We also had record low interest rates, this year, especially with the BoE. I do not expect it to rise any time soon, and I don’t believe I’m alone with this opinion. This does not seem friendly for carry trade environments as far as major pairs are concerned. The logic here is that it should make it easier for companies to access capital, but the drawback is that economies will have more zombie companies. But that is 2021’s problem. (Pushing problems to 2021 seems to be among the parting macro themes 2020!)
This year we gradually checked off macro themes, the one that will make it through to the next year is COVID-19. Food for thought: roughly this time last year, many people were optimistic that COVID would be gone when there were no vaccine developments. Now, they that there is a vaccine in place, there is pessimism! The pessimism is good; you need pessimism/negative sentiment to profit!
It seems we saw a Santa Claus rally with equities on the back of the vaccine optimism (on the US side); we’ll see if the January effect cements this which should set the tone for the start of 2021.
Hopefully 2021 brings us all new trading opportunities, Happy New Year!
Want to see what is expected for 2021? Click here.
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