Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
The global financial markets are far removed from the animal kingdom. Yet, we can’t escape from the bulls, bears, hawks and doves whenever we discuss how market directions and monetary policies shape trillion-dollar decisions.
Some pivotal moments in the history of financial markets illustrate the spirit of these creatures, like these four examples:
1. Hawk – The Volcker Shock (1979 -1987)
A fine example of a hawkish monetary policy in action is the Volcker Shock. Under Chair Paul Volcker, the Federal Reserve raised interest rates to 20% to crush runaway inflation. This decision prioritised price stability over growth, even at the cost of a recession.
2. Doves – The Global Financial Crisis Response (2008)
Central banks worldwide slashed rates to near-zero and unleashed quantitative easing, epitomising dovish policy to revive collapsing markets.
3. Bulls – The Dot-Com Bubble (1995 – 2000)
Nasdaq’s 582% surge, driven by irrational exuberance for tech stocks, symbolised bullish sentiment at its peak.
4. Bears – The 2022 Market Meltdown
As inflation fears gripped investors, the S&P 500 plunged 25%, Bitcoin lost 65%, and bond markets suffered their worst year in history- a stark reminder of bearish despair.
Where Do Bulls, Bears, Hawks, and Doves Come From?
These terms are more than just metaphors.
They’re rooted in history, folklore, and the visceral behaviours of the creatures they represent. Let’s unpack their origins.
Bulls And Bears: Clashing Beasts Of The Market
The bull and bear dichotomy dates back to 18th-century London. The terms likely originated from two sources:
Animal Combat: Bull-baiting, a brutal sport where dogs attacked bulls, was popular in Elizabethan England. Spectators likened market rallies to a bull charging upward (thrusting its horns) and downturns to a bear swiping downward (as if clawing prey).
Bearskin Jobbers: Early stock traders who sold shares they didn’t yet own (short-selling) were called ‘bearskin jobbers’, referencing the proverb ‘don’t sell the bear’s skin before you’ve caught the bear.’ Bulls emerged as their optimistic counterparts, buying aggressively in anticipation of rising prices.
Hawks And Doves: Political Birds Take Flight
The avian metaphors for monetary policy emerged from 20th-century US politics:
Hawks: In the 1960s, the term was borrowed from Cold War debates, where ‘war hawks’ advocated aggressive military action. Economists repurposed it to describe policymakers prioritising inflation control over growth. Hawks favour higher interest rates to ‘prey’ on inflation, even if it risks economic pain, akin to Paul Volcker’s 1980s crusade.
Doves: Conversely, doves entered the lexicon during the Vietnam War, describing politicians favouring diplomacy over conflict. Central bankers dubbed ‘doves’ focus on nurturing growth and employment, often keeping rates low despite inflation risks.
The terms gained traction in the 1970s as central banking shifted toward transparency. Fed meeting minutes from 1976 first used ‘hawkish’ to describe anti-inflation stances, while ‘dovish’ appeared in media by the 1980s.
Why Do These Metaphors Endure?
These terms persist because they viscerally capture abstract concepts:
Bulls and bears evoke primal forces of greed and fear.
Hawks and doves simplify wonky policy debates into a clash of instincts (attack vs. protect).
They also reflect humanity’s timeless habit of explaining the unknown through nature – a tradition as old as Wall Street.
Trade Your Way, Regardless Of Which Creature Rules The Markets
It doesn’t matter if the bulls are thrusting their horns up or the bears are swiping down with their paws. Or if the hawks are soaring higher than the doves.
With the right strategy and market understanding, anyone can take advantage of the market conditions to generate worthwhile returns.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
The USDJPY is declining as risk aversion grows, with stock markets facing pressure and bond yields decreasing. The 10-year yield has fallen by 5 basis points, while the 2-year yield decreased by 5.7 basis points.
Equity markets are also weakening, with the NASDAQ down by 1.63% and the S&P 500 declining by 1.23%. On the technical side, USDJPY has dropped below a significant swing area between 147.21 and 147.34, with the next key support identified at the 61.8% retracement level from September’s rally, positioned at 146.94. A sustained movement below this level may suggest a more negative technical outlook.
The decline in USDJPY reflects a growing sense of caution in financial markets. Investors typically move towards safer assets when uncertainty rises, and we see that happening now. Stock markets are under pressure, and at the same time, bond yields are falling. Lower yields indicate stronger demand for bonds, which often corresponds with a risk-off approach from investors. The 10-year yield is down by 5 basis points, while the more short-term focused 2-year yield has fallen slightly more, showing a 5.7 basis point decrease.
Equities are feeling the strain as well. The NASDAQ, which leans towards technology stocks, has dropped by 1.63%, while the S&P 500 is lower by 1.23%. Selling pressure continues to be apparent, and if this persists, it could reinforce the broader aversion to risk.
From a technical perspective, USDJPY has now moved below an area that previously acted as support between 147.21 and 147.34. This signals growing weakness, as failure to hold above these levels suggests sellers are gaining control. The next line to watch is the 61.8% retracement from September’s rally, located at 146.94. Given how widely followed this retracement level is among market participants, a breach below it could trigger further downside movement.
If downward momentum strengthens, we may see additional technical selling from traders who rely on these key levels for their strategies. This kind of positioning can create sharper movements, particularly if broader risk sentiment remains weak. On the other hand, if buyers step in around current levels, there may be an effort to stabilise price action. However, that would largely depend on whether broader market conditions allow for it.
For now, the tone in financial markets remains cautious. The reaction in stocks and bonds underscores this, and the technical break in USDJPY aligns with that sentiment. If this trend continues, it would not be surprising to see more defensive positioning across asset classes.
Stocks are experiencing a downturn, with the NASDAQ declining by 196.47 points (1.09%) to a level of 17,872. The S&P 500 has decreased by 53.5 points (0.94%), now at 5,685.
The S&P 500 is moving further away from its 200-day moving average of 5,732.70. The NASDAQ is set to close below its 50-week moving average for the first time since March 2023.
This decline marks the NASDAQ’s third consecutive weekly decrease, down 5.15% this week. The S&P 500 has also recorded three weeks of consecutive losses, currently down 4.61%.
Market Momentum Shift
These declines highlight a change in momentum. Markets do not move in straight lines, but patterns emerge when volatility increases, and recent weeks have demonstrated that. The NASDAQ breaking below its 50-week moving average signifies more than a temporary pullback. Since March 2023, buyers have defended this level, suggesting that sentiment has shifted. A breach of this kind often encourages further selling, as traders who previously relied on this as an entry point begin to exit.
The S&P 500 distancing itself from its 200-day moving average reinforces the lack of buying strength. This isn’t a minor fluctuation—it extends a pattern of sellers pressuring prices lower. When major indices repeatedly fail to hold key technical thresholds, the argument for a short-term recovery weakens.
Weekly trends matter. A single red week can be dismissed as normal market action, but three in a row suggest larger forces at play. The NASDAQ’s 5.15% drop this week is not an isolated occurrence. The S&P 500’s 4.61% loss mirrors that weakness, further emphasizing that downward pressure is widespread.
We must also pay attention to volume. A decline supported by higher-than-normal trading activity signals conviction behind the move. If institutions are reducing exposure, rallies may struggle. If volume is lacking, the selling could be less durable. Understanding this distinction helps avoid reacting too soon.
Sentiment alone does not dictate market direction. Interest rates, economic data, and corporate earnings cannot be ignored. Market participants anticipating a rebound must ask what has changed. Buying after notable declines is common, but without a shift in the factors driving the sell-off, such attempts can be premature.
Key Support Levels
Watching how indices behave around support levels can provide clarity. A recovery that lacks momentum may only serve as a temporary pause before further declines. Conversely, a sharp move upward with strong participation could indicate renewed confidence.
There is no single factor determining where prices will settle, but patterns, volume, and external catalysts all shape expectations. The next few weeks will determine whether this is a passing dip or something deeper.
ECB’s Centeno stated that the economy is nearing the end of the current inflationary cycle. He confirmed that rate cuts will persist until inflation reaches the designated target.
The ECB’s latest projections indicate headline inflation at 2.3% for 2025, 1.9% for 2026, and 2.0% for 2027. The increase for 2025 is attributed to stronger energy price movements.
Inflation Forecast Breakdown
Excluding energy and food, inflation forecasts are 2.2% for 2025, 2.0% for 2026, and 1.9% for 2027. The current average remains above the CPI target of 2.0%, so convergence has not yet been achieved.
Centeno’s remarks suggest the European Central Bank will continue lowering rates for the foreseeable future. Policy adjustments will aim to bring inflation in line with the target, though this process may take several years. Recent predictions reflect this, with inflation not expected to hit 2% consistently until 2026.
Fresh estimates for next year show inflation slightly above this level, primarily due to movements in energy markets. This means external cost pressures are still playing a role, which could introduce some volatility. However, when excluding energy and food, projections are lower, meaning underlying trends may be moving in the desired direction. That being said, numbers remain marginally off target, reinforcing why rate reductions are set to continue.
Policy Adjustments And Market Reactions
For traders analysing price movements, expectations around policy shifts remain clear. If projections hold, rate adjustments will follow a path aimed at achieving price stability. While current levels suggest inflation is moderating, the ECB has made it clear that policy will stay accommodative until full convergence occurs.
Understanding these shifts allows for better positioning in the weeks ahead. Inflation expectations set by the ECB establish a framework for possible rate decisions, influencing how markets react. By paying close attention to how actual inflation progresses relative to forecasts, any deviations in pricing trends can present new opportunities.
Policymakers have not indicated any abrupt changes, so adjustments will likely be gradual. The pace depends on how quickly inflation aligns with targets. Given that energy prices remain unpredictable, this element must be factored into short-term expectations. While broader trends suggest a downward trajectory, external factors mean vigilance is still required.
Russian President Putin stated he is prepared to agree on a truce in Ukraine, subject to certain conditions. This offer was made during discussions last month in Saudi Arabia between senior Russian and American officials.
An agreement on halting hostilities will rely on a clear understanding of the principles that will underpin the final peace accord. Russia will focus on defining the parameters of any mission, including which nations will take part.
Impact On Oil Prices
Following this announcement, oil prices fell, currently trading at $67.19, having previously reached a high of $68.20 before declining.
This statement from Putin means Russia is open to ending the conflict, but only if specific terms are met. The mention of a final peace accord suggests that Moscow aims to shape how any agreement is structured, particularly regarding international involvement. Discussions in Saudi Arabia indicate that negotiations are happening, although details remain scarce.
Market response was immediate. Oil prices took a downward turn, reflecting traders’ expectations that reduced geopolitical tensions could ease supply concerns. Prices had climbed to $68.20 but later dropped to $67.19, showing a shift in sentiment as traders reassessed risks. The decline suggests that prior gains were, at least in part, driven by uncertainty around future conflict-related disruptions.
For those navigating price movements, this should highlight how political decisions can swiftly alter positions. If peace talks gain momentum or concrete steps are taken towards an agreement, further movement in commodities is likely. Conversely, any setback could trigger sharp reversals. With new developments appearing at short notice, maintaining awareness of diplomatic shifts will be necessary.
Broader Financial Reactions
Beyond energy markets, broader financial instruments could react as well. Currency pairs connected to oil-exporting economies may exhibit heightened volatility. Meanwhile, bonds and equities sensitive to risk sentiment could move depending on whether tensions ease or escalate. Monitoring official statements, rather than relying solely on initial headlines, will be essential for understanding how events are likely to unfold.
Federal Reserve President John Williams stated there are no indications of inflation expectations becoming unsettled. He noted that these expectations have returned to pre-pandemic levels.
Additionally, Williams pointed out that data reflects short-term inflation expectations similar to those prior to the inflation surge. He refrained from discussing monetary policy or the economic outlook during his speech.
Inflation Expectations Remain Stable
Williams has made it clear that inflation expectations remain stable, returning to where they were before the pandemic disrupted economic conditions. This is a critical point. If expectations had shown signs of drifting upward, it could have indicated deeper inflationary pressures that might require a more forceful response from policymakers. Instead, Williams conveyed that both short-term and long-term inflation expectations are in line with historical norms.
This stability suggests that businesses and consumers are not anticipating disruptive price changes, which could otherwise fuel further inflation. When people expect higher prices, they tend to adjust their behaviour—businesses raise their prices pre-emptively, and workers demand higher wages. That cycle can make inflation harder to control. Williams’ remarks imply that those risks are not materialising.
By choosing not to discuss monetary policy, Williams avoided signalling any potential direction from the Federal Reserve. That omission leaves markets to interpret incoming economic data without additional guidance. It also suggests that officials remain focused on available evidence rather than committing prematurely to any course of action.
Clarity For Financial Markets
For those navigating price movements in financial markets, this steadiness in expectations provides a degree of clarity. The absence of shifting inflation concerns means fewer reasons for sudden changes in rate projections. While that doesn’t eliminate all uncertainty, it does reduce the likelihood of abrupt moves in policy direction based on inflation fears alone.
The next few weeks will bring new data that may reinforce or challenge this outlook. Until then, Williams’ comments offer reassurance that inflation expectations remain contained.
US trade advisor Peter Navarro announced on CNBC that US auto companies have committed to moving their supply chains back to the United States. He mentioned that reciprocal tariffs will aim to establish a uniform tariff rate for each country, considering both tariffs and non-tariff measures.
In related news, President Trump postponed the tariffs on automobiles from Canada following talks with major automakers. Trump noted on Truth Social that the head of the United Auto Workers of America suggested that tariffs are necessary to address what he termed as long-term abuse of the US, citing the closure of 90,000 factories and plants since NAFTA was enacted.
Focus On Domestic Manufacturing
Navarro’s statement reinforces the White House’s intent to prioritise domestic manufacturing. This signals an effort to reduce reliance on global supply networks, particularly in the automotive sector. The referenced pledge by major vehicle producers suggests movement towards restructuring existing operations, which could reshape sourcing strategies over time. The immediate effects remain unclear, but implications for procurement costs and assembly line logistics cannot be ignored.
Trump’s decision to delay auto tariffs on Canada follows discussions with company executives and labour representatives. The mention of factory shutdowns since the introduction of NAFTA adds weight to the argument that policymakers will continue pushing for trade barriers to protect domestic production. While the timeline for potential future tariffs remains open, the message is straightforward—trade negotiations will not ease pressure on foreign manufacturers anytime soon.
The mention of reciprocal tariffs introduces another consideration. Matching levy structures with competing nations would change cost dynamics for exporters and importers alike. If implemented as described, pricing adjustments could follow, influencing market positions across multiple industries. Businesses reliant on overseas components may need to reconsider cost strategies in anticipation of further measures.
Impact On Market And Investments
Short-term shifts in sentiment are likely as investors digest how companies react to these policy moves. Adjustments in supply arrangements come with transitional costs, while geopolitical responses could add further unpredictability. The expectation of continued trade intervention suggests that caution remains warranted when assessing positions influenced by policy developments. It remains essential to monitor how North American firms adapt to possible constraints, as any realignment could trigger broader effects elsewhere.
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