LONDON, September 30, 2011 /PRNewswire/ --
Global markets including the FTSE and Dow Jones tumbled last week as the Federal Reserve launched a $400 billion package to kickstart the US economy in a new stimulus move dubbed "Operation Twist". Financial traders can take maximum advantage of this kind of volatility by spread betting with City Index (http://www.cityindex.co.uk/). The award-winning firm is offering 1 point spreads on the FTSE, Dow Jones, DAX and CAC during market hours.
What is Operation Twist?
In practice, Operation Twist saw the Fed change the make-up of its bond portfolio, estimated to be worth around $1.65 trillion. It did this by trading some of its short-dated federal bonds for long-dated alternatives: a measure which will see demand for the long-dated bonds exceed supply, in theory driving up their value and lowering interest rates.
Joshua Raymond, Chief Market Strategist of City Index, summarised the move in his daily market analysis: "In a widely expected move, the Fed announced it would sell $400bn of short term Treasury bonds and re-invest them into longer term debt in an effort to lower longer term borrowing costs."
Mr. Raymond continued: "The negative tone struck by the Fed in terms of the serious headwinds and downside risks facing the US economy sent a bit of a ripple through the markets." In the aftermath of Operation Twist's announcement the Dow Jones, FTSE 100, DAX and CAC all witnessed sharp negative movement.
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About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, contracts for difference (CFDs) and, in the UK, spread betting.
We constantly look to widen the range of assets we offer, improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, mobile trading, competitive spreads, and a high standard of customer service and support. To find out more, or to open a spread betting account, visit http://www.cityindex.co.uk/.
SOURCE City Index