Volatility – Lost Worlds http://lost-worlds.com/ Fri, 14 Jan 2022 14:28:00 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://lost-worlds.com/wp-content/uploads/2021/05/cropped-icon-32x32.png Volatility – Lost Worlds http://lost-worlds.com/ 32 32 Rising Treasury yields may portend volatility in coming months https://lost-worlds.com/rising-treasury-yields-may-portend-volatility-in-coming-months/ Fri, 14 Jan 2022 14:28:00 +0000 https://lost-worlds.com/rising-treasury-yields-may-portend-volatility-in-coming-months/

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Yields on US Treasuries have started the year off sharply as investors face the possibility that the US Federal Reserve will not just embark on an accelerated cycle of rate hikes, but also advance the timetable for begin to reduce the size of its balance sheet.

As the Fed and other central banks prepare to tighten monetary policy to combat lingering signs of inflation, just as the spread of the omicron variant of COVID-19 produces further economic disruption, we expect that financial markets are experiencing heightened volatility in the first quarter of 2022.

Given the progress of this economic cycle and the market’s heightened sensitivity to incoming data as the Fed prepares to withdraw its stimulus, PIMCO advocates an agile approach and prefers investments at the upper end of the spectrum. liquidity. We also favor underweight duration or market exposure to US interest rates.

Central banks take center stage

US 10-year yields hit their highest level in two years to start 2022, climbing to around 1.79% from 1.51% at the end of 2021. The yield curve, which represents the difference between the Short-term and long-term bond yields flattened as investors raised expectations for the Fed and other central banks to raise near-term policy rates.

The moves came as the Fed released the minutes of its December policy meeting last week which further underscored the central bank’s recent hawkish turn in the face of economic data showing continued strength in inflation and inflation. wage growth.

At that meeting, officials laid out their forecast for rate hikes, with the median projection showing three increases in 2022, three more in 2023 and two in 2024. The Fed also doubled the pace of tapering its purchase program of assets, which is ongoing. track to end in mid-March.

Other major central banks have also recently changed course. In December, the Bank of England unexpectedly raised its key rate to 0.25% from 0.10% to tackle lingering inflationary risks, while the European Central Bank announced it would cut its own asset purchase program.

Minutes showed that the Fed also discussed a timeline to potentially begin its balance sheet runoff. That’s when the Fed will no longer reinvest proceeds from maturing Treasuries and mortgage-backed securities it purchased under its quantitative easing (QE) program. The minutes say officials are focused on inflationary risks and see the labor market nearing levels the Fed considers peak employment.

Outlook calls for volatility

The latest monthly US jobs data, released last week, provided further evidence of the forces likely to accelerate policy tightening. The report showed strong hourly earnings and an unemployment rate that fell to just 3.9%, numbers that appear to support the likelihood of the Fed’s first rate hike in March. In this case, a balance sheet reduction announcement could come as early as the middle of the year, in our view.

Data this week showed the consumer price index rose 7% year-on-year in December, the fastest annual pace in nearly 40 years. This was broadly in line with economists’ forecasts and market expectations. 10-year US Treasury yields fell slightly after the report.

The prospect of higher rates and a rollback of central bank bond-buying programs — known as quantitative tightening, or QT — is rippling through financial markets. The Treasury Inflation-Protected Securities (TIPS) break-even rate, which measures the difference between nominal and inflation-adjusted returns, fell late last week amid concerns about the potential QT and the increase in TIPS issuance planned for 2022.

Despite the possibility of increased volatility, we believe that 2022 can provide an attractive opportunity set for investors positioned to take advantage of macro and relative value opportunities when they arise. We also expect active duration management to become a more important driver of investment returns than in the past.


All investments contain risks and may lose value. Sovereign securities are usually backed by the issuing government. Obligations of US government agencies and authorities are backed to varying degrees, but generally are not backed by the full confidence of the US government. Portfolios that invest in such securities are not guaranteed and their value will fluctuate. Inflation-linked bonds (ILB) issued by a government are fixed income securities whose principal value is periodically adjusted according to the rate of inflation; ILBs lose value when real interest rates rise. Treasury Inflation-Protected Securities (TIPS) are ILBs issued by the US government.

US Federal Reserve (Fed)

Statements regarding financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work in all market conditions or are suitable for all investors and each investor should assess their ability to invest for the long term, particularly during periods of market decline. Outlook and strategies are subject to change without notice.

PIMCO in general provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. This material contains the opinions of the author and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered investment advice or a recommendation of any particular security, strategy or investment product. The information contained herein was obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a registered trademark of Allianz Asset Management of America LP in the United States and throughout the world. ©2022, PIMCO.

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Editor’s note: The summary bullet points for this article were chosen by the Seeking Alpha editors.

Harvest Finance offers yield farming (for some) but volatility (for all) https://lost-worlds.com/harvest-finance-offers-yield-farming-for-some-but-volatility-for-all/ Wed, 12 Jan 2022 18:21:10 +0000 https://lost-worlds.com/harvest-finance-offers-yield-farming-for-some-but-volatility-for-all/

In order to understand Harvest Finance (CCC:FARM-USD) understand yield farming.

Source: Max_555 / Shutterstock.com

I’ll get to that in a moment, but first it’s important to understand why the token ranked # 453 in total is even on your radar in the first place. The answer to this is that Harvest Finance rose massively on December 27th.

It went from around $ 100 to $ 250 briefly in the space of a day. I can’t find a definitive explanation as to why this happened, but it does. FARM-USD is now trading around $ 140. So that aside, let’s get back to what it really is.

Yield farming with crop funding

According to its website, “Harvest is an international cooperative of humble farmers pooling their resources in order to obtain returns from decentralized finance (DeFi). When farmers deposit, Harvest automatically grows the highest yields with those deposits using the latest farming techniques.

If that sounds a bit like lending money to make money, it should. In order to earn returns on your crypto, you need to do exactly what you would do with your money: lock it in and give it to others.

Just like you lend money to a bank for a nominal return, the same can be done with crypto. Locking in crypto is called “staking”. Here’s the really interesting thing about staking:

Since Yield Farming began in 2020, Yield Farmers have achieved returns in the form of Annual Percentage Yields (APYs) of up to triple digits. But this potential return comes with a high risk, with protocols and coins earned subject to extreme volatility and sweepstakes in which developers abandon a project and run away with investor funds.

Therefore, it is very clear that quick returns are possible with this strategy. And given that FARM-USD has risen so significantly recently, people will be interested.

Harvest financing and yield farming issues

There is also a very large legal asterisk regarding yield farming and harvest financing. Currently, according to the Harvest Finance website, “due to regulatory uncertainty, Harvest is not available to individuals or businesses residing in the United States.”

Put simply, investors based in the United States cannot directly use Harvest’s yield farming platform and must purchase FARM-USD tokens through an exchange like Coinbase (NASDAQ:PIECE OF MONEY).

And there is certainly some regulatory uncertainty around yield farming as the Securities and Exchange Commission (SEC) has begun to focus on this relatively new practice.

So what is the real benefit of Harvest Finance other than a potential rapid appreciation?

Automation is the key

Investors who invest their capital in Harvest Finance do so in part because it automates yield farming.

One way to cultivate is to do it manually. I’m not talking about planting real crops, but rather cultivating yields. However, both forms were once manual. Fortunately, advancements in technology have made the process of planting and harvesting crops much more efficient and profitable. The same is true for yield farming.

Manual yield farming is tedious because you need to identify the best place to invest your crypto. It is also expensive because it is subject to high gasoline charges. Harvest Finance automates the process of agricultural production on what it calls farms. There are over 100 of them he’s looking for returns.

How it works?

Let’s say Harvest generates a return. In this case, 70% of the returns are returned to the deposit pool. The remaining 30% becomes FARM-USD tokens to reward those who bet in the first place, among other things.

It is also interesting – if I understand correctly – from the point of view of the offer. It currently has an outstanding supply of 877,230 tokens but a total supply of only 690,420 tokens.

The website refers to this total as greater than four years. So, if I understand correctly, it means that the supply will decrease in the future. Theoretically, this should increase the value of all current tokens in the future.

What to do with crop financing

To be honest, I don’t know much about yield farming. The premise is not that different from the interest in today’s banking world. The mechanisms, like the legal aspects, differ, but this makes sense at one level.

The thing that gives me pause for thought is that there is a dark side to the rapid returns that users have recently experienced with FARM-USD: volatility.

Over the past year, Harvest Finance cost $ 410 and $ 40. He went up and down again and again.

In addition to the risks here, Harvest Finance has already been hacked once last year and it could happen again.

Dip your toes if yield farming interests you, but beware of the many risks.

On low cap and low volume cryptocurrencies: InvestorPlace does not regularly post reviews on cryptocurrencies with a market cap of less than $ 100 million or of a volume of less than $ 100,000 every day. This is because these “penny cryptos” are frequently the playground for crooks and market manipulators. When we post a comment on low volume crypto that may be affected by our comment, we request that InvestorPlace.comThe editors of s are disclosing this fact and warning readers of the risks. 
Read more: How to Avoid Popular Cryptocurrency Scams

As of the publication date, Alex Sirois does not have (directly or indirectly) any position in any of the titles mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.

Alex Sirois is an independent contributor to InvestorPlace whose personal equity investing style focuses on long-term, buy and hold stock selections that create wealth. Having worked in multiple industries, from ecommerce to translation to education and using his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

Financials drop as volatility shakes markets – Financials Roundup https://lost-worlds.com/financials-drop-as-volatility-shakes-markets-financials-roundup/ Mon, 10 Jan 2022 22:03:00 +0000 https://lost-worlds.com/financials-drop-as-volatility-shakes-markets-financials-roundup/

Shares of banks and other financial institutions fell as volatility continued to rock global markets.

A spike in Treasury yields persisted, with the 10-year T-bill yield hitting 1.779%, building on its biggest weekly gain since 2019 last week. Rising yields are generally positive for the banking industry, but such sudden shifts destabilize markets and hurt financial firms.

“The markets are entering a stricter political regime which historically has resulted in lower returns and more uncertainty in the index,” strategists at brokerage Morgan Stanley said in a statement. note to customers.

US investment firm Cerberus Capital Management sells part of its stakes in Deutsche Bank and Commerzbank, after years of disappointing stock market performance among German lenders.

The Securities and Exchange Commission is preparing to impose more transparency on large private companies, as regulators worry about the lack of oversight of private fundraising that has fueled their rise.


Write to Rob Curran at rob.curran@dowjones.com

(END) Dow Jones Newswires

January 10, 2022 17:03 ET (22:03 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.

Why New Years mayhem may signal a more balanced — but volatile — stock market in 2022 as investors grapple with a hawkish Fed https://lost-worlds.com/why-new-years-mayhem-may-signal-a-more-balanced-but-volatile-stock-market-in-2022-as-investors-grapple-with-a-hawkish-fed/ Sat, 08 Jan 2022 14:46:00 +0000 https://lost-worlds.com/why-new-years-mayhem-may-signal-a-more-balanced-but-volatile-stock-market-in-2022-as-investors-grapple-with-a-hawkish-fed/ Santa Claus had barely hung up his boots after delivering his eponymous rally to good small stock investors, when all hell broke loose.

The market swung sharply last week as investors rang the bell in the first week of trading in 2022, and market watchers pointed to the prospect of greater volatility as they grappled with it. the ability of the Federal Reserve to fight inflation without pushing the economy into recession.

“I think the markets are trying to determine how aggressive the Fed will be in removing accommodation and tightening and whether it will eventually make a policy error,” said Ed Keon, chief investment strategist at QMA, during ‘a telephone interview.

The release of the minutes of the Federal Reserve’s December 14-15 policy meeting on Wednesday fueled uncertainty. They revealed that policymakers discussed being more aggressive in raising rates than expected and raised the possibility of starting to shrink the size of the Fed’s balance sheet faster than they did when they did. they ended a previous round of quantitative easing spurred by the financial crisis.

This fueled a massive sell-off in the bond market which saw the performance of the 10-year T-bill TMUBMUSD10Y,
jump of more than 27 basis points, or 0.27 percentage point, over the past week, the largest such increase since September 2019. At 1.769%, the rate is the highest since January 17, 2020 .

Before the minutes, the Dow Jones Industrial Average DJIA,
and had risen 2.4% in the last five trading days of 2021 and the first two of 2022 – the stretch that defines the so-called Santa rally. For the Dow Jones, this is the strongest increase in the seasonal phenomenon since 2008-09, when it increased by more than 6%. The S&P 500 SPX,
won 1.4% thanks to St. Nick, his strongest such race since 2012-13.

But the surge in yields did not favor tech stocks and other rate-sensitive growth stocks, which had already started to suffer last month. The highly technical Nasdaq Composite COMP,
had completely missed the Santa Claus rally, down 0.2%. On Wednesday, he lost more than 3% for his worst one-day performance since February.

Valuations of growing companies are based on expected long-term cash flows. Higher interest rates mean that money is not as valuable as it was when rates were lower.

The Dow and S&P 500 also suffered, and the three major indexes ended the week with losses, although the Dow and S&P 500 remain just 1.5% and 2.5% of the record highs set respectively. January 4 and 3. Crypto traders also appeared shaken by the minutes, with bitcoin BTCUSD,
sliding to a three-month low, leaving the world’s largest digital asset with its worst start to a calendar year since 2014.

Value stocks beat their growth counterparts in the first week of 2022, extending the outperformance seen in December. The Russell 1000 Value RLV Index,
+ 0.23%
rose 0.8% over the past week, while the Russell 1000 Growth RLG Index,
fell 4.8%, according to FactSet data. In December, the Russell 1000 Value Index climbed 6.1%, for its biggest monthly gain since November 2020, to overtake the 2.1% advance of the Russell 1000 Growth.

Read: Value stocks have led growth in recent weeks. Is it a false head?

At the sector level, technology fell 4.7% over the past week, while high-value cyclical sectors surged, noted Brian Levitt, global markets strategist at Invesco. Financials jumped 5.6%, while energy jumped more than 10%. And the defensive consumer staples sector managed to rise about 0.4%.

That doesn’t mean investors should rush to chase rotation, he said in a note.

“Basically we are seeing the Fed pulling the brakes, guiding interest rates up and flattening the yield curve to contain an overheating US economy. Against this backdrop, we believe it is too early to turn to cyclical, high value-added stocks, which would likely require a steepening of the yield curve and an economic re-acceleration, ”said Levitt.

In the absence of an economic recession, now is also probably not the right time for investors to focus on defensive stock sectors, he said, as they are unlikely to significantly outperform until. at the end of the current market cycle.

QMA’s Keon doesn’t expect the Fed to do too much, but warns that this is a sizable risk as policymakers grapple with the inflationary consequences of a $ 5 fiscal stimulus. Trillion dollars and the central bank’s own aggressive actions on the monetary policy front.

Shifting from an environment of flowing liquidity to one in which policymakers turn off the taps and drain liquidity does not preclude positive returns for stocks and other risky assets, he said, but it does. You don’t have to be bold to expect more moderate gains after the S&P 500 posted annual price increases of 28.9% in 2019, 16.3% in 2020 and 26.9% in 2021.

For his part, Keon expects inflation to ease as supply chain bottlenecks ease. Economic growth could hiccup in the first quarter due to the omicron variant, improving in the second quarter as investors wait to determine what is sustainable for the end of 2022-2023.

Rising yields aren’t necessarily negative for stocks – after all, a stronger economy should lead to higher rates – but they are a stronger relative headwind for growth stocks. Keon said he didn’t expect value to “crush” growth in the coming year, but that the stage might be set for a more “balanced” market, rather than a market. marked by narrow leadership.

A much smaller than expected increase in non-farm payrolls on Friday did nothing to ease the upward pressure on yields, with investors instead focusing on an unemployment rate that unexpectedly fell to 3. 9% vs. 4.2%, while average hourly earnings showed a sharp increase.

“A 4.7% gain in annual hourly earnings, coupled with a drop in the unemployment rate to a new pandemic low of 3.9%, is a clear sign of a tight labor market if ever there is one, and likely give the Fed a slight green for monetary tightening, ”said Seemah Shah, chief strategist at Principal Global Investors, in comments sent via email.

See: Traders, little discouraged by disappointing job gains in December, continue to anticipate an “increasingly rapid” tightening by the Federal Reserve

The December jobs report “is not going to dampen bond yields, and the payroll figures are not strong enough to reassure markets about a very strong economy,” Shah wrote. “The stock markets are on the line for a volatile month.”

The coming week, meanwhile, is expected to fuel volatility, with the economic calendar showing December’s consumer price index reading Wednesday, December’s producer price index on Thursday, and December’s retail sales. and the latest reading from the University of Michigan Consumer Sentiment Survey. Friday.

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Late buying helps the market end in positive territory after intraday volatility; oil and gas stocks record their gains https://lost-worlds.com/late-buying-helps-the-market-end-in-positive-territory-after-intraday-volatility-oil-and-gas-stocks-record-their-gains/ Fri, 07 Jan 2022 10:23:23 +0000 https://lost-worlds.com/late-buying-helps-the-market-end-in-positive-territory-after-intraday-volatility-oil-and-gas-stocks-record-their-gains/

Stock indices closed positively after a volatile session. It was a volatile day after a positive opening index hit an intraday high at the 17,905 level, but showed a reserve of earnings from a higher level as an intraday low at 17,704 levels. , 55 and managed to close the session at the 17,812.70 level with a gain of 66.80 points. While Bank Nifty closed the session at the 37739.60 level with a gain of 249.35 points.

At the close, the Sensex was up 142.81 points or 0.24% to 59,744.65. Nifty gained 66.80 points or 0.38% to 17,812.70. About 1,910 shares rose, 1,235 shares fell and 78 shares are unchanged.

At the sector level, sales were observed in automotive, capital goods and pharmaceuticals stocks, while purchases were seen in banks, FMCGs, IT and petroleum and the gas. Stocks like Grasim, ONGC, Hindalco and Shree Cements were the main winners. M&M, BAJAJFINSV, BAJFINANCE & LT were the main laggards.

Palak Kothari, Research Associate, Choice Broking, said: “Technically, the index traded with a higher and lower formation on a weekly chart as well as an open marubozu candlestick which suggests a rally. on the rise in the counter. a four hour chart index has formed a sort of hammer candlestick pattern which adds bullish momentum for the sessions to come. Additionally, the index traded above 21 & 50-HMA, suggesting strength in the meter. However, a MACD momentum indicator trades with a positive cross over the daily period. Right now the index has support at 17,500 levels while resistance is at 18,000 levels, a cross above the same level may show 18,200 to 18,300 levels. On the other hand, Bank Nifty has support at 36,800 levels while resistance at 38,300 levels. “

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Posted on: Friday January 07, 2022, 3:53 PM IST Source link

Ripple’s XRP starts 2022 on a slow note amid a lack of volatility and fundamentals https://lost-worlds.com/ripples-xrp-starts-2022-on-a-slow-note-amid-a-lack-of-volatility-and-fundamentals/ Mon, 03 Jan 2022 05:47:37 +0000 https://lost-worlds.com/ripples-xrp-starts-2022-on-a-slow-note-amid-a-lack-of-volatility-and-fundamentals/

Ripple’s XRP remains broadly stable at the start of Monday’s session, as the broader crypto market trades in the red with buyers staying on the sidelines due to bearish moves in major Bitcoin and Ethereum coins. At the time of writing, XRP / USD is trading at around $ 0.847.

With several traders staying out of the market during the year-end holidays and a lack of significant fundamental drivers, the eighth largest cryptocurrency hasn’t seen much price action in recent sessions. Additionally, a mixed outlook on its outlook for the year also left the few traders still in the market confused as to its direction and what to expect from Ripple’s XRP.

While the main driver of price action in crypto XRP is the result of the SEC vs. Ripple case this year, several other factors may be contributing to its movements as well. For example, a recent report from Arcane Research predicts that Ripple’s cryptocurrency could drop from the top 10 this year as new altcoins gain attention and experience meteoric growth in the coming months. This forecast shook investor confidence to some extent, dragging Ripple’s XRP below the $ 0.90 level last week.

Meanwhile, the new year has started with Ripple releasing one billion XRP coins from escrow and into the ODL corridor, an automatic transfer designed by its developers. The move not only supports XRP liquidity in crypto exchanges, but is also essential to cover operational expenses faced by the company.

Meanwhile, attorney Jeremy Hogan has indicated that he hopes the Ripple v SEC lawsuit could be resolved in favor of the company by April 2022. He predicts that the case is highly unlikely to be extend until the summer of this year. Ending the lawsuit could result in bullish moves in the XRP token, especially if it ends in a win for Ripple.

XRP / USD technical analysis

Technical analysis of the H4 price chart of XRP / USD reveals a bearish bias among most of the moving averages as well as the momentum indicator. However, the MACD also suggests some interest among buyers.


Ripple’s XRP is trading below the pivot point at $ 0.87, although the immediate support at 0.78 is working effectively for now. A build-up of selling pressure could see this level tested while a slight increase in the number of buyers could see XRP breaking through the PP soon.

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Secondary market investors hit by high volatility in 2021 – myRepublica https://lost-worlds.com/secondary-market-investors-hit-by-high-volatility-in-2021-myrepublica/ Sat, 01 Jan 2022 11:56:37 +0000 https://lost-worlds.com/secondary-market-investors-hit-by-high-volatility-in-2021-myrepublica/

KATMANDU, January 1: The Nepal Stock Exchange (Nepse) observed high volatility in 2021, with the market observing a wide range of fluctuations in its various indices throughout the year.

The country’s only stock exchange gained 437.23 points on all trades last year. On January 3, the first trading day of 2021, Nepse opened at 2,087.27 points while on Wednesday, the last day of the year, the secondary market closed at 2,524.50 points.

Over the period, the secondary market reached a high of 3,227 points in August, but it could not be maintained for long and the market successively fell to 2,255 points in December. The amount of single-day sales reached 21.647 billion rupees on August 15, while the market cap was also valued at 4,406 billion rupees at its daily high. After a drop in stock prices, the market capitalization fell to Rs 3.567 billion when the market closed on the last day of the year.

With a growing attraction to the country’s stock market, the number of mat account holders has reached around 4.7 million, up from just 1.5 million in the past year. It also shows a notable increase in the mobilization of private sector capital.

According to a stockbroker, the market surged in the early days of the year due to investor attractiveness to online trading due to the foreclosure and the impacts of the coronavirus. “However, soaring interest rates, the liquidity crisis in the banking system, the effects of the presidents of regulators’ involvement in insider trading and the delay in renewing these positions have all affected sentiment. investors lately, “the broker said on condition of anonymity.

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Decrease in energy, but strong increase over the year, in a context of volatile commodity prices https://lost-worlds.com/decrease-in-energy-but-strong-increase-over-the-year-in-a-context-of-volatile-commodity-prices/ Thu, 30 Dec 2021 21:30:02 +0000 https://lost-worlds.com/decrease-in-energy-but-strong-increase-over-the-year-in-a-context-of-volatile-commodity-prices/

Shares of energy companies edged down but remained strong for the year after a mixed performance for energy commodities.

SPDR Select Energy exchange-traded fund, which tracks the Standard & Poor’s 500 energy sector group, rose around 46% in 2021, one of the biggest gains on record for a notoriously volatile industry .

Less than 18 months ago, the price of oil fell below zero in New York futures trading. Oil futures closed 2021 at just under $ 77 a barrel, completing a scorching run with seven straight sessions of gains.

Natural gas futures, which have entered a downtrend in recent months after surging earlier in the year, tumbled again in the last trading session of 2021.

Gas futures fell 7% to $ 3.60 per million British thermal units on Thursday as hopes faded that the onset of winter conditions in parts of the United States would stimulate demand. Recent snowstorms have concentrated in sparsely populated areas in the west, including the Sierra Nevada, while urban centers in the northeast still experience a relatively mild winter.

The meeting scheduled for Thursday between President Biden and Russian President Vladimir Putin is part of a pressure tactic the Russian leader is using to try to redraw post-Cold War arrangements in Europe, analysts told The Wall. Street Journal.

Write to Rob Curran at rob.curran@dowjones.com

(END) Dow Jones Newswires

30-12-21 1629ET

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Mortgage rates drop as Omicron variant triggers market volatility https://lost-worlds.com/mortgage-rates-drop-as-omicron-variant-triggers-market-volatility/ Thu, 23 Dec 2021 16:42:41 +0000 https://lost-worlds.com/mortgage-rates-drop-as-omicron-variant-triggers-market-volatility/

Buyers who froze mortgage rates this week got a bit of a break as they continued to run to get ahead of upcoming long-term rate hikes.

The average rate on a 30-year mortgage fell to 3.05%, down 7 basis points from the week before, according to Freddie Mac’s latest survey of lenders.

“Market volatility resulting from the COVID-19 Omicron variant is driving mortgage rates down,” Sam Khater, chief economist at Freddie Mac, said in a statement. “As the year draws to a close, the housing market is progressing steadily. However, rates are expected to increase in 2022, which will impact buyer demand as well as refinancing activity. “

For the week ending December 23, Freddie Mac’s Weekly Primary Mortgage Market Survey reported average rates for the following loan types:

  • For 30-year fixed rate mortgages, rates were on average 3.05% with an average of 0.7 points, down from 3.12% last week, but well above the 2.66% mark of it a year ago. 30-year loan rates hit an all-time low of 2.65% in the week ending Jan. 7, 2021, according to records dating back to 1971.
  • Rates for 15-year fixed rate mortgages averaging 2.30 percent with an average of 0.7 points, down from 2.34 percent last week and above its level of 2.19 percent a year ago. The lowest 15-year loan rate was 2.10%, set the week ending August 5, 2021, according to records dating back to 1991.
  • For 5-year Treasury-indexed variable-rate hybrid mortgage (ARM), rates were on average 2.37% with an average of 0.4 points, down from its rate of 2.45% last week and remaining well below the rate of 2.79% from a year ago. 5-year ARM loan rates are still hovering above the all-time high of 2.40% set during the week ending August 5, 2021.

The survey results reflect the rates for borrowers with excellent credit who put 20 percent on a home. The average rate also takes into account average points of call. Borrowers with lower scores or different point assumptions can expect different rates.

The fall in mortgage rates follows a general upward trend that saw 30-year loan rates drop from less than 2.9% before Thanksgiving to their current levels today.

But the outlook for even higher rates has kept buyers in the hunt for homes in recent weeks, according to George Ratiu, director of economic research for realtor.com.

“The combination of rising inflation and the accelerating reduction in purchases of mortgage-backed securities by the Federal Reserve is expected to push up interest rates in 2022, thereby squeezing the budgets of many buyers,” said Ratiu in a statement. “Weekly data from Realtor.com shows prices accelerating in December as new listings slow, a likely result as many homeowners are delaying their sales plans until after the holidays.”

The reduction in the Federal Reserve’s monthly support to the U.S. economy picked up speed last week, as officials pledged to step up the pace of the reduction.

The results of Freddie Mac’s investigation were the first to be released since the Fed decided to speed up the process, and since the Omicron variant of the coronavirus really started to gain momentum in the United States.

Despite the disruption caused by Omicron, however, Fed officials appear to be more concerned about the threats that consumer price inflation poses to the economy as it recovers from the financial impacts of the pandemic.

As the economy continues to emerge from the hole, today’s still low mortgage rates should be a thing of the past.

National Association of Realtors chief economist Lawrence Yun predicts the 30-year fixed mortgage rate will be around 3.7% by the end of 2022, and Mortgage Bankers Association figures forecast also an upward change in the coming months.

Email Daniel Houston

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The Turkish Lira Is So Crazy Now That Even Notoriously Volatile Cryptocurrencies Look Safe | Currency News | Financial and business news https://lost-worlds.com/the-turkish-lira-is-so-crazy-now-that-even-notoriously-volatile-cryptocurrencies-look-safe-currency-news-financial-and-business-news/ Tue, 21 Dec 2021 20:05:26 +0000 https://lost-worlds.com/the-turkish-lira-is-so-crazy-now-that-even-notoriously-volatile-cryptocurrencies-look-safe-currency-news-financial-and-business-news/
Invoices in Turkish liras.

  • Turks are turning to cryptocurrencies to avoid the volatility of the pound.
  • Daily cryptocurrency trading topped one million per day, according to a Reuters report.
  • The Turkish lira fell 40% against the US dollar amid falling interest rates and high inflation.

As the Turkish Lira collapses, cryptocurrency trading increases.

Turkey’s crypto transaction tally topped one million a day, a level not seen since the pound’s first big drop this year in March, when the country’s central bank chief was suddenly replaced, according to a Reuters report. .

After this initial spike, crypto trading eventually fell below 500,000 transactions per day. Then the volatility of the Turkish Lira hit again recently, and daily crypto exchanges rebounded to one million, according to the report, citing data from Chainalysis and Kaiko. The data also shows that bitcoin and tether have been the main crypto exchanges in Turkey since 2019.

Turkey’s central bank announced another interest rate cut last week – following a series of previous cuts – that caused the lira’s value to fall against the US dollar, CNBC reported. President Recep Tayyip Erdogan, who called the high interest rates “bad,” pressured the central bank to oppose conventional economic wisdom on inflation, which stands at 21% in Turkey, CNBC said.

So far this year, the value of the pound has fallen 40% against the greenback, exacerbating the country’s inflation. This pushed the Turks into the volatile but rising cryptocurrency market. Reuters said Turks have often looked to gold or US dollars to protect themselves from the lira, but the cryptocurrency gains have now caught their attention.

Bitcoin has grown 65% year-to-date and the crypto market as a whole has passed the $ 1,000 billion valuation mark.

Even with the bull run, the market is still in the throes of volatility. Bitcoin, for example, hit a record high of $ 69,000 last month and is now hovering below $ 50,000.

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