Key Themes for Next Half of the Year – Introduction
The first half of the year has been tough for investors but fun for traders as the amount of volatility has been good for them. For the first time in many years, the CBOE volatility index rose to more than 40 which is a good measure of the amount of fear that traders are having. In this article, I will look at the top themes traders should look at for the remaining part of the year.
Central Bankers are very important in the global financial system. They control the amount of money supply and also play a role in controlling the rate of inflation. When inflation rises, they can easily contain it by hiking interest rates. They can also do other things like quantitative easing to stabilize the economy. This part of the year, traders will wait for the Federal Reserve and see whether it will do the two more hikes it proposed. They will also look at the European Central Bank (ECB) and see whether the bank will continue unwinding its post-crisis quantitative easing.
Traders will also look at the mid-term elections. In these elections, several members of congress and senate will be on the ballot. Democrats hope that the outrage to Trump’s policies will mean more turnout for them. On the other hand, republicans believe that the popularity of Donald Trump and the support of his policies will attract more voters to the ballot. If democrats win, it could mean more opposition to Trump’s policies.
Robert Mueller started investigating Trump in July last year. To date, he has prosecuted a number of his officials with his former campaign chairman being in jail. There is a likelihood that Robert Mueller will release his report this half of the year. If he does so, there is a likelihood that it could have major implications to the president and the republicans in the congress.
The United States announced that it would exit the Iran deal. Just last week, the Trump administration announced that all companies with deals in Iran should wind them up before November. In recent weeks, major protests have happened in the country. There is a likelihood that the recent unrests could continue. This will lead to higher prices as the supply from a major country are slashed.
This has been a key theme this year. In this part of the year, the trade war could continue and accelerate. Even with criticism from his party, Trump has continued to press on with his threats for a trade war. Experts believe that Trump will do all he can to end the globalist agenda that has been around for decades.
The yield curve that has been narrowing in recent days will be another source of concern for traders. A yield curve inversion would be so dangerous for the financial markets. In the past, all the major financial crisis have happened before the yield curve inversion.
Many cryptocurrency projects have gone burst this year. Cryptocurrencies have been at a bear territory for months. This means that this half will be a make or break for them. If they continue to decline as they have, it could mean that many holders will dump them this year.
Angela Merkel has been a key figure in global politics. Three months ago, she entered into a coalition with the Bavarian Christian Social Union. Now, this union is breaking as the two parties differ on the immigration issues. In this part of the year, traders will be looking out for the developments in the country.
Key Themes for Next Half of the Year – UsefulTips