A look at the week starting November 4
I have put together a few thoughts in this video on the trading week ahead. If you have a 15 minutes, then the idea of the video is to prepare and to specifically help with your risk and position sizing, which is fundamental to trading.
As always, I have not just looked at the key event risk but taken a more holistic approach to understanding our risk-to reward profile. Here, I have included the weekly volatility report, which is essential to me to understand how the market interprets risk, and the expected moves on the week (up or down from spot). Most will use realised vol measures to assess their risk on entry, and then adopt for correct position sizing, and if that provides an edge don’t change that, but my preference is to look ahead and therefore implied volatility.
I’ve included an update to the interest rate pricing model, which has garnered some focus after a big week of central bank action, it gives you a sense of expectations, not just the upcoming meeting, but what’s priced across the curve.
With the move to a more definitive data-dependent model, with their mantra changed to “assessing the appropriate policy path”. My colleague Sean and I have built a basic FOMC considerations model. These are the factors we feel they look at closely when assessing monetary policy setting. We will update this weekly, but if there is anything you feel we have missed then reach out.
By Chris Weston
Sat 2 Nov 2019 17:11:12 GMT