Financial markets have been in complete turmoil over the past couple weeks with the worsening impact of Covid-19, economic setbacks, and historic volatility in the stock markets. Helping make sense of it all is BDSwiss’ Head of Investment Research, Marshall Gittler, who spoke with Finance Magnates exclusively on the matter.
Markets have continued to be driven by volatility caused by economic headwinds, Covid-19, and other factors. Will this volatility continue in Q1 2021?
Yes, I think so, January continued to be characterised by major market moves and we saw safe havens like metals and the JPY appreciate, something that resulted from the overall market uncertainty caused by the global pandemic.
We also saw vaccine distribution efforts being hampered by delays and production problems. Central banks announced more stimulus, causing their respective currencies to depreciate and a new generation of r/WallStreetBets investors created havoc in the markets with their “GameStop” revolution.
In terms of the global economy, there’s a tug-of-war between the plague and the cure. That’s going to continue to be a source of volatility until it’s conquered, at which point the Forex market will have to deal with a turnaround in global monetary policy. A new administration is now established in the US, with a new fiscal policy and new ideas for global relations.
On the UK/EU front, Brexit isn’t over; on the contrary, it’s just beginning. Not even all the negotiations are finished yet. Meanwhile, the UK and EU are finding a lot of unexpected consequences in the agreement that are causing major disruption.
Scottish elections in May could cause further upheaval in the United Kingdom, while German elections in September will bring a new Chancellor to the EU’s largest economy.
And of course, there are the “unknown unknowns,” the things we don’t even know about, that can hit us at any time. There are plenty of reasons for volatility to stay high or even increase.
Education continues to be an important offering by retail brokers. Why should traders be better informed and what are the best ways to accomplish this?
Education is the difference between investing (or trading) and gambling. You don’t need any education to gamble; years of study of statistics won’t help you to determine the result of a roulette wheel.
Trading the markets without proper knowledge and education can in the same way be extremely risky. If you are truly dedicated to the idea of becoming a trader, and maybe one day even turning your trading into a full-time profession, you need education.
You need to understand what the main market drivers are, how to read the charts and identify setups, how to manage your risk exposure and how to create your own trading strategy.
While there are no shortcuts, you can definitely be smart about the way you choose to learn about trading and investing.
Choosing a broker that offers a broad educational suite apart from competitive conditions and regulation is always a good idea. A financial services company that is willing to invest in traders’ education is more likely to align itself with your investment goals.
What better way to learn about trading than from the actual industry experts and analysts?
Study what ideas the experts offer, and more importantly, try to understand why they came to these conclusions. If you don’t understand something, just ask.
Ask your account manager, the webinar host, leave a comment under a video with your question, or just contact the company’s help desk.
At BDSwiss, for example, our research and support team are always extremely responsive. It’s something I see daily during our live analysis webinars, with my co-host Frank Walbaum, where we try to simplify and answer questions from traders live.
Besides offering free daily fundamental analysis, special market reports and video briefs, we also provide free educational and live trading webinars for traders of all levels. In addition to our expert projections and strategies, we provide real-time market commentary helping our traders and followers keep ahead of the markets at absolutely no extra cost.
What major events are on the calendar for traders in 2021 and what should investors be cognizant of?
There a number of high-volatility events to look forward to in 2021 including:
1) The UK local elections on May 6th-- this will include elections to the Scottish Parliament. A strong showing by the Scottish National Party could increase demands for another referendum on Scottish independence, which has a good chance of passing thanks to Brexit.
This coincides with the centenary of Irish partition (also May). Northern Ireland also voted “remain”. Catholics are now a majority there and the Good Friday agreement guarantees the right to hold a poll on the border.
2) German federal elections in September - The likely outcome here is a change in the composition of government but little change in policy. Nonetheless, a shift to the right could make people nervous about Germany and hence the euro.
3) ECB finishes its strategy review in 2H. It's likely to unveil the results at the annual Sintra conference in September. A change to their policy target or ways of operating in the market could affect the euro, just as the Fed's shift to Average Inflation Targeting has weakened USD.
4) The COP26 climate conference in November is likely to result in winners & losers among companies.
5) G7 meeting to expand to "D10" -- The UK has the chair of the G7 this year. They're inviting Australia, India and South Korea to attend in an attempt to forge a "D10" group of 10 democratic countries. This could have some impact on AUD and perhaps other currencies, depending on what they decide.
How can traders, investors, or institutional partners benefit from reading your market outlook for Q1?
Forewarned is forearmed! It’s essential to understand what’s been happening in the market before you start trading – what trends brought the currencies to where they are now and whether these trends are likely to continue.
It’s the difference between travelling with a map and setting out on a journey blind. Even if the market trades differently than expected, at least you have a set of expectations to measure these trends against.
In my Global Market Outlook for 2021, I discuss some prevailing forecasts on forex trends that we may expect to see in the forex markets this year.
These are based on Bloomberg consensus estimates, which are derived from forecasts by dozens of economists and analysts. Of course, these forecasts are just market speculations and personal insights. It’s always important to remember that markets are extremely volatile and hard to predict, and as we saw this year, anything is possible.
Many forget brokers and clients engage in a two-way partnership. Why do brokers owe traders or investors quality analysis and has the demand for this information increased in 2021?
For some brokers, the best client is an ignorant client – as they’ll lose their money faster. At BDSwiss, it’s in our best interest that our traders invest with us in the long run, and this can only be achieved by ensuring they have the education and information they need in their investment journey, helping them reach their financial goals.
Having our commentary and research regularly quoted by leading financial news sources, such as Reuters, Barron’s, and Dow Jones MarketWatch is the ultimate recognition of the work we do and the quality of analysis that we provide our traders here at BDSwiss.
As for the demand for this information, yes, I think the general level of knowledge in the field has been rising steadily. There’s a “trickle-down” effect as more investment firms offer their professional-level information and high-quality analysis to the retail world.
This means that the rest of the industry is forced to improve their educational offering and trading conditions, in order to remain competitive.
At the same time, more people have decided to take up trading during the pandemic because, well, there’s just not that much else for them to do and it became an intriguing point of discussion.
They evidently are also looking to potentially profit from market volatility, but they should remember that leveraged trading also carries a high risk of incurring a loss. As a result, the demand for quality information has also risen.
It’s exciting and challenging for me personally because once again I have to be on top of my game to keep up with the competition.
About Marshall Gittler
Head of Investment Research at BDSwiss
Marshall Gittler is a leading fundamental analyst of global economies and markets with over 30 years of experience in the financial industry. His career spans high-profile positions in elite investment banks, international securities firms including UBS, Merrill Lynch, Bank of America, Deutsche Bank, Bank of China.
As a distinguished investments strategist, economist and financial contributor trusted by established economic institutions, he has been featured on global news agencies such as Reuters, Marketwatch amongst others, while he also appeared on CNN, BBC and Bloomberg News. Marshall has established himself as a global thought leader at BDSwiss Group, delivering insightful daily market briefs, exclusive projections and comprehensive market commentary.
About BDSwiss Group
BDSwiss is a leading financial group of companies, offering Forex and CFD investment services to more than 1.5 million clients worldwide. Since its inception back in 2012, BDSwiss has been providing top-class products, a wide range of platforms, competitive pricing and fast execution on more than 1000 underlying CFD instruments.
BDSwiss Group complies with a strict regulatory framework and operates its services on a global scale under different entities. With over 250 personnel, BDSwiss Group maintains operating offices in Europe and Asia.
