Interest rates: Seven nation averages

We trade day trades by interest rates since 2015 /2016. I have been inside central bank interest rates daily for 9 years. Never have I seen anything like what takes place today. The BOJ is quite different and remains correct and brilliant.

The 7 nation average = 3.9836625. Exclude BOJ at 0.99's and SNB at 1.69 then the average becomes 4.8295. Exclude only BOJ then the average records 4.3062 at the RBA rate.

The Fed remains locked at 5.33 and Fed Funds trades 10 and 11 points per day at the maximum. SOFR trades 6 points per day at the maximum and interest rates trade below Fed Funds rates. Trade at maximum means US Inflation or GDP day and possibly an interest rate change day. The vast majority of those days are 50 pip movements.

The new world of interest rate convergence since 2016 is killing off markets and movements.

View interest rates and market prices as a symphony in the first movements as all central banks operate in unison as if only 1 central bank exists. Yesterday, all central bank interest rates traded higher. The Fed and Fed Funds leads the way to communicate interest rate direction and movements. Remainder central banks comply.

Central banks don’t have a clue what to do until the FED dictates the message and movements. The Fed must change interest rates first so all central banks obey the master.

The Fed at 5.33 and the Fed Watch Tool today at 91.5 from yesterday 90.00 reveals the Fed Rates traded higher yesterday. With Fed Funds trading Maximum 10 and 11 points per day and SOFR at 6 points, its quite easy to calculate probabilities ahead.

Despite what sounds like a big move at 10 and 11 points, central banks forced interest rates into 25% and 75% bands. The 10 and 11 daily points are now 8 and 7 points. This is a comedy show for TV. Hold interest rates into tiny trade channels means the money supply remains in the same small bands. The world is locked in the exact same place.

Fed Funds at 5.33 means all central bank interest rates trade below 5.33 except New Zealand and the RBNZ at 5.38. The RBNZ is the next smartest central bank beside the BOJ while the Swiss and SNB runs a close 2nd.

Much is reported to Swiss Wage growth at higher levels. But then this statement. Why is the 2% Inflation target so important. Why SNB is due to trade as imports and exports.

The last problem we want is trade wars as seen in the 1930’s. Import lines for all nations must trade lower for economic harmony throughout the world. The SNB doesn’t have an import/ export problem. If it happened, the SNB would intervene quicker than the BOJ could ever imagine. Currently, all nations are losing on the export side except the SNB and BOJ.

How’s the world doing. Let’s hit the positive side to intervals first. A fairly normal range is 5.5911 – 2.3761 on the largest scale.

Positive

5.0671.

5.3371.

5.5823.

Extremes and overbought

5.6554.

6.0412 = US Inflation Line above current 3.1.

6.2984.

6.6280.

7.1343.

7.7291.

8.1310.

8.8061.

The negative side

2.9002.

2.6301.

2.3850.

Extremes

2.3118.

1.9260.

1.6688.

1.3393.

0.8329.

0.2381.

0.1636.

-0.8380.