The headlines on the front page of the
Wall Street Journal
, front and center, read "Yellen Sends Strong Signal on Rates."
The Financial Times reported
, "Gold bugs initially breathed a sigh of relief after Fed chair Janet Yellen said the argument for a rate rise had 'strengthened' but stopped short of signaling that a move could come in September
Fed vice-chairman Stanley Fischer, who was interviewed on
CNBC
soon after the speech, played the interpreter role. Mr. Fischer made "some bullish remarks on the US economy" and then said that "Ms. Yellen's remarks were consistent with the possibility of a rate rise as early as next month."
These are the news sources, pay close attention, remember the markets make little sense and hindsight is 20/20. I was discussing this with a friend who does Options for a very large bank in Singapore.
For simplicity I shall use the USDJPY, as I am in it, as a proxy for our discussion. We were agreeing over the initial movement of the USDJPY market was correct from an academic economics perspective.
However, the market shortly reversed. The following day, I had another conversation with someone else on how the upward movement was academically correct given the circumstances.
So who is correct? The answer is not clear, nor black or white. A couple of students who study Finance is not a good proxy, neither are the popular news outlets WSJ, BT and CNBC.
When it comes to life, I end arguments on how the market should react with a lot of people with a simple statement. If you know the market, why don't you trade? After all smart, high profile traders such as Bill Gross use economic conditions and their track record shows what they are talking about.
Etoro makes a lot of sense because no matter what someone says, the proof is in their trading.
eToro AUS Capital Limited AFSL 491139. eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
Stay safe people!