The betting odds for Brainard as the next Fed chair are rising

Trading scandal and oversight dog Powell

Trading scandal and oversight dog Powell
Jerome Powell is still the favorite to be re-nominated as Fed Chair but his odds took a hit today on PredictIt, with Brainard’s values rising to the best yet.
It’s basically a 70-30% betting market. Brainard previously hit a high of 30-cents back on August 10.
I certainly don’t take PredictIt odds as definitive of anything but Powell is collecting some baggage and the Fed trading scandal happened at the worst possible time.
For me, this would be an easy decision. Politics is about winning and easy money boosts asset prices. Sure, inflation could bite one day but if you want to win the mid-terms, keep the party going.
Now whether that’s the best move for America is a different question.
At the end of the day, they’re both extremely well-qualified and Powell gives you more cover than Brainard. He also has a good record as a communicator and that’s a tough combo to give up.
What’s the trade? If it’s Brainard, sell bonds and buy gold.

US 10-year yields hit a fresh session high in rise above 1.56%

It’s been a quick move from 1.30%

US 10 year yields
The market is suddenly very concerned about inflation.
US 10-year yields are up 7.6 basis points today to 1.560% after chopping in the 1.55-1.52% range early in European trading.
I don’t rule out that some month-end flows or a squeeze is pushing this move too far, too fast. At the same time, there’s absolutely zero value proposition in getting paid 1.56% for 10 years in an inflationary environment.
Further out the curves, 30s are getting pounded even harder, up 9 bps to 2.095%. That’s from 1.82% a year ago. How many years of returns has that wiped out?

OPEC sees its own output below 2019 levels through 2026

Highlights of OPEC’s World Oil Outlook

  • Sees world oil demand rising by 1.7 mbpd in 2023 to 101.6 mbpd as world recovers from pandemic
  • Projects global oil demand will plateau after 2030
  • Sees US shale oil output peaking around 2030
  • There is the potential for further volatility and a supply shortfall if necessary oil industry investments are not made
  • Sees 2030 demand at 106.6 vs 107.2mbpd in last year’s forecast
This is a view on the longer term. As we can all see from today’s energy prices, even the short term is nearly impossible to predict

Fed’s Bullard sees two rate hikes in 2022

Comments from Bullard

Comments from Bullard
  • Calls for balance sheet to begin declining as soon as bond purchases end
  • The Fed is showing commitment to higher inflation framework but now risks overachieving with inflation too high for too long
  • ‘Robust’ expansion to continue through 2022
  • At this point, it would take ‘a very large shock’ to throw off start of taper
  • Policy normalization can move faster than 2007-09 given the speed of the recovery

Bullard is slowly turning into a major hawk. What’s scary about him is that he will often shoot from the hip and isn’t scared of roiling markets with a comment, so it will be a small headwind every time he talks. That said, the market largely stopped paying attention to Bullard a long time ago.

Cable falls to lowest in ten weeks as pound weakens alongside firmer dollar

GBP/USD falls below 1.3600 for the first time since 21 July

GBP/USD D1 28-09

The worries are mounting for the UK economy amid the latest fuel shortage and energy crisis, bringing about risks of stagflation. That means we might actually get to see the BOE hike rates sooner rather than later as we approach year-end.

Money markets have now moved to price in a BOE rate move to 0.50% in June next year as compared to August pricing last week. While that may seem supportive for the pound, the reasoning for such a hike in rates is less encouraging.


6 trading styles you should know

Starting up trading with no experience is not without its difficulties, especially during this challenging time. It takes a lot of time, effort, and knowledge to make it work.

How you fare at trading depends on how you ruminate on trading, what sort of profits/returns you are looking at, and how much risk you are willing to take.

Consequently, you can devise your own strategies and goals, and achieve them to make the most optimal profits.

Traders who want to start their first trading will be glad to learn there are a variety of styles and strategies tailored for certain personalities. Here are a few trading styles you can experiment with based on your personality:

1.            Day Trading

This type of trader focuses primarily on starting and completing tasks on the same day. That’s you if you prefer taking one trade a day and closing it before the day ends even if that means staying up until late at night.

Generally, day trading is classified as a short-term trading style due to its nature – the intention of gaining returns from small price movements.

You might be apt for the day trading style if you are persistent. A strong day trader is persistent as they like sticking to a certain style/strategy when it works for them.

Discipline – day traders can manage their plan of how they approach their trading and what they do during market hours. They have a strict schedule to follow every single day without fail.

Also, it is important for day traders to be sharp as day trading is known as the game of minutes. Traders can’t afford to be pensive or apprehensive as they must act quickly when they see the opportunity.

2.            Position Trading

A position trader specializes in having a long-term outlook even it means days, months, or years. Thus, it is known as a long-term strategy mainly focused on fundamentals however, technical principles may come in handy as well.

If you lean more on position trading, ensure to comprehend how economic factors can affect markets and thorough technical understanding, is super important in predicting trading plans.

Patience is a virtue for position traders as they won’t make short term profits and you need to be extremely patient to achieve your profit goals. It is best suited for those who have already have a full-time job and not wanting to be worried about price fluctuations every single day. The goal for this trader is to make profits in a long run. That means you enjoy more delayed gratification over instant gratifications. (more…)

BP says oil demand and supply will both rise next year, supply growth to outpace

Via Bloomberg comes this from oil firm BP, in brief:


  • expects global oil consumption will return to pre-pandemic levels in Q3 2022
  • Asia persisting as the centre for oil-product demand growth
  • 2022 oil demand expected average gain of 3.8 m bpd y/y v (down from 2021 at 5.4 m bpd)


On the supply side of the ledger:


  • global oil output growth will probably exceed consumption in 2022
  • OPEC+ and US producers will add more output
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