Trading is a risky business. You can make or lose money, but it’s hard to know exactly how much you’ll win or lose with each trade. That makes trading more dangerous than gambling because gamblers usually have a clear idea of their odds and what they could potentially win or lose with each bet. The lack of limits in trading means that prices can keep moving up or down indefinitely, making your potential gains and losses bigger and bigger. It’s easy to get carried away when you think you’ll become rich if only the market goes your way; however, ignoring evidence that the market won’t go your way will probably lead to disaster. Remain objective about the risks involved in trading so that you don’t fall prey to wishful thinking about getting rich quickly at all costs.
Archives of “January 17, 2022” dayrss
The price of an asset is determined by the consensus view of all traders. It doesn’t matter what they actually believe or how much information they have. The price is right if it reflects the consensus opinion, even if most traders are irrational and uninformed. No trader can be more right than the market itself, because no one has sufficient financial clout to move prices around on their own for a long time. A careful observer can predict where prices will go next based on current trends and news events, but you should not cling to your predictions when prices move in another direction.
If omicron continues to be the more widespread strain of COVID-19 infections (which should be the case) by then, expect vaccine makers to steadfastly roll out a specific vaccine for it in March to April. The world should then look towards that being the “main” vaccine unless another more potent and infectious variant comes around.
- Domestic sight deposits CHF 655.1 bn vs CHF 650.6 bn prior
Prior week’s release can be found here. Little change in overall sight deposits after what has been a rather conspicuous start to the new year from the SNB in getting EUR/CHF to 1.0500 last week.
I’ve mentioned quite a few times already in the past few weeks, that I just don’t see any bigger risk to the global recovery than China. The omicron risks there are something that will percolate to global supply chains, inflation, and thus central bank outlook as well. And with Beijing being hit now, there’s more scrutiny than ever for China to try and control the situation.
I’m not trying to be a fear monger, but I reckon broader markets are severely underestimating the potential impact of the actions that Chinese authorities may take in relation to this. As such, keep an eye out for the headlines in the days ahead. They may not gather much immediate traction but the fallout can be massive. From last week:
Japan Core Machinery Orders for November 2021
expected 6.1%, prior 2.9% y/y
expected 1.4%, prior 3.8% m/m
The data point is used as a capex indicator for Japan in the months ahead
Japan’s government has raised it machine orders assessment, says the orders are showing signs of a pickup.
Via Bloomberg (may be gated) :
- prices could go up higher
- supplied are tight
- What’s happening with gas “serves to remind us that people will abstain from buying expensive energy at some point,” he said on a webinar hosted by Dubai-based consultancy Gulf Intelligence. “The question is at what point that affects the oil market.”
Also, on China (this via Platts (may be gated) ):
- “It doesn’t look like China is going to shrink its [oil] demand,” Mike Muller told an online conference organized by Dubai-based Gulf Intelligence. “The fabric of society is still heavily oriented towards manufacturing and energy-consuming businesses,”
- “Yes there have been some very high profile cases of people moving around China transmitting omicron from one place to another….but we are nowhere near seeing a major demand hit,”