What Is Actually Worth Watching
Most market news is noise. I say that as somebody who reads it for a living.
The trouble is that noise and signal arrive in the same font, on the same screen, in the same urgent tone. So let me give you a filter.
Almost every move in currencies, metals and crypto traces back to one question: where is money cheapest, and where is that headed.
That question is interest rates.
A central bank raising rates makes its currency more attractive to hold, and makes borrowing more expensive for everyone at home. Cutting does the reverse. Nearly everything else you will read is detail hanging off that one hinge.
Which means four things earn your attention, and the rest can go by without you.
Rate direction, not the level. The level is already in the price. What moves a market is the change in expectation. Which is why a decision that matches exactly what everyone assumed often does nothing at all, and confuses people endlessly when it happens.
Inflation, because inflation decides the direction. A central bank losing the inflation fight has no room to cut, no matter what else is going on and no matter who is unhappy about it.
Employment, because employment decides how much pain that bank can tolerate. Strong jobs buy patience. Rising unemployment ends it.
The dollar, because it is one side of most currency pairs and the pricing currency for gold, for oil and for most of crypto. A dollar move shows up everywhere at once. Mistaking a dollar move for news about gold is one of the most common errors there is, and I have made it myself.
Everything else, and there is a great deal of it, is either a detail of those four or a story somebody is telling.
This filter will not make you right. Nothing does.
But it will cut how much you have to read down to almost nothing, and what is left will actually matter.
Keep going
The Investing Explainers are written by Kanin D. Alldredge for The Currency Classroom, and they are free to read. CNS Pro adds a brief before every market open, his column, and the weekly and monthly letters.
See CNS Pro →