Fed Brainard Raises Concerns Over Bond Market Moves

Lael Brainard, a senior Federal Reserve official, has raised some concerns over bond markets over the past week as they have raised alarms for the US central bank. Fed Brainard stated that she will be paying close attention to market developments as some of the moves and their speeds last week managed to catch her eye. She further mentioned that signs of disorderly conditions or persistent tightening in financial conditions would be concerning as that would slow down the progression of the central bank’s goals to reach a strong labor market and a stable 2% longer-run inflation. 

Ms. Brainard’s comments were made after government bond yields soared above 1.6% last week, a rise that shook the financial market. It managed to drop down to 1.41% this week, however, Fed Brainard doesn’t believe that the rise in inflation was responsible for bond market sell offs deteriorating last week. 

Instead, rises in bond yields are believed to be driven by investors assuring that growth and inflation will be much higher this year. This in turn could usher the Fed to retrieve its support in place for the economy and markets sooner than they had expected. While Fed officials have maintained that they will be tolerant in keeping the policy help in place and although they do expect price gains to appear later in the year, the increase is not expected to last. 

Fed Brainard’s comments haven’t had a significant impact on market sentiment, the S&P 500 Index was down 0.14% on a daily basis at 3,896 and the Dow Jones Industrial Average was rising 0.1% at 31,570.

 

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Leverage

In terms of trading, leverage is borrowed capital that allows you to increase your potential profits or losses. In Forex a common leverage amount offered is 100:1, meaning that for every $1 you have you can control $100 in equity.

Margin

Margin is the collateral you must keep in your account to maintain a leveraged position.

Open A Forex Trading Account

Opening a trading account with an Australian Forex Broker is an easy process that can typically be completed within a matter of minutes. To open an account with a forex broker there are three main steps:

  1. Fill out personal information
  2. Verify account with documents
  3. Client Qualification questionnaire

To open an account, you will need to provide your full name, nationality, email and phone number. Once you’ve completed these and set up a password you will typically be asked to choose the type of account and the trading platform, as well as your base currency. You will also be asked for your country of tax residence and tax details (TFN for Australians). Typically, providing specific tax information such as TFN is not compulsory. Brokers will also ask if you are a politically exposed person. The final personal information you must provide is your contact information, including your full address and how you would prefer to be contacted

The next section is financial information. Here you must provide your employment status information, annual income bracket and liquid net worth. Once you are through this section, the broker will ask your about your trading experience (Years) on securities, options, commodities, futures, CFD’s and OTC Forex Exchange, and if you understand the risk of margined transactions.

The client questionnaire assesses whether your knowledge of CFD’s is suitable for opening an account.

Margin Call

A margin call is a demand from the broker for the client to deposit funds to meet margin requirements for open/closed positions.

Short Position

A short sell is a position where the trader anticipates the price of an instrument to decrease, and sells a borrowed asset to buy it back in the future.

Long Position

A long position is a buy position, where the trader anticipates the price of an instrument to increase.

Test2

This is a test, all systems go!

Indicator

An indicator is something that assists traders finding where to enter and exit trades. An indicator could be calculated like a moving average or RSI or a drawn support/resistance level.