The lower real rate is supporting the NAS100
Source: www.tradingview.com
The real risk rate influences the risk market. The lower the real rate, the less pressure on risk assets. I.e. the opportunity cost of taking a risk-on position is diminished. The top chart shows the real rate below its 21-day moving average - approximately a trading month's average. The bottom chart shows FXCM's NAS100 - its Nasdaq index CFD - trading above its 21-day moving average. Their respective crossovers synchronised at the red dashed vertical on 13 July. Lower real rates may incentivise the market to continue to bid on risk.
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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