Dear fellow monkeys, would be great to hear you opinion!
It is quite clear that due to rising rates environment, equities (especially tech stocks) perform bad and we are expecting job cuts in Equities S&T.
What about prospects in the (1) FX, (2) Fixed Income/Rates, and (3) Commodities markets respectively? I am unsure about how rising rates environment will bring positive/neutral/negative effects in each of these 3 sectors.
Would appreciate everyone's insights!
Rising interest rates great for rates desks, likely to be the best performer over the next 12-18 months. Likely to create more volatility which is naturally great for rates trading desks.
Similarly FX should benefit as well, as we see divergences between central bank policy widen and economic growth prospects. E.g. look at US vs UK dynamics, sterling is being hammered recently. All this increased volatility is great for rates and FX desks
Interest rates don’t have a huge impact on commodities trading desks directly, but would say that inflation has been great for commodities desks, as they are a great hedge against inflation during a time where everything is in the red, which will create more flow for these desks.
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