Tickmill UK Daily Market Notes

[tickmill-news]

Gold: All Signs of a Profit-booking Move
Since mid-July, bullish bets on Gold started to resemble mania or hasty shift to safe haven in anticipation of some disaster. The rally seemed well-founded, but more recently, an irrational buying spree was also felt. For example, from July 17 to August 6, only one daily candle was down and the past high from 2013 (~ $ 1920) was overcome relatively easily.

Gold crossing through $2000 level at ease created impression that it targets $2,500, $3,000 and even $ 4,000 per troy ounce. Bearing that in mind, it was difficult to trade countertrend. For the same reason, it was difficult to estimate the level from which correction would begin. Now, after the pullback has occurred, we have the opportunity to discuss whether it is an interim correction or the signal of global U-turn which in my view is a better trading opportunity.

Among potential factors explaining 5% downside move in gold was a surge in Treasury yields (direct rivals of Gold in investment portfolios), increased optimism related to the development of Covid-19 vaccine, economic news, new details on the US fiscal deal, etc. Let’s go through the points.

The yield on 10-year bonds hit 0.5% on August 6, from which it began to rise and reached 0.67% on Wednesday. Around the same moment, the decline in gold began which suggests that gold’s decline is related to Treasuries’ move. However, as we can see from recent history, there were larger in amplitude fluctuations in treasury yields which caused smaller decline in gold:

It is fair to say that the liquidation of gold positions in March was also exacerbated by liquidity crunch. But if we consider June spike in yields which is larger than current one, gold’s reaction was relatively muted.

We can look at the connection between gold and the Treasury market from a slightly different angle. Gold has high correlation with TIPS (inflation-indexed Treasury bonds) – both are hedges against inflation, only for different time horizons. So, if we assume that some shift in inflation expectations was a factor in the correction, then TIPS should have corrected as well – however, the move in TIPS yield was much weaker:

It turns out that with such a sluggish move in the “peer” asset, the fall in gold can be explained either by the fact that mainly long-term inflation expectations were sharply revised or a shift in inflationary expectations was not the main explanatory factor.

There are absolutely no signs of U-turn in Fed’s accommodative policy, since the Central Bank made it clear that until 2022 there won’t be any steps towards normalization (famous “we don’t even think about thinking of raising rates”) and if there will be changes, then only in the direction of further policy easing & balance sheet expansion.

On August 7, the NFP was released, which posted modest surprise in jobs count however, the effect of the report on the market quickly fizzled out. It’s unlikely that jobs report could cause some profound shift in expectations.

As a result, one likely explanation of the sharp decline in gold is a technical correction (profit taking move) which, taking into account gold’s position at historical peak, turned into avalanche of sales, exacerbated by momentum selling from algos. Fundamentally, expectations for Gold remain the same, since as we can see, key factors of the rally remain in place.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 76% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

 

[tickmill-news]

US Retail Sales and U. Michigan Consumer Data may Drive USD lower
Commodity markets started Friday on a weaker footing. There is a noticeable tilt to the downside in silver as high volatility should persist after falling almost 16% on Tuesday. Gold futures are also under slight pressure, but buying interest is expected to remain strong. Sales in commodity markets are occurring despite USD scratching intention to move out of the range, testing resistance near 94 level on Wednesday, as there were no strong disturbances in the news background on the night from Thursday to Friday.

It is important to point out that the risk of failure of US fiscal deal looms on the horizon although it is still low. Despite that there is perception that markets may be greatly unprepared to that outcome. Although the news background is full of reports that talks are under way, it has been two weeks since the expiration of major federal aid programs, and there are still no concrete details.

The data on claims for unemployment benefits indicated a sharp decline in the inflow of unemployed – minus 263K compared to the previous week. This is a direct consequence of the cut in weekly unemployment payments from $600 to $200 per week, which made unemployment so “unpopular”.

The data on industrial production in China indicated continuing struggle – YoY rebound in July came at 4.8% against the forecast of 5.1%. This is the “Chinese signal” that the recovery is slowing down. Retail sales continued their slide which is even more frustrating since lots of hope is pinned to its rebound. Retail sales decreased by 1.1% YoY in July. Weak data on the largest Asian economy has sobered the markets today.

Another piece of highly important economic release is the US July retail sales. They are important because fiscal negotiations are likely to be sensitive to the data clarifying recovery path. The data on job creation and unemployment rate released last week signaled that fiscal&post-lockdown economic impetus in the US was likely extended to July. Retail sales are expected to confirm this assumption. In my view, retail sales below consensus will strengthen market risk-on and press USD lower as strong confirmation of fading upturn will increase pressure on Republicans and Democrats and help to find a middle ground faster. At the same time, positive surprise will allow the process to be delayed further. However, the odds of a negative deviation in the retail sales report, in my opinion, is somewhat less than 50%.

The report on consumer confidence and inflation expectations from U. Michigan can hit US Dollar.

Why the data is on the market radar? The point is that if the report indicates an acceleration of inflation expectations above 3.0%, given the Fed’s stance, which does not even think about raising rates, real yields in the US will again be under pressure. For stocks, this will mean more upside, sales for USD and, of course, renewed interest for gold.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 76% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

 

[tickmill-news]

Positive Eco Data Extends State of Suspense
It’s a relatively calm Monday for the FX market. Yield on 10-year T-Note which caught the markets’ attention last week saw reduced pressure on Monday, trimming gains. Treasuries were under great pressure last week causing yields to rise from 0.5% to 0.7%, the highest level since the end of June. Gold exhibited some weakness last week as well but saw renewed interest on Monday, rising half a percent.

The context of the new trading week, namely continued state of suspense, has been determined to some extent by positive US reports released last Friday. US consumer spending continued to rise strongly in July, showed July retail sales report. Sales exceeded the level of February, the last “healthy” month before coronacrisis hit world economy. Consumer sentiment also remained consistently high.

However, this is not good enough. It is clear that both Republicans and Democrats have a goal of maximizing political gain from the new round of fiscal aid ahead of the elections. This goal ensures long negotiations and intense search of trade-offs. It is the positive data on the US economy that allows negotiators to gain precious time and necessary economic stability. The latter does not allow politicians to be accused of inaction, since the data continues to indicate an ongoing recovery.

On a monthly basis, retail sales rose 1.2% in July against the forecasted 2.1%. Monthly growth in June was revised upwards from 7.5% to 8.4%. In monetary terms, the volume of sales in July exceeded the level of February by 1.6%, i.e. climbed out of the crisis pit. Sales in the “control group” of goods (which excludes goods with volatile prices, allows better identification of consumer trends by excluding goods with low elasticity of income), rose 1.4%. This is more than the 0.8% forecast.

However, there is hardening perception that next phase of recovery will be full of pain without proper action. Consumer confidence began to decline in July which is in line with stalling recovery in consumer spending which hit a plateau. In early August, consumer spending began to decline, clearly reflecting the end of the income insurance program

Source:tracktherecovery.org

There are also more solid signals of slowing recovery. Shifts in oil’s futures curve hints that world stockpiles are not declining as quickly as we would like. The difference in price (spread) between the nearest contract and the contract of the next month reached 50 cents a barrel, the highest level since May. Recall that we had a deep contango (i.e. widening positive timespreads) in May which was associated with surplus of reserves. As we see that spreads started to widen again this indicates that oil demand is not recovering as quickly as previously thought. This was also reflected in the IEA and OPEC reports released last week, according to which the agencies revised down their forecasts for oil demand for 2020 and 2021. With the rise in prices, US oil production is growing which is reflected in the latest US data.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 76% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

 

[tickmill-news]

USD: Extreme Shorts are not the Reason for U-turn
The main trading theme in the FX market on Tuesday became the wake-up of dormant USD sell-off, which was a foreseeable development due to the presence of medium to long-term bearish USD macro factors. The only question was when the downward trend would resume. As it turned out, the pause in talks on new fiscal package failed to support greenback.

Basically, when we talk about fresh round of fiscal support, less uncertainty in negotiations on the new fiscal deal also means less uncertainty in the plans of government borrowing, i.e. growth of supply on the Treasuries market and possibly money supply (if the Fed resumes purchases to absorb the supply). For now, it seems that the risk of negotiations put on hold would increase uncertainty about bond supply and cause steeper pullback in T-bonds seems premature.

Accordingly, contrary to my expectations, short positions in Gold were routed earlier and the precious metal went into offensive. Demand returned to the Treasuries market as well. The 10-year Treasury yield appears to have completed its pullback from the last week (after hitting key support at 0.5%) and the trend resumption seems to be finding support and appeal among investors. This allows us to assume that the momentum in assets-safe heavens may be extended to the rest of this week. The rise in risk-free assets, coupled with lull in the stock market (i.e. risky assets), means that roots of the current trend are in the expectations for a new round of borrowing of the US government and corresponding expansionary policy of the Fed.

The CFTC data on USD from August 11 (the latest report) showed that bearish sentiment on USD is one the rise despite extreme positioning. On the contrary, the main opponent, the euro, saw increasing long positions. The net speculative positioning in euro reached 28% of open interest, which is slightly below the previous peak of 30%, which was observed in April 2018. EURUSD was 1.24-1.25 back then, but then turned into a nosedive, which lasted until March of this year.

Weighted by G-10 currencies, the net position on USD declined to -15% of open interest, below October 2017 and is moving to the lows of 2012-2013:

So, from historical perspective USD is significantly oversold, but now, as we understand, there are completely different expectations for the path of expansion of the money supply in the US, therefore, it will hardly be possible to break the trend due to the presence of some extreme positioning.

USD positions were also shaken by mortgage and manufacturing data from the US, released earlier. Negative surprises prepare for a weak August and possible Fed interventions in the fall.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 76% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

 

[tickmill-news]

US Fiscal Talks Steer Towards Frugality Risking to cap T-bond Gains
So, here we go. Some Democrats and GOP members are no longer convinced that the economy needs a large fiscal aid package, a senior White House official told Reuters on Tuesday.

According to the official, there are signs of growing bipartisan bias towards frugality, both in the House of Representatives and in Congress, when it comes to discussing the size of the aid. It can be now reduced to $500 billion which is at least twice less than discussed before. The way how the government will spend may be less stimulating in terms of consumer spending boost since the funds are expected to be directed to financing US Postal Service and payroll loans for small and medium-sized businesses. It means that stimulus checks and extended unemployment benefits, which significantly spurred consumer spending in May-July, may not be included in the new package.

As we discussed earlier, stalling progress in fiscal talks increase the risk of markets being wrong in pricing in the final size and timing of the deal. With new details from the US administration official, the likelihood of this outcome increased.

Why should investors be bothered about that? Let’s explore the chain of the effects.

Firstly, size of the fiscal package has a direct bearing on how much the government would need to borrow. It is clear that more spending means more borrowing and vice versa. The level and intensity of borrowing will determine the flow of a large portion of bond supply to the Treasury market and it is not known whether the market will be able to absorb it without the help of the Fed.

Therefore, bond-buying plans of the Fed may depend on how actively the government would need to tap the Treasury market. Open market operations of the Fed have direct impact on the flow of liquidity in the banking system (bank reserves) and increase of money stock. Expectations of aggressive bond-buying (in case of large fiscal package) may ignite concerns about expansionary monetary policy what means rising pressure on real yield as well as supply of USD which have direct implications for risk assets (bonds vs. stocks story) and USD exchange rate (greenback supply/demand story).

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 76% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

 

[tickmill-news]

Fed’s “Revision of monetary policy strategy” – what is this?
The biggest piece of market moving data released on Wednesday was the Minutes of the July Fed meeting, which included some surprising points. For example, committee members were concerned about the side effects of yield curve targeting, thus significantly reducing probability that the Fed starts to control medium and long-term rates in September. Equity sell-off and some gains in USD that we saw on Wednesday are basically revision of the odds of this outcome towards zero.

According to the Minutes, FOMC members felt it necessary to provide more clarity on the path of Federal Funds rate. Of course, this is a reference to the so-called “Revision of monetary policy strategy”, which the Fed has been talking about for several months. As part of the current strategy, the Fed communicates its intentions in such a way that it retains some degree of uncertainty. If we think about underlying principles of this strategy, we can draw some interesting conclusions about propagation of policy changes in markets and economy.

Suppose the Fed, based on all available information about the current and future state of economy, decides that it makes sense to raise interest rate at the next meeting. At the same time, it communicates this intention to the public at the current meeting. Clearly, market players will price in the future hike immediately possibly causing divergence of the markets (and economy) from the state expected by the Fed during the next meeting. At the time when the Fed actually hikes the rate, it affects the economy which may be in completely different state and impact of the rate hike may be completely different from expectations of the Fed. In other words, “full openness” policy leads to systematic bias in the Fed expectations about the impact from policy decisions. It seems that the Fed needs to “systematically mislead market participants” but do it smartly to make policy changes effective in boosting output and make correct expectations about the impact of its decisions.

However, due to lack of success of the current policy framework in stimulating inflation, the Fed wants to revise its policy in such a way as to tie its decisions to specific economic outcomes – raising inflation to n%, lowering unemployment to t%, or upon reaching some combination of inflation and unemployment. … In other words, markets can be confident that policy changes will not occur, at least until the economic outcome is realized. In this case, the Fed will still retain uncertainty in its decisions but only after the economic parameters reach some predetermined values.

Lack of enthusiasm in the plans for YCC disappointed the markets a little since after the last meeting and bearish comments from the officials the markets had been actively pricing in this outcome in September.

 

[tickmill-news]

EURUSD: Weak August PMIs Increase Chances of a Sell-off
Minutes of the ECB July meeting, released on Thursday, showed that the central bank has little understanding of what lies ahead for the European economy. The word uncertainty (i.e. unquantifiable likelihood of future events) were mentioned in the minutes as many as 20 times. Perhaps this is a record.

It is no coincidence that the ECB tried to speak about why it is important to distinguish between recovery and rebound. EU economy is experiencing some kind of pickup and the central bank wants to make sure that market participants and economic agents understand its characteristics. A rebound can gain momentum, but it is natural to expect that the rebound sooner or later runs out of steam. In contrast, economic recovery is self-sustained process which can be interrupted only by a shock of some kind. To put it in another way, the ECB doubts that the economic growth we saw in the summer is the beginning of a new expansionary phase of the cycle.

And indeed, it didn’t take long to see first confirmations of these concerns. On Friday we’ve got first signs of a slack in ongoing rebound on the side of mfg./non-mfg. PMIs:

Manufacturing and combined manufacturing/non-manufacturing activity in the Eurozone came lower than expected in August. Euro was sold aggressively on the news, which gives us a useful insight – slowing EU recovery may be heavily underpriced in EURUSD because of excessive focus on USD side:

The minutes also showed that positive economic projections from July were based on the fact that strong support from the monetary policy will remain in place. According to the ECB, normalizing policy too early would be like pulling out a lifeline for drowning, which indicates a reluctance to move the rate in the next year or two.

There were also hawkish moments in the protocol. For example, ECB mentioned that the size of asset buybacks under the pandemic asset buyback program (PEPP) should be viewed as an upper bound, not a target. In addition, according to the ECB, economic reports in recent months have been more surprising in a positive way than in a negative one, and some of the risks that the ECB was concerned about in June have lost their urgency.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 76% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

 

[tickmill-news]

Two Big Rules of the Bearish USD Trend
Fatigue is growing in the upward trend of EURUSD, which became rather apparent on Friday, when the release of PMI data provoked sustained sell-off in the pair. The index of activity in the EU non-manufacturing sector showed that almost “mechanical” post-lockdown recovery is losing steam and at best enters plateau.

In the analysis of PMI data, it may be helpful to focus on how deviation of actual reading from the forecast changed in time to see how it corresponds with the story of consumer spending impulse. For example, in the August report, we see that PMI reading in the services sector lagged far behind the forecast (50.1 points against the forecast of 54.5 points).

In May and June, it was the other way around – the actual values were significantly ahead of the forecasts. This dynamic suggests there is a rise and fading of some impulse (most likely in consumption), which is reflected in respective acceleration and subsequent slowdown in the services sector activity.

Sustained economic momentum in the EU in the first months after lockdown period mixed with less dovish (compared to the Fed) ECB served as a driver for euro advance for some time, but now this factor is gradually fading away.

On Monday, USD came under strong pressure on news that Trump is interested in accelerated approval of vaccines, including foreign-made ones. Such a move, undoubtedly, has a political motive, but this does not negate the fact that it may approach the date of vaccination in the US. However, exploring new lows in USD, in my opinion, will be possible if two conditions are met:

1. US data will continue to point on sustained economic momentum
2. The Fed will retain dovish tone or sound more bearish.

If we look closely at the conditions under which the dollar declined in June-July, we can notice that positive economic surprises (i.e. momentum) were combined with expectations of aggressive easing by the Fed. However, in August, the minutes of the Fed meeting in July showed that the central bank, if it continues easing, will be less aggressive than expected. On the data side, we started to see some signs of weakness in the US economic data. Therefore, in my opinion, it becomes much more difficult for USD to make its way to new lows, as the factor of declining real yield weakens. The Jackson Hole symposium, which will take place as an online conference on Thursday, at which Jeremy Powell will have to outline the updated guidelines of the Fed in shaping monetary policy, will clarify a lot in this sense.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 76% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

 

[tickmill-news]

A Few Remarks on Yesterday’s Powell Speech
Well, yesterday the Fed, represented by its head Jeremy Powell, formally confirmed that it adjusts reaction function to changes in inflation. Whereas previously the Fed used to target specific rate of inflation (2%), new framework implies average inflation targeting.

The decision was widely expected, but I would like to make a few remarks about why that was necessary and how it could affect expectations on tentative dates of policy normalization.

According to the Fed’s report entitled “Review of The Monetary Policy “, the decision is based on the fact that the US is entering a “new normal”, which is characterized by the following observations:

• Productivity (output per worker) continues to decline, and the population is aging.
• The hypothetical neutral interest rate (at which GDP and inflation grow at a stable rate) is decreasing which implies that you need less interest rate hikes to get to the desired level.
• Increasing the workforce (i.e. the level of labor force participation) should become a priority. By the way, the last decade of monetary stimulus was able to inflate many nominal indicators and raise some real indicators, but it was the LFPR that mysteriously remained at low levels, and drifted even lower during the pandemic:

The crucial importance of LFPR in driving inflation can be demonstrated with the following hypothetical example: Suppose unemployment level is 0% which is associated with extreme economy overheating and thus inflation. If LFPR is low, for example 30%, only 30% of the working population will get paid and feed inflation through spending. In this case, contrary of our expectation of high inflation, we may barely see its move towards a target level.

• A related issue with point 3 is that jobless rate sufficient to generate desired level of inflation decreases over time. Unemployment of 4% now and 10 years ago are clearly different in terms of potential to create inflation pressures.

Now let’s discuss the Powell speech.

The first thing that sticks out is extremely vague definitions. “Moderate” inflation overshoot over 2%, “period” during which inflation will average 2% … What does “moderate” mean in quantitative terms? When this very “period” will start, when it should end – all this remained unclear. According to Powell himself, there won’t be “mathematical formula”, everything will be very flexible (i.e. at the discretion of the Fed). The new framework is clearly a progress towards greater flexibility. We didn’t get nothing concrete except for the strong feeling that in the next 6+ years the rates will be likely near zero. But why? Firstly, from June FOMC projections we know that for the next three years, Central Bank officials expect the interest rate to stay at current level, and Core PCE below 2%:

Second, if we recall how long inflation stayed above 2% in the last decade after massive easing and fiscal stimulus…

… we can conjecture that pursuing average inflation of 2% without additional stimulus may require quite wide period which extends beyond 2030.

Hence, the bond market reaction to the Powell speech was mainly concentrated at the far end of the yield curve – the yield on long bonds rose, as the risks of increased inflation in the longer term increased. In the closer parts of the yield curve, there was less news from the speech, so the reaction wasn’t so strong.

The main conclusion from Powell’s speech is that rates will remain at a low level for a longer time. It is a key ingredient in further, sustained declines in US real yields, a powerful driver of USD depreciation and Gold gains that have already shown its potential this year.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 76% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

 

[tickmill-news]

Fed’s Mester: Rising Corporate Profits in 3Q Doesn’t Mean Recession is Behind
Economic activity and hiring have been constrained during coronavirus outbreak, confirming that the recovery will be slow and economy will need more support from monetary and fiscal authorities, Cleveland Federal Reserve Bank chief Loretta Mester said on Friday.

“I really think the recovery will be slow,” Mester told CNBC.

The economic data is likely to point to third-quarter growth after companies resume operations, but that doesn’t mean the economy is no longer in danger, Mester said.

“I actually think there are more challenges ahead and we will have to support the economy to overcome them,” she added.

Powell speech on Thursday indicated that the Fed becomes increasingly inclined to hold rates near zero bound for a very long time to generate inflation above 2% for some time. This inflation risk spooked investors in long-term bonds as well as fuelled speculations that the Fed will make additional easing of monetary conditions in the coming months. USD is expected to remain under pressure next week because of these expectations.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 76% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.