People who trade forex with Finbok get the best information on big market opportunities and will discover how to trade the forex market like a pro.
Market Update: Resilience in Corporate Credit Markets
As to corporate credit markets, they have rallied in recent weeks, shrugging off equity-market volatility, and even some of the lowest-rated companies have been able to issue new debt at attractive prices, which is a vote of investor confidence for the economic outlook.
The market for so-called junk credit is sending a similarly sanguine signal about the economy – junk credit has often served as a canary in the coal mine for the economy and recessions, but it is showing little fear at present.
The consensus seems to be that the economy is headed for a ‘soft landing’. This view suggests that the recent equity-market volatility has been more a matter of a correction for overvalued tech stocks than a fundamental economic concern.
Meanwhile, defaults are dropping. Deutsche Bank recently reported that defaults on junk bonds have fallen to their lowest level in almost a year. Consistent with these data points, yield spreads have been steadily declining and high-yield bonds have outperformed investment-grade bonds this year.
Corporate management is also extending its debt maturities: companies have raised record amounts of debt this year, with most of the proceeds going toward refinancing existing debt.
US Economic Resilience Amidst Volatility
In spite of the volatility in equity markets just over a week ago, corporate credit markets remain resilient, as investors put wider economic problems out of their minds and buy even the weakest bonds.
You’d expect junk credit to be the first to show signs of economic trouble. A slowdown should force companies to default, cut jobs and trigger bankruptcies. But with no signs of panic, investors are in agreement that the economy is heading for a ‘soft landing’. Recent volatility in stock markets applies more to corrections of overvalued tech stocks than to fundamental economic problems.
Deutsche Bank on Default Rates
Deutsche Bank also reports that, after a brief spike, default rates for high-yield bonds have now dropped to their lowest point in nearly a year, with a 12-month trailing default rate of 3.1%.
Even the weakest of the junk bonds, those rated ‘CCC’, has also seen a steady decline in defaults, falling to its lowest level since July of last year.
That still-unimpressive 3.1% default rate is well below the 4% average default rate over the past four decades but still somewhat above the 2.9% average of the past century, according to data collected by Schroders.
Yield Spreads and Market Performance
Yield spreads – the premium that US junk bonds pay over equivalent Treasury securities—are near two-year lows.
They sit at 353 basis points, nearly 100 basis points below the levels this time last year. Spreads on the ‘B’ and ‘BB’ rated splinter groups are at their lowest levels since the financial crisis 15 years ago. Junk bonds are outpacing the higher-rated investment-grade debt this year and market demand and optimism are solid.
Refinancing and Debt Management
The ‘wall’ of maturing debt, which investors had expected to hit next year, now looks manageable: many companies are refinancing their debt schedules The issuance of high-yield debt has reached $176 billion this year, 78% more than this time last year.
The market continues to swallow up this issuance with ease, and it isn’t solely because high-yield debt offers a high return; there is also a dearth of new high-yield supply.
‘Overall,’ write the BlackRock analysts, ‘a large amount of high-yield debt has been issued in 2015, but most has been to refinance existing debt as opposed to raising new capital’.
Strategic Debt Issuance
This trend was also noted by Amanda Lynam and Dominique Bly at BlackRock, who noted that management teams are ‘compounding, extending maturities out to late 2025 and 2026 in order to forestall potential fundraising challenges towards the end of this year and around a US election’.
They added: ‘This further protects liquidity and stability amid potential market volatility.
Trade Forex With Confidence: Key Strategies and Opportunities
Trading forex is great when you do it right, and you will not do it right by throwing your money at the first piece of advice you get.
This blog post will be your guide to some of the best forex trading strategies and market opportunities on the forex market.
Whether you’re an experienced trader who wants to sharpen his skills, or a novice looking to improve his trading experience, this piece will give you the edge you need to trade forex like a champ.
Trade Forex With Understanding Market Dynamics
A good comprehension of the fundamental principles of forex market dynamics is an obvious starting point for all who want to be successful forex traders.
The forex market is a sensitive creature that is affected by an abundance of factors: economic data, political decisions, and events, as well as market sentiment.
All these factors have to be carefully monitored in order to be able to anticipate the market moves adequately.
Trade Forex by Analyzing Economic Indicators
Economic indicators are the bread and butter of a forex trader, so make sure you know what they mean and how to interpret them.
When you understand these indicators, you can see where a currency is headed and then buy or sell at the right times. Some of the most important indicators are: GDP growth rates: this is a key indicator of a country’s economic output.
It is usually given as a percentage figure and shows in what proportion the economy is growing or shrinking. GDP growth rates are released every quarter. Employment data: another important figure is the number of people working in a country, as it reflects the demand for currency.
Employment data is published monthly. Inflation rates: when the price of goods and services rises, the value of a currency goes down, so it’s important to pay attention to inflation rates.
These are also published every month.
Trade Forex Using Technical Analysis
Technical analysis is the analysis of past data of the market such as charts, trends and patterns to predict future price movements, all in hope of finding good trading opportunities, amidst the noise.
Using various tools such as moving averages, RSI and MACD can help you become a better forex trader.
Trade Forex With Risk Management Strategies
Risk management is a vital aspect of forex trading. A simple strategy is to use stop-loss orders, keep leverage moderate, and if possible, diversify your trades to minimize total loss. With good risk management, forex can be a rewarding and long-term profitable business.
Trade Forex by Staying Informed on Global Events
Events in the global economy can have a profound effect on the forex market.
When there is a political upheaval, a natural disaster, or a new economic policy, there is sometimes a sudden shift in currency values.
Knowing what’s happening in the global economy will let you trade forex more effectively because you’ll be more adept at anticipating the market reactions to world events.
Trade Forex Through a Reliable Broker
When choosing a forex broker, it is important that one selects one that offers the lowest spread, has a user-friendly trading platform, offers excellent customer service, and provides free education that will help novices improve their trading skills.
Trade Forex With a Clear Trading Plan
A defined trading plan will put on paper your trading objectives, strategies, and risk controls, as well as your entry, exit and positioning criteria.
Knowing exactly what to do before you actually trade will keep you focused and disciplined.
Trade Forex by Learning From the Experts
By learning from seasoned traders, you can acquire essential knowledge about forex upfront, where you can join trading forums, watch webinars read books by successful professional traders, and learn how to trade forex like a professional.
Trade Forex With Patience and Discipline
The keys to a successful forex trading career are patience and discipline. Resist trading on impulse, because emotions and the noise from the market can mislead you.
Stick to your trading plan and be patient until the right trading opportunities show up.
Trade Forex by Utilizing Automated Trading Systems
Automated systems can help you to make trades in the forex market more effectively. These systems are programmed to analyze the market data from various sources.
Once the criteria to execute a trade is formed by the program, it automatically places trade. Forex trading can be quite risky.
By using automated systems, you can reduce the margin of error.
Trade Forex Amidst Economic Changes
The forex market moves quickly, so you have to keep up with it. For example, what kind of impact does the Federal Reserve’s plan to raise interest rates have on the dollar? What about changes in trade agreements between the US and China?
And how does the ongoing conflict between Russia and Ukraine affect the currencies of those countries, and the rest of the world? Forex trading can be a lucrative but volatile activity. Keeping track of you develop new strategies to turn excess supply into profitable demand.
Trade Forex With Finbok’s Expert Insights
Finbok is brimming with tools, market analysis, education materials and real-time trading signals to assist you with your forex trading.
Take your trading strategy to the next level with Forex Trade Copier, and use Finbok’s knowledge base to achieve your financial goals!
So that you can trade forex like a professional and become a successful trader, rely on your knowledge, analytical skills, and ability to manage risks.
Stay up to date with the market, use technical analysis in your trading decisions, and stick to your trading plan. Learn from professional traders, be patient, disciplined and leverage automated trading systems to optimise your trading opportunities.
If you are interested in trading forex, it is time to try it!
And if you don’t know where to start, visit Finbok to get all the information you need to start trading and generate income.
