From the desk of Joe Rios
The bond market stole center stage last week driven by another spike in the German bund yield. US treasuries also sold-off but managed to recover by the end of the trading week. Analysts have been blaming the recent volatility in the global bond market to lack of liquidity, risk management strategies employed by large fund managers and technical in scope.
” But the main driving factor driving yields up is more technical than fundamental, and is in a strange way the result of central banks’ success in pushing yields down. Those efforts have led investors and traders to take on bigger positions, according to strategists at J.P. Morgan.” – WSJ
In the commodity market Silver gained 6.44%, Wheat climbed 6.07%, Natural Gas rallied 4.76% and Gold closed the week 2.87% higher. In the currency market the US Dollar continued to fall -1.68% pushing the Euro 2.15% higher, followed by the British Pound 1.76%. The fundamental case for a strong dollar was viewed on the difference in monetary policy but technically, it remains vulnerable to further downside price action. The US Dollar gained 27.5% between May 2014 and March 2015, a very strong move in only 11 months. Even though the recent drop has been sudden, it’s only a -7.4% move.
In the week ahead I will continue to focus on the technicals and be selective in the markets most poised for aggressive price action. Correlations should also play an important role in market selection. Will correlations continue to be mixed and loose or will they tighten and revert back to the previous “norm”? Join us this week in our live trading room and watch how we use intermarket relationships to uncover trading opportunities.
– Joe Rios
Live Trading Rooms and Educational Events
The Trading Room TradeLAB – Global Trading with Quantitative Technologies
Monday through Friday
RQ trade coaches include Agustin Criado and Joe Rios. Live demonstration of our pre-market quantitative analysis, real-time trading signals with RQ algorithmic technology, strategy performance review and Q&A session.
ATTENTION MEMBERS – To access The Trading Room® TradeLAB please log-in on the riosquant.com site and click on the link under The Trading Room. If you are already logged in, then click on the “My Account” found on the upper right hand corner of the first page.
RQ Workshop Training – How to Trade Currencies NOW!
Tuesday – May 19th 8:00 – 9:00 pm ET
Join the RiosQuant traders and coaches as they outline how to trade foreign currencies in the week ahead. Recent price action has resulted in favorable risk to reward trade set ups and prices are at a key level in a few select currencies. Learn the secret to currency selection, don’t miss this special and relevant training session.
2:00 AM USD FOMC Member Evans Speaks
9:30 PM AUD Monetary Policy Meeting Minutes
11:00 PMNZD Inflation Expectations
4:30 AM GBP CPI
5:00 AM EUR German ZEW Economic Sentiment
8:30 AM USD Building Permits
11:45 AMCAD BOC Gov. Poloz Speaks
7:50 PM JPY Preliminary GDP
4:30 AM GBP Official Bank Rate Votes
8:30 AM CAD Wholesale Sales
10:30 AMCL Crude Oil Inventories
2:00 PM USD FOMC Meeting Minutes
9:45 PM CNY HSBC Flash Manufacturing PMI
3:00 AM EUR French Flash Manufacturing PMI
3:30 AM EUR German Flash Manufacturing PMI
8:30 AM USD Unemployment Claims
9:45 AM USD Flash Manufacturing PMI
10:00 AMUSD Philly Fed Manufacturing Index And Existing Home Sales
10:30 AMNG Natural Gas Storage
1:30 PM EUR ECB Draghi Speaks
1:30 PM USD FOMC Member Fischer Speaks
Tentative JPY Monetary Policy Statement
Tentative JPY BOJ Press Conference
4:00 AM EUR German Ifo Business Climate
7:00 AM GBP Gov. Carney Speaks
8:30 AM CAD core CPI and retail sales
8:30 AM USD core CPI
9:30 AM EUR ECB president Draghi speaks
9:30 AM GBP Gov. Carney speaks
9:30 AM JPY Gov. Kuroda speaks
THERE IS A SUBSTANTIAL RISK OF LOSS IN TRADING COMMODITY FUTURES, OPTIONS, AND FOREIGN EXCHANGE PRODUCTS. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS