The pandemic has thrust traders into volatile times yet again.
With the outlook for interest rates hotly debated, cryptocurrencies yo-yoing, as well as cost and liquidity challenges to watch out for, Financial News has turned to top executives at CME Group, the futures exchange operator, to try and decode what it all means for markets.
Paul Houston, global head of FX products, and Tim McCourt, global head of equity index and alternative products, try to pin down what 2022 will bring.
Interest rates will be uncertain
Houston: Given the current uncertain interest rate environment, the interest rate differential between two currencies becomes critical for any clients trading FX forwards or FX swaps. These differentials combine with overarching supply and demand forces from the marketplace to help determine the price at which customers can trade.
So called ‘flights to quality’ and holding ‘safe haven’ currencies can be strong factors in setting the overall price within the FX market, and this may be a key area of focus in 2022 as the pandemic evolves.
Given the largely…
