<p style=““ class=“text-align-justify“>If something can’t go up on good news, well..</p><p style=““ class=“text-align-justify“>That is very much the case for oil as even the recent news of the re-opening in China isn’t enough to lift it from the doldrums after the retreat since June this year. The double-top pattern from the October and November highs was the final straw before we see price tumble further this week, after OPEC+ decided to keep production quotas unchanged over the weekend <a target=“_blank“ href=“https://www.forexlive.com/news/opec-holds-production-unchanged-as-expected-20221204/“ target=“_blank“ rel=“follow“>here</a>.</p><p style=““ class=“text-align-justify“>The story about a Russian oil price floor yesterday <a target=“_blank“ href=“https://www.forexlive.com/news/russia-mulls-oil-price-floor-in-response-to-g7-oil-price-cap-report-20221206/“ target=“_blank“ rel=“follow“>here</a> didn’t really provide much lasting relief for oil prices and that is arguably a big tell on how market sentiment is faring at the moment.</p><p style=““ class=“text-align-justify“>It’s a tough one to square up as the technical picture is outweighing the fundamental landscape in the oil market. You would think China re-opening, which is perhaps the biggest boost for oil demand, would be enough of a boon to lift the mood for buyers.</p><p style=““ class=“text-align-justify“>But looking at the chart above, the $70 mark is the likely technical destination for oil now before potentially revisiting the late 2021 lows around $62.50 to $64.50.</p><p style=““ class=“text-align-justify“>I reckon it will have come down to OPEC+ really signaling something significant to really change up the landscape in the oil market moving forward. There is also the case that the US needs to replenish its SPR and at these prices, they are seemingly attractive enough surely. That might play into additional demand but we’ll see if there is any appetite to get that done in the weeks/months ahead.</p><p style=““ class=“text-align-justify“>For now, it looks like sellers are in control and are still flushing out long positions that have been caught hoping for a tighter market amid the shelving of Russian oil – which doesn’t seem to have materialised.</p>

This article was written by Justin Low at forexlive.com.

<p class=“MsoNormal“>In this overview, we will get to
know the concept of quantitative trading. We will look at what it is for and
its advantages and disadvantages. </p><p class=“MsoNormal“>What is
quantitative trading?</p><p class=“MsoNormal“>Quantitative trading is a set of trading strategies based on quantitative analysis,
which uses mathematical calculations and statistical calculations to identify
trading opportunities. The price of a financial instrument and its volume of
trades are among the most common parameters of mathematical models used in
quantitative analysis and trading.</p><p class=“MsoNormal“>Quantitative trading involves
trading strategies and decisions based on historical data, statistical
indicators and hypotheses about future events and their impact on financial
markets. Simply put, the essence of quantitative trading is the use of an
effective <a target=“_blank“ href=“https://blog.roboforex.com/blog/2020/06/12/7-trading-strategies-for-beginners-and-advanced-in-2021/?utm_source=forexlive.com&utm_medium=pr&utm_campaign=rf_en_external_article&utm_content=article&a=ohrb“ target=“_blank“ rel=“follow“>trading strategy</a>, created on the basis of analysis of a wide variety of
information. </p><p class=“MsoNormal“>Today, quantitative strategies are
mainly used by institutional investors and various hedge funds. Such trading is
characterised by high volumes and a large number of trading transactions.
Modern technology, professional equipment and all available data on the
financial instrument are used.</p><p class=“MsoNormal“>Fundamentals of
quantitative trading</p><p class=“MsoNormal“>The quantitative trading system has
four main components:</p><ol type=“1″ start=“1″>
<li class=“MsoNormal“>Strategy selection. All quantitative trading
processes start with an initial research period. This research process
includes finding a suitable strategy, obtaining the data needed to test
the strategy, and a preliminary assessment of its effectiveness. The
chosen strategy is then subjected to serious analysis and refinement in
order to increase the potential profitability and at the same time reduce
the risks associated with trading.</li>
<li class=“MsoNormal“>Testing the strategy on
history. Once the
strategy is defined, it is necessary to test on historical data and
possibly optimise some parameters. Although historical testing does not
fully guarantee that a strategy will be successful in real time, it is a
certain test of a strategy’s quality and viability. Standard indicators to
assess the effectiveness of quantitative strategies are maximum drawdown
and Sharpe ratio.</li>
<li class=“MsoNormal“>Execution system. The execution system is the
means by which the list of trades generated by a strategy is executed by
the broker. While trade generation can be semi-automated or even fully
automated, the execution mechanism can be manual, semi-manual, or fully
automated. The key features of the execution system are: a professional
trading interface, automation and high speed of transactions, and
minimisation of costs (including commission, slippage and spread). </li>
<li class=“MsoNormal“>Risk management. Quantitative trade risk
management is designed to take into account all possible risks or events
that could interfere with trading. It includes not only trading risks, but
also technological risks (server failure) and broker risks (broker’s bankruptcy). The optimal
capital allocation – a set of rules, according to which the capital is
allocated in certain proportions to different strategies and deals within
the framework of these strategies – also plays an important role here. </li>
</ol><p class=“MsoNormal“>Quantitative
trading strategies</p><p class=“MsoNormal“>Let’s look at a few popular areas of
quantitative trading:</p><p class=“MsoNormal“>● Use
of alternative data.
Typically, mathematical models use price or volume data. Alternative data
includes non-traditional data, which also has predictive value in financial
markets. Such data could include, for example: weather forecasts, satellite
imagery, social media information and others. </p><p class=“MsoNormal“>● Little-known
markets. Little-known markets are less
popular and less regulated, but can still provide good trading opportunities.
Finding and exploiting market imbalances in such markets is one area for
quantitative trading.</p><p class=“MsoNormal“>● High
frequency trading (HFT). The
main characteristics that distinguish high-frequency trading are the high
execution speed, the large number of trades and the short holding time. Many
arbitrage strategies are based on this. <a target=“_blank“ href=“https://blog.roboforex.com/blog/2019/10/01/what-is-high-frequency-trading-ultimate-guide/?utm_source=forexlive.com&utm_medium=pr&utm_campaign=rf_en_external_article&utm_content=article&a=ohrb“ target=“_blank“ rel=“follow“>High frequency trading</a> requires a high degree of automation, a professional
software interface and high quality high-speed communications.</p><p class=“MsoNormal“>● Artificial
Intelligence. Using artificial
intelligence is a form of trading in which a computer gradually learns from
historical and current data. It learns from historical experience to the point
where eventually it no longer needs to be told what actions to take. Once it
reaches a certain level, the AI can make and execute trading decisions on its
own.</p><p class=“MsoNormal“>Advantages and
disadvantages of quantitative trading</p><p class=“MsoNormal“>The benefits of quantitative
trading:</p><p class=“MsoNormal“>● Quantitative trading helps you make promising trading
decisions by providing a multi-faceted analysis of the factors affecting
trading.</p><p class=“MsoNormal“>● Can find market imbalances and exploit them for profit.</p><p class=“MsoNormal“>● Promotes rational decision-making by screening out fear,
greed and other negative emotions.</p><p class=“MsoNormal“>● Quantitative trading methods improve trading efficiency by using
mathematics and computer algorithms, eliminating or minimising human error.</p><p class=“MsoNormal“>The disadvantages of quantitative
trading:</p><p class=“MsoNormal“>● Algorithmic models must be regularly adapted and changed due
to volatile financial market conditions. As market conditions change, trading
algorithms need to be reviewed and optimised.</p><p class=“MsoNormal“>● Highly labour-intensive process. High intellectual,
financial and technical costs are required.</p><p class=“MsoNormal“>● Qualitative analysis requires access to a huge amount of
different data.</p><p class=“MsoNormal“>Conclusion</p><p class=“MsoNormal“>Quantitative trading is a trading
strategy based on the complex use of sophisticated mathematical and statistical
models. It uses historical data and special algorithms to calculate optimal
trading strategies. Due to high capital requirements, equipment and automation
of trading processes, quantitative trading is mainly used by institutional
investors.</p><p class=“MsoNormal“>By Andrey Goilov, analyst at <a target=“_blank“ href=“https://roboforex.com/?utm_source=forexlive.com&utm_medium=pr&utm_campaign=rf_en_external_article&utm_content=article&a=ohrb“ target=“_blank“ rel=“follow“>RoboForex</a>.</p>

This article was written by ForexLive at forexlive.com.

<p style=““ class=“text-align-justify“>European stocks are lower in playing catch up to the losses in Wall Street yesterday, with US futures not hinting at much so far on the day. S&P 500 futures are up 1 point, or 0.02%, so that isn’t giving much for traders to work with. Meanwhile, Treasury yields were higher earlier on but have come back down a bit with 10-year yields now down 0.9 bps to 3.566% – the high earlier reached 3.607%.</p><p style=““ class=“text-align-justify“>That said, yields are still keeping above the key level noted <a target=“_blank“ href=“https://www.forexlive.com/news/a-taste-of-what-2023-may-look-like-20221206/“ target=“_blank“ rel=“follow“>here</a> and that remains a major spot to watch in terms of broader market sentiment this week. The retreat in yields and <a target=“_blank“ href=“https://www.forexlive.com/news/usdjpy-turns-flat-as-buyers-fail-to-top-200-hour-moving-average-20221206/“ target=“_blank“ rel=“follow“>rejection at a key near-term technical level</a> has seen USD/JPY pull back from 137.45 to 136.60 levels now, down just about 0.1% on the day. The dollar is more mixed in general, with light changes being observed.</p><p style=““ class=“text-align-justify“>EUR/USD is hovering near 1.0500 as buyers just managed to keep a defense of its 100-hour moving average so far today:</p><p style=““ class=“text-align-justify“>For now, buyers are still in near-term control but there is some pushback in other dollar pairs to suggest that the selling momentum in the greenback has significantly waned to start the new week.</p><p style=““ class=“text-align-justify“>GBP/USD is also now trading just below its own 100-hour moving average (seen at 1.2188) and buyers will have to do some work in defending the break above its 200-day moving average from last week:</p><p style=““ class=“text-align-justify“>The pair is down 0.2% to 1.2160 levels currently with the 200-day moving average (blue line) seen at 1.2135.</p><p style=““ class=“text-align-justify“>Meanwhile, AUD/USD is up 0.3% following the RBA policy decision earlier but hasn’t gotten much appetite to chase any further upside for now. The more tepid risk mood is certainly giving room for trepidation with dollar sentiment also not hinting at much so far today.</p><p style=““ class=“text-align-justify“>On the daily chart, the pair is just building off a bounce from its 100-day moving average (red line), seen at 0.6683, and is holding just above 0.6700 for now. However, the near-term bias is now favouring sellers and it would require buyers to push back above the 100 and 200-hour moving averages at 0.6778 and 0.6748 respectively to recapture the upside bias.</p>

This article was written by Justin Low at forexlive.com.

<p>Bitcoin Market picture</p><p class=“MsoNormal“>Bitcoin once
again failed to get on the upside track, and its exchange rate fell to $17K,
around which it has been languishing since the beginning of the month. The
reason for the decline was pressure in the markets due to relatively good
economic data, which increased speculation that the Fed would have to go
further in raising rates than previously expected.</p><p class=“MsoNormal“>We note that
the crypto market recently had very subdued volatility compared to stocks,
having missed much of the rally of the last two months but also not feeling the
kind of pressure that stocks have been under since early December.</p><p class=“MsoNormal“>The
cryptocurrency fear and greed index down 1 point by Tuesday, to 25, and had
moved into „extreme fear“ status. The total capitalisation of the
crypto market fell 1.9% to $853bn.</p><p class=“MsoNormal“>The
suppressed volatility in the cryptocurrency market is causing market
participants to move stop orders closer to the current price. A drop below $16K
(-6%) could devastate speculators‘ positions, delaying a potential market
recovery for many more months. On the other hand, a rise above $18K (+6%) could
open a direct track to $21K.</p><p class=“MsoNormal“>With
professional market makers becoming less active towards the end of the year, it
will become increasingly easy to swing the price in either direction (or even
in both directions).</p><p>Bitcoin News background</p><p class=“MsoNormal“>According to
CoinShares, investments in crypto funds fell by $11m last week after an outflow
of $23m the week before. Bitcoin investments rose by $11m, and Ethereum fell by
$4m. Investments in funds that allow shorts on bitcoin fell by $11m. Trading
volume was $753m, compared to an average of $2bn a year ago, suggesting low
investor engagement, CoinShares noted.</p><p class=“MsoNormal“>Cryptocurrency
broker Genesis Global Capital has reached $1.8bn in debt and is likely to
continue to grow, CoinDesk reported. Messari estimates that the platform needs
to raise at least $500m to avoid liquidation.</p><p class=“MsoNormal“>Bloomberg
Intelligence senior commodities strategist Mike McGlone believes that
cryptocurrencies are now going through their last phase before hitting rock
bottom. However, he says it will be tough for investors and companies to
survive this phase.</p><p class=“MsoNormal“>A Chinese
court has ruled that non-exchangeable tokens (NFTs) are virtual property that
should be protected by law.</p><p class=“MsoNormal“>This article was written by <a target=“_blank“ href=“https://www.fxpro.com/“ target=“_blank“ rel=“follow“>FxPro</a>’s Senior Market Analyst Alex
Kuptsikevich.</p>

This article was written by FxPro FXPro at forexlive.com.

<ul><li>Don’t see a ‚hard landing‘ for Eurozone economy</li><li>No material de-anchoring of inflation expectations</li></ul><p style=““ class=“text-align-justify“>He isn’t one of the more vocal members on the governing council and the above are but token remarks anyway.</p>

This article was written by Justin Low at forexlive.com.

<ul><li>Prior 53.2</li></ul><p style=““ class=“text-align-justify“>UK construction growth falls to a three-month low as business activity grinds to a halt amid subdued demand conditions and reduced risk appetite among clients. Of note, business expectations were seen at their weakest since May 2020 as the outlook deteriorates heading into the end of the year. S&P Global notes that:</p><p style=““ class=“text-align-justify“>“Stalling house building activity contributed to the weakest UK construction sector performance for three months in November. Survey respondents noted that new residential building projects had been curtailed in response to rising interest rates, cancelled sales and worries about the economic outlook. </p><p style=““ class=“text-align-justify“>“Construction growth was largely confined to the commercial segment, but even here the speed of expansion slowed considerably since October as client confidence weakened in response to heightened business uncertainty. At the same time, a lack of new work to replace completed projects resulted in another fall in civil engineering activity. </p><p style=““ class=“text-align-justify“>“The number of construction firms anticipating a rise in overall business activity during the year ahead exceeded those forecasting a decline by only a very fine margin during November. Moreover, disregarding a three-month period of negative sentiment at the start of the pandemic, our survey measure of business expectations across the construction sector was the joint-weakest since December 2008.“</p><p style=““ class=“text-align-justify“>/<a target=“_blank“ href=“https://www.forexlive.com/terms/g/gbp/“ target=“_blank“ id=“3a5ab7c1-ff09-45ea-87d4-eea6613bb754_1″ class=“terms__main-term“>GBP</a></p>

This article was written by Justin Low at forexlive.com.

<p style=““ class=“text-align-justify“>Amid the lack of change in the major currencies space, this is one of the only notable pieces of action in trading so far today. 10-year Treasury yields are also pretty much flat again on the day, relieving USD/JPY buyers of their impetus at the moment. The pair <a target=“_blank“ href=“https://www.forexlive.com/news/usdjpy-nudges-higher-to-test-key-near-term-level-to-start-the-session-20221206/“ target=“_blank“ rel=“follow“>ran up to test</a> its 200-hour moving average (blue line) earlier but for now, sellers are holding the line.</p><p style=““ class=“text-align-justify“>As such, the near-term bias stays more neutral after the developments from yesterday – in which we saw price climb back above 135.00 and its 200-day moving average, as well as the 100-hour moving average (red line) above.</p><p style=““ class=“text-align-justify“>For now, price action is caught in a near-term tussle in determining the next directional bias before we look at the bigger picture levels on either side again.</p><p style=““ class=“text-align-justify“>The dollar remains little changed overall today, trading within 0.1% against other major currencies with only AUD/USD up 0.3% to 0.6720 – owing to the RBA policy decision earlier in the day.</p>

This article was written by Justin Low at forexlive.com.

<p style=““ class=“text-align-justify“>Timiraos has been a sort of Fed whisperer as of late, so it is something to follow in case his remarks or views have any juxtaposition with prevailing market sentiment. Think back to how markets used to follow Hilsenrath when it came to Fed commentary.</p><p style=““ class=“text-align-justify“>In any case, this is the latest by Timiraos and it makes for an argument that while the Fed could slow down their pace of tightening this month, policymakers could allude to higher rates next year – more than what investors are expecting now.</p><p style=““ class=“text-align-justify“>A 50 bps rate hike seems to be what policymakers are favouring next week and that is what markets are expecting already at the moment. However, the infamous dot plots is going to be a major focus point and Timiraos says that „elevated wage pressures could lead them (Fed) to continue lifting it (interest rates) to higher levels than investors currently expect“.</p><p style=““ class=“text-align-justify“>The September projections showed that most policymakers saw rates rising towards 4.50% and 5.00% next year but that ‚landing zone‘ could be lifted towards 4.75% to 5.25% in next week’s latest projections.</p><p style=““ class=“text-align-justify“>You can view the full report <a target=“_blank“ href=“https://www.wsj.com/articles/fed-could-pencil-in-higher-interest-rates-next-year-while-slowing-hikes-in-december-11670208857?mod=latest_headlines“ target=“_blank“ rel=“nofollow“>here</a> (may be gated).</p><p style=““ class=“text-align-justify“>In any case, the bond market reaction is the one to watch in my view and over the past few weeks, a less hawkish stance has seen rates fall considerably to reach near a critical juncture as noted <a target=“_blank“ href=“https://www.forexlive.com/news/the-bond-market-is-still-a-key-spot-to-watch-this-week-20221205/“ target=“_blank“ rel=“follow“>here</a>. If bond traders interpret the Fed’s outlook as one that is still leaning more towards the hawkish side, the dollar could yet catch a much needed break heading towards year-end; vice versa.</p>

This article was written by Justin Low at forexlive.com.

<ul><li>Haven’t reached the stage that we are confident inflation is under ccontrol</li><li>Anticipates that there will be further rates hikes next year</li></ul><p style=““ class=“text-align-justify“>That at least gives some idea of what to expect but on the balance of things, markets are arguably leaning towards a 50 bps move anyway at this juncture. The Fed may be the main focus next week but don’t forget about the ECB as well.</p>

This article was written by Justin Low at forexlive.com.

<ul><li>Prior +0.4%; revised to +0.8%</li><li>Retail sales -2.7% vs -2.6% y/y expected</li><li>Prior -0.6%; revised to 0.0%</li></ul><p style=““ class=“text-align-justify“>Euro area retail sales were weaker than anticipated in October but that comes after a bit of a positive revision for September. In any case, the dip continues to highlight weakening demand conditions – which has become more prevalent in Q4, suggesting that a recession is likely in the works.</p>

This article was written by Justin Low at forexlive.com.