ALRiM: Luxembourg Association
of Risk Management

Experience a lively US bond market overview where rigorous government debt and yield surprises merge unexpectedly, what captivating twist awaits next? The post Us Bond Market: Bright Trends Ahead appeared first on The Point News.

In the fast-paced world of cryptocurrency, every major transaction sends ripples, and a recent event has certainly caught the attention of market observers. Imagine a digital leviathan moving an enormous sum of money, quietly, yet with significant ...

Until the blanket orders were issued across the provincial Canadian securities regulators there were restrictions that could have stopped investment funds from accessing the CTRF as that would result in the fund being unable to comply with certain repurchase transaction requirements. A potential risk management tool would also be available to eligible funds, providing them with a way to proactively manage their liquidity during times of severe market conditions. The exemptive relief to facilitate access to the CTRF is on the conditions that it would be in the best interest of the investment fund to do so, that the cash delivered to the investment fund as consideration for sold securities in the CTRF is used for liquidity management of the investment fund, and that certain reporting requirements are complied with. In March, the BoC announced changes to the eligibility criteria and review process for applications for the CTRF, recognizing that “non-bank financial institutions play an increasingly important role in fixed-income markets and in the global financial system.”

🔍 What is Macro-Driven Risk Planning? At its core: Macro-driven risk planning means managing your investment or trading risks by keeping the larger economic environment in mind. You don’t just look at a stock or a chart — you ask: What's happening with interest rates? Is inflation rising or falling? What’s the government doing with taxes or spending? Is the US dollar strong or weak? What are central banks like the RBI or the Federal Reserve up to? These macroeconomic factors can make or break entire trades, portfolios, and even industries. So macro-driven risk planning is about aligning your strategies with the economic environment. 🧠 Why Is This Important? Let’s say you’re trading in India. If the US increases its interest rates sharply: Foreign investors might pull money out of Indian markets. INR might weaken. Stock market might fall due to FII outflows. If you're not paying attention to this macro signal, you might be trading blindly — even if your technicals are perfect. 🏦 Key Macro Factors That Drive Risk Here’s a list of major macroeconomic indicators that smart investors and institutions track: 1. Interest Rates Central banks (like the RBI or US Fed) control this. 📈 Rising Rates: Borrowing becomes expensive → Business slows → Markets may fall. 📉 Falling Rates: Loans become cheaper → Business expands → Markets may rise. How to plan risk: If rates are going up, shift from high-growth, high-debt companies to safer sectors like FMCG, pharma, utilities. 2. Inflation This measures how fast prices are rising. Moderate inflation = Normal High inflation = Dangerous for consumers Deflation = Danger of recession Indicators: CPI (Consumer Price Index), WPI (Wholesale Price Index) Risk Planning Tip: In high inflation, avoid sectors that depend on raw material prices (like auto, FMCG) and look at commodities or inflation-protected assets (like gold, real estate). 3. GDP Growth (Economic Output) Gross Domestic Product shows if the economy is expanding or shrinking. 📈 Strong GDP = Business confidence = Higher earnings 📉 Weak GDP = Caution = Lower valuations Risk Strategy: During GDP growth, take on slightly higher risk with cyclical stocks (like infra, banks). During slowdown, shift to defensive sectors (like pharma, IT). 4. Currency Movements (INR/USD, etc.) Currency strength/weakness affects: Imports/Exports FII flows Commodity prices (like oil) Example: If INR weakens, oil imports become costly → Impacts inflation → May lead to rate hikes. Plan risk: Export-based sectors (IT, pharma) benefit from weak rupee. Importers (oil, aviation) suffer. 5. Fiscal and Monetary Policies This includes: Government budgets (fiscal policy) – Taxes, subsidies, spending Central bank actions (monetary policy) – Rate changes, money supply Risk View: A budget with heavy borrowing = inflation pressure A tight monetary policy = reduced liquidity in markets Keep eyes on RBI speeches, Fed meetings, union budgets. 6. Global Events Even if you only trade in India, global news affects you: US elections Crude oil prices Geopolitical tensions (e.g. China-Taiwan, Russia-Ukraine) Supply chain issues US Non-Farm Payroll (NFP) data Macro-risk planning = Staying alert to these changes. 7. Bond Yields Especially US 10-year bond yield. Rising yield = Risk-off = Equities may fall Falling yield = Risk-on = Equities may rise Foreign investors use this as a guide. It directly affects FII flows. 📘 Real-Life Example: Macro Risk in Action Case: COVID-19 Pandemic (2020) Global economy shut down Interest rates slashed to zero Stimulus packages announced Investors moved money into gold, tech stocks, pharma Smart traders did this: Moved into digital, pharma, and FMCG stocks Stayed away from travel, aviation, real estate Watched central bank actions daily Used hedges (like buying puts or moving to cash) This is macro-driven risk planning in real-time. ⚖️ How to Build a Macro Risk Management Plan Here’s a step-by-step structure anyone can follow: Step 1: Define Your Risk Tolerance Are you a short-term trader or long-term investor? Can you handle volatility? Do you rely on leverage or trade with cash? This tells you how much room you have to play with. Step 2: Track Macro Indicators Weekly Use sites like: RBI website for policy updates Trading Economics for inflation, GDP, interest rates Bloomberg, CNBC, or Twitter for global headlines Set alerts for: Fed meeting dates India CPI, GDP, IIP Crude oil updates Step 3: Use Hedging Tools Advanced traders use: Options (buying protective Puts) Inverse ETFs (for global markets) Gold or commodities Diversification (across sectors, geographies) Step 4: Stay Flexible Macro conditions change fast. Stay open to: Rotating your portfolio Sitting on cash during uncertain times Changing strategies with data, not emotions 🧭 Conclusion: Think Bigger, Trade Smarter Macro-Driven Risk Planning is about being proactive, not reactive. Markets aren’t moved by charts alone. They’re driven by: Central banks Government decisions Global events Economic data So when you plan your next trade or invest in a stock, ask yourself: “Am I moving with the economic current — or fighting against it?” The more you understand macro trends, the better you’ll manage your risks and grow consistently.