Volatility - the best choice in an environment of rising interest rates? (1)

The Fed raised the interest rate in March for the third time since the financial crisis. After better-than-expected data on employment and unemployment in the US last week, expectations for at least two more interest rates in the world's largest economy have grown.
Is the question of what to invest in high interest rates?
Experts recall that the initial reaction of investors is up, with increased interest rates, in the year after their first increase. This has already been observed. Subsequently, however, and at higher interest rates, markets are declining in response to the normalization of interest rates.

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Vote for Christian, from Bulgaria

Europe's still heavy breathing after France

The upward momentum of the middle of the week proved to be insufficient to move the markets a bit higher and the main European exchanges ended the trade in red on Thursday:
The European Stoxx Europe 600 closed with a loss of 0.52% to 394.39 or a decline of 2.06 points.
The German DAX30 recorded the most swan-diving decline in the main European indices - -0.36%, closing at 12711.06. With the largest decline in stock prices, were the companies Prosiebensat 1 Media AG (-5.95%), Deutsche Post AG (-3.40%) and Heidelbergcement AG (-2.73%).
The French CAC40 halted its growth and declined by 0.32%, closing at 5383.42.

The British Central Bank kept its key interest rate

The Bank of England did not change its monetary policy and left its key interest rate unchanged at a record low of 0.25%, which was expected given that Prime Minister Teresa May has scheduled a surprising parliamentary election on June 8, and a change in monetary policy would be very unexpected. This would negatively affect the markets.

Meanwhile, at a press conference, Mike Carney said that British households should expect a tough year.

For the 2017 and 2019 the Central Bank raised its forecasts.

ECB - Eurozone unemployment is higher than official data shows

In its report, the bank explains the discrepancy between the sharp drop in unemployment and the weak rise in wages, with the unemployment figure excluding some people who do not meet the strict statistical criteria. After adjustments, unemployment in the euro area is 15%, which is well above official figures at 9.5%.
Well, Hello!
Maybe the statistic should change their measuring criteria, 'cause official figures don't match for long time with the reality, which makes them, at least, useless?

The prospects for the dollar till the end of the year (2)

In addition, it should be noted that tensions between the US and China may begin to increase, not only in connection with potential military conflicts (given the fact that North Korea is entering China's sphere of influence), but also as a consequence of purely economic wars that can be developed, following Trump's policy.
Traditionally, the dollar shows signs of strength when geopolitical tensions grow. The main reserve currency is preferred by the investors as a shelter. Still, if other currencies, such as the Swiss franc and the yen, are not more preferred than the dollar, we still have to see...

The prospects for the dollar till the end of the year (1)

Fed has raised interest rates for the third time since the financial crisis in March, and it is very likely that we will see two new increases in interest rates by the end of the year. If, of course, the US economy, the labor market and inflation are presented as expected. And this will most likely continue to be so...
What, however, has to excite investors in dollars, is if these expectations are set in the price of US dollar relative to other major currencies.
In addition, the Fed has already announced its plans to reduce its record balance, which will be another factor supporting the US currency.
The key to investors will be the evolution of geopolitical events. Deepening tensions between the United States and Russia in connection with the situation in Syria, as well as between the United States and North Korea, and the United States and China, will be other important topics for "green money".

The prospects for the yen till the end of the year

The environment can be defined as ideal for the Japanese yen. On the one hand, geopolitical uncertainty and the potential growing demand for yen are as a result of it and, on the other hand is the Japanese Central Bank's "tied hands", in background of Trump's efforts to devalue the dollar.
It has been rare in history that the US president has openly spoke that his country's currency is expensive, as we have already seen from Donald Trump. In this aspect, Trump would not hesitate to condemn the intervention of the Japanese bank and this is probably a well-known fact for everyone.
We can not ignore the forecasts of the former Japanese finance minister, in the face of Eisuke Sakakibara, also known as Mr. Yen, who has been warning since mid-last year that the dollar is heading for 100 yen. Sakakibara confirmed his position again this year.

The prospects for the pound till the end of the year

The pound will most likely be the most volatile currency among the major ones. We have seen how the situation for the British currency can be radically different with every day and every statement of a major state functionary.
Uncertainty over the British currency is serious, and it will most likely continue to be preferred by hyper-speculators, as well as being avoided by investors who want more clarity about the direction of movement.
There are early elections in the country, which, however, are perceived as positive by market participants. We have already seen how one of the most bearish currency analysts, in the face of Deutsche Bank, has changed its expectations for the pound.

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