics for our podcasts.
  8. MongiIG
    Dollar Up, Investors Digest Fed Minute’s Reaffirm of Taper Timeline.
     

     
    The dollar hovered near a three-month high versus major peers on Thursday after minutes of the Federal Reserve's June policy meeting confirmed the world's biggest central bank is moving toward tapering its asset purchases as soon as this year.
    The dollar index, which measures the greenback against six rivals, was little changed at 92.687 from Wednesday, when it touched 92.844 for the first time since April 5.
    Fed officials said substantial further progress on economic recovery "was generally seen as not having yet been met," although participants expected progress to continue and agreed they must be ready to act if inflation or other risks materialize, according to the minutes of the Federal Open Market Committee (FOMC)'s June policy meeting released Wednesday.
    Various participants at the session still felt conditions for curbing the bond-buying that is supplying markets with cash would be "met somewhat earlier than they had anticipated," while others saw a less clear signal from incoming data, the minutes showed.
    Economists polled by Reuters expect the Fed to announce a strategy in August or September for tapering its asset purchases. While most predict the first cut to its bond-buying program will begin early next year, about a third of respondents forecast it will happen in the final quarter of this year.
    "The FOMC remains one of the more hawkish central banks under our coverage," and will begin to discuss a taper at the policy meeting at the end of this month, Commonwealth Bank of Australia strategist Carol Kong wrote in a client note.
    "We therefore expect the USD to trade with an upward bias."
    The dollar was mostly flat at $1.17995 per euro, just off a three-month peak of $1.17815 touched overnight, when German data raised doubts about the strength of Europe's economic recovery.
    Investor sentiment in Germany, the euro zone's biggest economy, fell sharply in July, though it remained at a very high level, the ZEW economic research institute reported.
    Later on Thursday, European Central Bank President Christine Lagarde will hold a news conference after the monetary authority announces the outcome of an 18-month strategy review, which is likely to include a shift in the inflation target to 2% from "below but close to 2%" currently - which would theoretically allow for inflation overshoots.
    Elsewhere, the dollar slipped 0.3% to 110.300 yen, as the pair continued to be weighed down by a slide in U.S. Treasury yields.
    The benchmark 10-year Treasury note yielded 1.3045% on Thursday in Asia after dipping to 1.2960% overnight for the first time since mid-February.
    "The fall in U.S. yields complicates the picture, but we see it mostly as ... a recalibration of inflation expectations in the wake of the Fed’s hawkish pivot" at the June meeting, when policymakers surprised markets by signaling two interest rate hikes by end-2023, Westpac strategists wrote in a research note.
    The dollar index "remains a near-term buy on dips into 91.5-92.0," and may rally toward 93.45 to mark a fresh high since early November, the note said.
    The Australian dollar, widely viewed as a proxy for risk appetite, traded 0.3% weaker at $0.74605, but still near the middle of the broad range in place over the past three weeks.
    Reserve Bank of Australia Governor Philip Lowe reiterated Thursday that the unemployment rate would need to fall further and hold in the low 4% levels to lift inflation, an outcome not expected until 2024.
    The previous day, the central bank took its first step towards stimulus tapering by announcing that a third round of its quantitative easing program would be smaller in scale than the previous two.
    Meanwhile, the New Zealand dollar sank below the psychologically important 70 cent mark, sliding 0.5% to $0.69865.
    Oil-linked currencies weakened with crude continuing its slide after OPEC+ talks on increasing output ended at an impasse, with Russia now attempting to help bridge differences between Saudi Arabia and the United Arab Emirates.
    Canada's loonie fell to as low as C$1.25285 per dollar for the first time since April 22.
    The crown weakened as far as 8.7618 per dollar, a level not seen since December 21.
     
    By Kevin Buckland, Reuters, 8th July 2021. Investing.com
  9. MongiIG
    STOCK MARKETS
     

    NEW YORK (Reuters) - Stock investors are watching the dramatic moves in the Treasury market for clues on the fate of one of this year’s most successful plays - the so-called reflation trade that helped power shares of economically sensitive companies higher after nearly a decade of underperformance.
    Investors piled in to shares of energy producers, banks and other companies expected to benefit from a powerful economic rebound earlier this year while betting that Treasury yields, which move inversely to prices, would rise.
    That trade appears to be tottering now, as worries over slowing growth send yields tumbling to their lowest level in more than four months. While stock markets appear placid, with the S&P 500 hovering near a record high, a rotation beneath the surface has accelerated in recent weeks, as investors move out of economically sensitive names and back in to the big technology and growth stocks that led markets higher for most of the last decade.
    "If we do see a further drop in interest rates, if we do get below that 1.3% level in any kind of meaningful way, that is going to confirm that growth over value has returned and it is not just a head fake," said Matt Maley, chief market strategist at Miller Tabak.
    The S&P 500 has gained 7% since the 10-year Treasury yield hit a recent high in mid-May. A look under the hood, however, shows signs that a change in stock-market leadership may be taking place. The Russell 1000 growth index has gained over 13% since mid-May while the counterpart value index has climbed about 1.5% over the same time.
    "We do not expect the reflation and rotation trades to return to their former glory," while materials and energy stocks will likely be held back by falling commodity prices, noted Oliver Allen, markets economist at Capital Economics, in a note to clients. "The big boost to rotation from recovering risk appetite and rising growth expectations may mostly be over," he said.
     
    U.S. value vs growth stocks in 2021 https://graphics.reuters.com/USA-STOCKS/VALUE/xklvyxjlkpg/chart.png
     
    Concerns about the economic impact of the Delta variant of the coronavirus and falling commodity prices are helping push bond prices higher. At the same time, the Federal Reserve surprised many investors last month with a hawkish turn that suggested two interest rate hikes by 2023, calling into question its commitment to allowing inflation to run hot for a time.
    One key question for investors is whether recent signs of rising inflation - including the latest data on existing home prices, which showed them rising by their fastest pace in 15 years in April - will be short-lived.
    Federal Reserve officials last month felt further progress on the U.S. economic recovery "was generally seen as not having yet been met," but agreed they should be poised to act if inflation or other risks materialized, minutes of the central bank's June policy meeting showed.
    "The market going into the last FOMC meeting assumed that the Fed was comfortable with an inflation overshoot, but it became clear that the magnitude of how comfortable they were with an overshoot came down considerably," said Mike Sewell, a portfolio manager T Rowe Price, who expects that the 10-year Treasury has already hit its highest level for the year.
    Stocks’ relative calm does not mean that equity investors are impervious to growth worries.
    BlackRock Inc (NYSE:BLK), the world's largest asset manager, said on Wednesday in its mid-year investment outlook that it cut its position in U.S. equities to neutral, in part due to expectations that corporate profit margins will decrease.
     
    Meanwhile, a client survey from JP Morgan showed net bearish bets against Treasuries falling to their lowest level since late April in the week to July 6, while bullish positions stood at their highest since late March, suggesting there may be limited fuel for more downside moves in yield.
    "It will be interesting to see how positioning unfolds to see if there is enough of a washout to make the market cleaner and just more driven by fundamentals,” said Chuck Tomes, associate portfolio manager on the global multi-sector fixed income team at Manulife Investment Management.
     
    By David Randall and Lewis Krauskopf, (Reuters). Investing.com
    Date: 8th July, 2021
  10. MongiIG
    Dollar Down as Investors Await Fed Minutes
     
     

    The dollar was down on Wednesday morning in Asia ahead of the U.S. Federal Reserve’s release of the minutes from its latest meeting. The euro, meanwhile, fell to an almost three-month low against the greenback as German economic data disappointed and raised concerns about the country’s economic recovery from COVID-19.
    The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.01% to 92.532 by 11:41 PM ET (3:41 AM GMT).
    The USD/JPY pair held steady at 110.61.
    The AUD/USD pair inched down 0.07% to 0.7491 while the NZD/USD pair inched up 0.06% to 0.7015.
    The USD/CNY pair inched down 0.06% to 6.4714 and the GBP/USD pair inched down 0.01% to 1.3798.
    The euro traded at $1.1820, after hitting a three-month low of $1.1806 during the previous session. It also fell against the yen to 130.81 yen, close to a two-month low of 130.05 hit on Jun. 21.
    Data released on Tuesday said that the German Zentrum für Europäische Wirtschaftsforschung (ZEW) economic sentiment index fell sharply to 63.3, below the 75.2 in forecasts prepared by Investing.com and June’s 79.8 figure.
    Separate data also said that German factory orders contracted 3.7% month-on-month in May, against the 1% growth in forecasts prepared by Investing.com and April’s 1.2% growth.
    Meanwhile, the ongoing production dispute among the members of the Organization of the Petroleum Exporting Countries and allies (OPEC+) that caused a plunge in prices dampened sentiment for other risk-sensitive currencies.
    The Australian dollar also gave up its gains from Tuesday as investors digested the Reserve Bank of Australia (RBA)’s policy decision handed down that day. In its first step towards asset tapering, the RBA announced a smaller, third round of its quantitative easing program and retained the April 2024 bond for its three-year yield target of 0.1%. The interest rate remained unchanged at 0.1%.
    In the U.S., yields recently took a tumble after investors who had bet that the Fed would tighten its monetary policy sooner than expected thanks to rising inflation were forced to bail out of their positions.
    The minutes from the Fed’s June 2021 meeting, to be released later in the day, are widely expected to offer clues to the central’s bank’s policy outlook moving forward.
    However, some investors said that the clues are already there.
    “Many people seem to think the Fed will drop hints on tapering in August, and will say in September that it is considered, and it will be implemented in December. But I believe the Fed could move earlier than those timelines,” Sumitomo Mitsui (NYSE:SMFG) Bank chief strategist Daisuke Uno told Reuters.
    “The important point is, the Fed did already raise their inflation forecast,” Uno added.
     
    By Gina Lee, 7th July 2021. Investing.com
  11. MongiIG
    The week after the U.S. jobs report is usually one of the lightest of the month in terms of economic data and the coming holiday-shortened week will be no exception. Wednesday’s Federal Reserve meeting minutes may give investors an insight into policymakers behind the scenes discussions after a hawkish shift prompted market turbulence last month. The European Central Bank will also publish the minutes of its latest meeting, while China will release what will be closely watched inflation figures. And with markets going into the second half of the year investors are asking whether the stunning first half run can continue. Here is what you need to know to start your week.
     

     
    Fed minutes The minutes of the Fed’s June meeting, when officials opened talks on tapering bond-buying and indicated interest rate increases could come sooner than previously anticipated, are due to be released on Wednesday.
    The minutes are coming on the heels of Friday’s nonfarm payrolls report, which showed that the U.S. created the most jobs in 10 months in June, indicating that the economy closed out the second quarter with strong momentum as the reopening continued.
    The robust data did little to ease concerns that a strong recovery and rising wages could prompt the Fed to begin unwinding its easy money policies sooner than expected.
    That dynamic looks set to continue to weigh on markets ahead of the Fed’s July policy meeting and its annual meeting in Jackson Hole, Wyoming, in August.
    ISM services data The ISM index of service industry activity is set to be released on Tuesday and is expected to show continued strong growth after hitting a record high in May amid a reopening made possible by vaccinations against the coronavirus. The report could also underline ongoing labor constraints as hiring continues to lag, leading companies to offer higher wages to attract staff.
    This theme will likely be echoed by Wednesday’s JOLT - Job Opening and Labor Turnover - report. It is expected to show a new record for job openings, but that hiring continues to lag far behind given potential workers are either unable or unwilling to take a job.
    Investors will also be looking at Thursday’s figures on initial jobless claims. Last week’s report showed that initial claims dropped to the lowest level since March 2020, when widespread lockdowns were enforced to slow the first wave of the pandemic.
    Second half With markets into the second half of 2021, investors are now wondering if the stunning first half run can continue.
    Though U.S. stock markets are holding near record highs, some market analysts have pointed to signs of caution in some areas of the market.
    Travel and leisure stocks along with value shares have been weighed down by worries over the rapid spread of the COVID-19 Delta variant, while yields on U.S. government bonds have remained subdued amid concerns over a potentially more hawkish Fed.
    Some investors in recent weeks have also noted a concentration of the market’s gains in fewer stocks, which some view as a sign of declining confidence in the wider market.
    Investors will now shift their focus towards the second-quarter earnings season and progress on President Joe Biden's infrastructure bill which could help the stock market keep up momentum.
    ECB minutes The ECB is to publish the minutes of its June policy meeting on Thursday. ECB-watchers will also be on alert for news of several meetings due to take place in the coming weeks as part of the banks review of its monetary policy strategy.
    The bank wants to revamp its inflation target - currently set out close to but not above 2% - and is aiming to get the review done by September.
    On Wednesday, euro zone powerhouse German is to publish industrial production figures and the European Commission is to release updated economic forecasts for the European Union.
    China inflation China is to release data on both consumer price inflation and producer price inflation on Friday. Market watchers will be paying close attention to the cost of raw materials, which have soared due to higher commodity prices, and whether these increases are being passed onto the consumer.
    Prices are jumping in China and around the world, adding to fears that a wave of inflation could threaten the global economic recovery if it continues.
    Reuters contributed to this report
     
    By Noreen Burke, 6 July 2021. Investing.com
  12. MongiIG
    GOLD PRICE OUTLOOK:
    Gold prices are trading higher on Monday following strong US nonfarm payrolls data The US Dollar retreated alongside Treasury yields, boosting precious metal prices Traders are eyeing $1,795 for resistance, breaching which may lead to further gains
     
    Gold prices traded modestly higher during Monday’s APAC session, as a weaker US Dollar and lower yields bolstered the appeal of the yellow metal. Prices continued to consolidate in a tight range between $1,750 - $1,795 waiting for fresh catalysts. The DXY US Dollar index pulled away from a 3-month high and Treasury yields retreated across the curve - both are exerting upward pressure on gold. The closure of US markets on Monday may thin out trading volume however.
    US nonfarm payrolls beat market expectations on the upside, with hiring accelerating in June as labor market supply constraints eased. 850k new jobs added, marking the highest reading in 10 months (chart below). Average hourly earnings rose 0.3% MoM and 3.6% YoY, reflecting strong demand for labor. An upbeat payrolls figure strengthened the prospects for the US economic recovery, yet the pace of job growth didn’t appear to have reached a level that would prompt the Fed to tighten quickly. This created an ideal backdrop for gold to recover some losses and attempt a near-term breakout.
    The medium-term outlook for gold remains bearish-biased however, as central banks around the globe are moving closer to gradually scaling back the pandemic-era monetary stimulus, including asset purchases and ultra-low interest rates. Traders are eyeing this week’s RBA meeting and June FOMC minutes for fresh clues about this prospect.
    US Nonfarm Payrolls – Past 12 Months

    Source: Bloomberg, DailyFX
    Gold Price Technical Analysis
    Technically, gold prices are consolidating in a tight range between $1,750 - $1,795 as shown on the chart below. The overall trend remains bearish-biased after prices breached below the floor of the “Ascending Channel” in mid-June. An immediate support level can be found at $1,750 – the 78.6% Fibonacci retracement. The MACD indicator is about to form a bullish crossover and trended lower, suggesting that near-term selling pressure may be fading.
    Gold Price – Daily Chart

    Gold Bullish Data provided by IG  84% of clients are net long. CHANGE IN LONGS SHORTS OI DAILY 2% 4% 2% WEEKLY -8% 23% -4%  
    Written by Margaret Yang, CFA, Strategist for DailyFX
    5 JULY, 2021
  13. MongiIG

    Trading Forex at the News Release

    By MongiIG,


    Analyst piece
    Trading Forex at the News Release
     
    Trading forex news releases requires a tremendous amount of composure, preparation and a well-defined strategy. Without these qualities, traders can easily get swept up in all the excitement of a fast-moving market to their detriment. This article provides useful strategies on how to trade forex news during a major news release.

    FOREX NEWS TRADING STRATEGIES
    There are two common strategies for trading forex at the news release:
    Initial Spike Fade strategy News Straddle strategy Each one provides a robust plan for traders to follow, depending on the market environment observed at the time of the release, and how best to approach that particular market.
    Before reading further it is essential that you have a good grasp on the basics of news trading. If you are new to trading or simply require a refresher, take a look at our introduction on how to trade forex news.
    1. Initial Spike Fade Strategy
    This strategy looks to capitalize on an overreaction in the market over the short term by fading the initial move. This strategy suits reversal traders, scalpers and day traders due to fast moving and erratic pricing that often follows a major news release.
    Overreactions and subsequent reversals are seen fairly regularly in the forex market as large institutions add to the increased volatility of the initial move. The market as a whole, often spikes as an overreaction and subsequently push price back toward pre-release levels.
    Once the market calms down and spreads return to normal, the reversal often gains momentum showing early signs of a potential new trend.
    The shortfall associated with this strategy is that the initial spike may turn out to be the start of a prolonged move in the direction of the initial spike. This underscores the importance of using well-defined stops to limit downside risk and get you out of a bad trade quickly.
    How to implement initial spike fade strategy:
    Select the relevant currency pair: Ensure the major news event corresponds to the desired currency pair to trade, i.e. Non-Farm Payrolls will affect USD crosses. Switch to a five-minute chart: After selecting the desired market, switch to a 5-minute chart just before the news release. Observe the close of the first five-minute candle: The first five-minute candle is usually quite large. When price approaches either the spike high or the spike low, fade the move by trading in the opposite direction. Stops and limits: Stops can be placed 15 pips above the high for a short trade or 15 pips below the low for a long trade. Targets can be set at two or three times the distance of the stop.
    2. News Straddle Strategy
    The news straddle strategy is perfect for traders expecting a huge surge in volatility but are unsure of the direction. This strategy lends its name from a typical straddle strategy in the world of options trading as it uses the same core strategy – to capitalize on an increase in volatility when direction is uncertain.
    The disadvantage of the news straddle approach surfaces when price breaks support or resistance only to reverse soon thereafter. Similarly, price can trigger the entry order and move toward your target only to reverse until a stop it hit.
    This strategy can be implemented using the following steps:
    Establish a range with support and resistance. Set two orders to open: Set a working order/ entry order to open a long trade if price breaks above resistance and one to go short if price trades below support. Remove remaining order after confirming direction: The market has the potential to breakout of the range and once this happens, the one entry order will be triggered, and a trade will be opened. Immediately remove the entry order that was not triggered. Stops and limits: A tight stop can be placed at the recent range low when going long and recent high when going short. Limits can be placed in line with a positive risk to reward ratio.
    TRADING THE NEWS DURING THE RELEASE: CONCLUSION
    Trading forex news at the news release has the potential to overwhelm traders with increased volatility in a short period of time. However, through the adoption of a solid strategy, traders can approach these volatile periods with greater confidence and mitigate risk of a runaway market through the use of guaranteed stops (where available).
     
    Article by Richard Snow, Markets Writer 2 July 2021. DailyFX
  14. MongiIG
    SENTIMENT INDICATORS: USING IG CLIENT SENTIMENT
    The IG Client Sentiment (IGCS) is unique, proprietary and potentially helpful to traders. The article will outline the following illustrative points:
    What is IG Client Sentiment (IGCS)? Sentiment Indicators IGCS as a Leading Indicator IGCS as a Technical Indicator: Summary  

     
     
    WHAT IS IG CLIENT SENTIMENT (IGCS)?
    IG Client Sentiment (IGCS) is a tool that traders can use in conjunction with a broader technical and/or fundamental strategy. IGCS incorporates retail trader positioning (long and short) to formulate a sentiment bias. This is represented in percentage form (see image below) which aids traders in identifying market imbalances which could lead to possible opportunities.
    IGCS on EUR/USD:

    SENTIMENT INDICATORS
    Sentiment indicators are few and far between. The two most well-known are open interest in options, which largely applies to stocks, and the Commitment of Traders Report (CoT). What sets IGCS apart is the large sample size of retail traders which deliver more usable data in terms of indicator readings, multiple market data sets (FX, equities commodities) and timely updates for these markets which are refreshed several times daily.
     
    IGCS AS A LEADING INDICATOR
    The use of IGCS as a technical indicator can allow traders to confirm or refute signals produced by their wider trading strategy. Both fundamental and other technical techniques are used to gauge trends, ranges, potential reversals etc. so incorporating IGCS provides another layer of data to help verify a hypothesis.
    IGCS can be considered as a leading indicator as it uses past and current data to project possible future price movements however, as IGCS (retail) covers only one component of the market equation, traders should not rely solely on the IGCS tool for trading decisions. Simply put, retail traders contribute only a certain percentage of market input so naturally other factors will have influence on the respective market.
    For example, the EUR/USD chart below shows the projectible nature that can occur with IGCS. The highlighted are on the chart exhibits an increase in net short positions from retail traders which coincided with a rise in price action (EUR appreciation) on the price chart itself.
    IGCS EUR/USD:

     
    IGCS AS A TECHNICAL INDICATOR: SUMMARY
    We have shown how sentiment/IGCS can be a unique, proprietary and potentially helpful addition to a trader’s approach. In subsequent IGCS articles in this market sentiment sub-module, we will go through the implementation and flexibility of this tool in varying trading circumstances.
     
    1 July 2021 Warren Venketas, Markets Writer
    Source: DailyFX
           
  15. MongiIG
    Friday’s US jobs report is expected to bring an improved payrolls figure, although recent ADP and jobless claims data does raise questions.
      The June US jobs report is due to be released at 1.30pm, on Friday 2 July (UK time). Coming at a time when markets are desperately trying to ascertain whether the Federal Reserve (Fed) was right to take on a more hawkish stance, this months jobs report provides a critical update on the health of the economic recovery in the US. Last month saw a somewhat underwhelming rise in payrolls, with a reading of 559,000 falling short of market expectations. While we did see an improvement over the prior month, we are yet to see a sustained recovery in jobs. With the Fed shifting in anticipation of higher prices and jobs, the ability to maintain an upward economic trajectory will be key for monetary policy expectations.
    What do other employment readings tell us?
    Markets are optimistic for Friday’s jobs report, with predictions of a figure around 700,000 for the headline payrolls figure highlighting the feeling that this recovery will continue to gain momentum. One method to gauge where Friday's jobs figure could come in is to look at some of the alternate employment surveys released in the lead-up to this report.
    The ADP private payrolls survey provided a somewhat mixed picture, with the reading of 692,000 representing a better-than-expected figure but lost ground against the prior month’s 886,000. Meanwhile, that prior figure was also heavily revised down from the initial estimate of 978,000. The image below highlights how the June figure represents the first decline for the ADP payrolls survey since February. Hardly the kind of release that inspires confidence.
    The unemployment claims data has also taken a turn for the worst of late, with the steady decline seen over the course of May running into trouble in early June. The inability to continue driving lower highlights a bump in the road which could be reflected in Friday's jobs report. That tick higher is reflected in the four-week average claims. Nonetheless, the chart below highlights the positive trajectory seen over recent months.
    Source: Department of Labour What is expected?
    The first thing financial markets will be looking at will be the non-farm payrolls figure, with expectations of a rise into 700,000 providing a marker for traders to gauge the latest release against. Weakness across some of the secondary employment surveys highlights the potential for this to underperform.
    After the payrolls figure, traders will typically look towards the unemployment rate as a key gauge of whether the economic advancement remains on track or has started to stall. Forecasts point towards an improved figure of 5.6%, following a 14-month low of 5.8% last month. One element that could hold back the decline in unemployment would be a rise in the participation rate, which remains stubbornly low after the collapse in early 2020. With the participation rate expected to climb as the recovery gathers pace, it is likely that this proves a hinderance for the unemployment rate. It could just make more sense to look at the U-6 unemployment rate given that this also includes those removed from the common U-3 rate.
    Source: macrotrends.net  
    On the average earnings front, markets are looking for growth to remain elevated after two months of sharp gains. Predictions of 0.4% may be down on the previous two month’s readings of 0.7% and 0.5%, yet such consecutive monthly growth rates are very rare.
     
    IG Joshua Mahony | Senior Market Analyst, London | Publication date: Thursday 01 July 2021 
     
  16. MongiIG
    CRUDE OIL PRICE OUTLOOK:
    Oil prices are steady on Wednesday after API reported a larger-than-expected fall in crude inventories OPEC+ will meet to discuss easing pandemic-era production cuts on Thursday WTI is challenging a key chart resistance at $73.5, but upward momentum is fading Source: Bloomberg
    Crude oil prices held gains during Wednesday’s APAC session, trading near two-and-half year highs. Risk appetite was revitalized after a lab report showed that Moderna’s Covid-19 vaccine is effective in producing antibodies against the Delta variant - a newly found viral strain from India. Yet, questions remain on the production capacity and distribution of Moderna’s vaccine as viral strains continue to spread and mutate.
    The Delta variant was attributed to the recent surge in Covid-19 cases in the UK and Australia, threatening a new round of lockdowns and travel restrictions around the world. This may cast a shadow over the recovery of global energy demand, especially among countries that have relatively slow vaccination progress. A worsening pandemic situation may limit upside potential for crude oil prices.
    Meanwhile, OPEC+ will meet to discuss easing production curbs further in August to meet rising fuel demand. A Bloomberg survey shows that the oil cartel may increase output by 550k bpd in August, which is only a fraction of an estimated global supply shortfall of 3 million bpd. Therefore, tight market conditions may warrant a slow and gradual output increase without causing significant price volatility.
    The oil cartel and its allies have slashed production by more than 5 million bpd since the onset of the Covid-19 pandemic. During a April meeting, OPEC+ decided to lifted output cuts by 2.15 million bpd from May to July as demand rebounded sharply (chart below).
    Expected OPEC+ Production Hike in August 2021

    News from DailyFX
     
  17. MongiIG
    Knowing how to control emotions while trading can prove to be the difference between success and failure. Your mental state has a significant impact on the decisions you make, particularly if you are new to trading, and keeping a calm demeanor is important for consistent trading. In this piece, we explore the importance of day trading psychology, for both beginner and more experienced traders, and give some pointers on how to trade without emotions.
    THE IMPORTANCE OF CONTROLLING EMOTIONS WHILE TRADING
    The importance of day trading emotional control cannot be overstated.
    Imagine you’ve just taken a trade ahead of Non-Farm Payrolls (NFP) with the expectation that if the reported number is higher than forecasts, you will see the price of EUR/USD increase quickly, enabling you to make a hefty short-term profit.
    NFP comes, and just as you had hoped, the number beats forecasts. But for some reason, price goes down!
    You think back to all the analysis you had done, all the reasons that EUR/USD should be going up – and the more you think, the further price falls.
    As you see the red stacking up on your losing position, emotions begin to take over – this is the ‘Fight or Flight’ instinct. This impulse can often prevent us from accomplishing our goals and, for traders, this issue can be very problematic, leading to knee-jerk reactions.
    Professional traders don’t want to take the chance that a rash decision will damage their account – they want to make sure that one knee-jerk reaction doesn’t ruin their entire career. It can take a lot of practice, and many trades, to learn how to minimize emotional trading.
     
    THE 3 MOST COMMON EMOTIONS TRADERS EXPERIENCE
    Some of the most common emotions traders experience include fear, nervousness, conviction, excitement, greed and overconfidence.
    Fear/Nervousness
    A common cause of fear is trading too big. Trading with improper size magnifies volatility unnecessarily and causes you to make mistakes you normally wouldn’t make if you weren’t under the stress of risking larger losses than normal.
    Another culprit for fear (or nervousness) is you are in the ‘wrong’ trade, meaning one that doesn’t fit your trading plan.
    Conviction/Excitement
    Conviction and excitement are key emotions you’ll want to feed off, and you should feel these in every trade you enter. Conviction is the final piece of any good trade, and if you don’t have a level of excitement or conviction then there is a good chance you are not in the ‘right’ trade for you.
    By ‘right’ we mean the correct trade according to your trading plan. Good trades can be losers just as bad trades can be winners. The idea is to keep yourself winning and losing on only good trades. Making sure you have conviction on a trade will help ensure this.
    Greed/Overconfidence
    If you find yourself only wanting to take trades that you deem as possible big winners, you could be getting greedy. Your greed may have been the result of doing well, but if you aren’t careful you may slip and end up in a drawdown.
    Always check that you are using proper trade mechanics (i.e. sticking to stops, targets, good risk/management, good trade set-ups). Sloppy trading as a result of overconfidence can end a strong run.
    Learn more about managing greed and fear while trading.
    DAILYFX ANALYST NICK CAWLEY ON LOSING DISCIPLINE

    Nick Cawley has more than 20 years’ experience in the markets and trades a variety of fixed-income products.
    "My worst trades - and there have been a few of them - have all been when my best laid plans are thrown out of the window when I lose discipline.
    ‘I didn’t use correct set-ups and stops; I thought I was ’better’ than the market; I doubled up when I was losing and lost more, and I put more money into my trading account to chase my losses.
    ‘I lost control of my emotions and traded when I should have looked without any emotion at my position and cut them and moved on. Easy to say, difficult to do, but a must for any trader who is looking for long-term success."
    HOW TO CONTROL EMOTIONS WHILE TRADING: TOP TIPS AND STRATEGIES
    Planning out your approach is key if you want to keep negative emotions out of your trading. The old adage ‘Failing to plan is planning to fail,’ can really hold true in financial markets.
    As traders, there isn’t just one way of being profitable. There are many strategies and approaches that can help traders accomplish their goals. But whatever is going to work for that person is often going to be a defined and systematic approach; rather than one based on ‘hunches.’
    Here are five ways to feel more in control of your emotions while trading.
    1. Create Personal Rules
    Setting your own rules to follow when you trade can help you control your emotions. Your rules might include setting risk/reward tolerance levels for entering and exiting trades, through profit targets and/or stop losses.
    2. Trade the Right Market Conditions
    Staying away from market conditions which aren’t ideal is also prudent. Not trading when you aren’t ‘feeling it’ is a good idea. Don’t look to the market to make you feel better; if you aren’t up to trading the simple solution may just be to step away.
    3. Lower Your Trade Size
    One of the easiest ways to decrease the emotional effect of your trades is to lower your trade size.
    Here’s an example. Imagine a trader opens an account with $10,000. Our trader first places a trade for a $10,000 lot on EUR/USD.
    As the trade moves at $1 a pip, the trader sees moderate fluctuations in the account. An amount of $320 was put up for margin, and our trader watches their usable margin of $9,680 fluctuate by $1 per pip.
    Now imagine that same trader places a trade for $300,000 in the same currency pair.
    Now our trader has to put up $9,600 for margin – leaving them with only $400 in usable margin – and now the trade is moving at $30 per pip.
    After the trade moves against our trader only 14 pips, the usable margin is exhausted, and the trade is closed automatically as a margin call.
    The trader is forced to take a loss; they don’t even have the chance of seeing price come back and pull the trade into profitable territory.
    In this case, the new trader has simply put themselves in a position in which the odds of success were simply not in their favor. Lowering the leverage can greatly help diminish the risk of such events happening in the future.
    4. Establish a Trading Plan and Trading Journal
    In terms of fundamental factors, planning for various outcomes in the runup to key news events may also be a strategy to bear in mind.
    The results between new traders using a trading plan, and those who don’t can be substantial. Compiling a trading plan is the first step to attack the emotions of trading, but unfortunately the trading plan will not completely obviate the effects of these emotions. Keeping forex trading journals may also be helpful.
    5. Relax!
    If you're relaxed and enjoy your trading, you will be better equipped to respond rationally in all market conditions.
     
    Jun 28, 2021 4:00 AM +02:00Ben Lobel, Markets Writer

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